What is an Energy Management System and how can it help your organization?

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Soaring energy costs and the need for greater environmental responsibility in light of the climate crisis mean that adopting an effective Energy Management System (EnMS) can be extremely helpful for your organization. From achieving energy management goals as part of cost-efficiency drives to creating a more efficient business model, an EnMS plays a valuable role in monitoring and improving energy use throughout operations and the supply chain.

With 33 U.S. States in the process of developing climate action plans that aim to reduce greenhouse gases, industries in many sectors across the U.S. are under increasing pressure to manage their energy responsibly. Coupled with a range of incentive bills, such as the Inflation Reduction Act which has pledged $60bn in support for small businesses to move towards net zero, organizations stand to benefit from greener, cleaner energy usage.

An Energy Management System helps organizations understand their energy use, and develop policies and procedures for managing and reducing energy usage and related costs.

energy management systems

What is an Energy Management System?

An EnMS is a framework that assists organizations in effectively improving their energy efficiency. This framework helps to outline gaps and opportunities in internal processes so that an organization can introduce new software, hardware, working practices and management systems that monitor and reduce energy consumption.

Critically it can support organizational efforts to comply with State and Federal laws on energy usage and climate impact and broad efforts to support Environmental, Social, and Governance (ESG) efforts.

To ensure a practical energy management system, an organization can achieve ISO 50001 certification, a global specification standard developed by the International Organization for Standardization (ISO).

Benefits of an Energy Management System

Benefits to organizations aren’t limited to climate impact but can impact reputation, costs, operations, and business continuity, such as:

  • Reducing cost through continual improvement of overall energy efficiency.
  • Complying with legislation relating to greenhouse gas (GHG) emissions.
  • Reducing the risk presented by volatile energy costs.
  • Improving business continuity through derisking energy supplies.
  • Boosting organizational reputation with customers, employees, and stakeholders.
  • Increasing competitiveness through cost reductions and efficient systems.
  • Improving operational efficiency throughout the supply chain. 

Compliance With Legislation

Compliance with energy-related legislation is a significant aspect of business operations, particularly in industries with high energy demands.

An EnMS helps organizations align with State and Federal regulatory frameworks by effectively managing and reducing their energy consumption. It provides a systematic approach to measuring and monitoring energy use and helps implement strategies to decrease it. By doing so, an organization can ensure that it meets all relevant regulatory requirements, avoiding potential legal penalties or sanctions.

Monitor Energy Usage

An efficient EnMS can help organizations identify areas where energy use can be reduced or optimized without compromising operational efficiency.

This includes strategically investing in energy-efficient technologies or modifying operational practices to save energy. By providing real-time data on energy usage, an energy management system enables organizations to identify areas of high consumption or defects with equipment and systems that result in excessive energy use.

This is crucial in exposing risks and opportunities within the system.

Derisk Cost Volatility

Energy costs can be a significant portion of an organization’s operating expenses.

Costs can fluctuate significantly due to various factors, such as changes in supply and demand, geopolitical events, natural disasters, or changes in energy policies. This volatility can create financial uncertainty, making budgeting and financial planning more challenging for businesses.

An EnMS can mitigate the effects of energy cost volatility by promoting efficient energy use, reducing the overall energy consumption of an organization. With less energy consumed, your organization may prove less sensitive to changes in energy prices—not only saving money directly by using less energy but also gaining more predictability in energy cost forecasting.

A study by Energy Star found that a reduction in energy consumption of 10% in commercial real estate resulted in a 1.5% increase in net operating income.

solar panels on a warehouse

Business Continuity for High Energy Industries

For industries heavily dependent on energy, any interruption in energy supply can severely impact operations. It could lead to downtime, loss of productivity, or, in severe cases, a complete halt of operations.

An EnMS provides a systematic approach to understanding and managing energy use within an organization. This involves regular monitoring of energy consumption, proactive identification of potential issues, and measures to prevent or mitigate any disruptions to the energy supply. For example, an EnMS might reveal opportunities to diversify energy sources, reducing dependency on a single source and lowering the risk of energy supply disruption.

In addition to monitoring and management, an effective EnMS can also help your organization plan for energy-related emergencies or disruptions. It can aid in developing contingency plans to ensure a consistent energy supply, even in adverse circumstances. An EnMS can strengthen business continuity by reducing the risk of operation disruptions due to energy supply issues.

Boost Employee Engagement

With a focus on reducing energy consumption and subsequently reducing carbon emissions, a business can have a productive workforce. Research by the University of California found that organizations with eco-friendly practices and processes have 16% more productive staff than comparative organizations.

This is further enhanced by growth in reputation and credibility. Research by IBM found that 67% of workers are more willing to apply for a job at an organization that they feel is environmentally sustainable.

what is an energy management system

Enhanced Reputation

In the context of growing environmental awareness, organizations are increasingly expected to demonstrate their commitment to sustainability and responsible resource management. An EnMS allows organizations to do just that. Organizations can significantly lower their carbon footprint by managing and reducing energy consumption, aligning with globally recognized sustainability goals and environmental responsibility.

An effective EnMS also opens the door for recognition and certification, such as ISO 50001, further enhancing an organization’s reputation and credibility.

This commitment to efficient energy management—through certification to standards such as ISO 50001—sends a powerful message to stakeholders, including customers, employees, shareholders, and the broader community that your organization is forward-thinking, responsible, and committed to playing its part in addressing global challenges such as climate change.

Operational Efficiencies

An ISO 50001 EnMS can also help organizations invest strategically in energy-efficient technologies and processes.

For example, upgrading to energy-efficient equipment, automating energy-intensive processes, or adopting renewable energy sources can reduce energy consumption and enhance operational efficiency.

Implementing ISO 50001 as a robust framework for reducing energy consumption helps to incentivize improvements to HVAC systems, such as installing more efficient insulation, using energy-saving LED bulbs, and incorporating more sustainable practices.

This extends to the entire supply chain. Organizations can also influence suppliers to do the same by improving energy efficiency, thereby driving efficiency throughout the supply chain.

Orion Registrar no longer provides ISO 50001 certification services. However, as we are part of the Amtivo group, you can explore ISO 50001 certification services through our sister company, Certification Europe


Written by

Julian Russell

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