The ISO 14001 environmental management systems (EMS) standard and the new ISO 50001 energy management systems (Enmesh) standard are complementary, synergistic, and mutually supporting systems for improving stakeholder value. ISO 50001’s proposed reference to greenhouse gas (GHG) reduction is, however, dysfunctional.
This article recommends that the two standards be combined in practice if not in actual fact, and that the GHG focus be removed. It will begin, however, by citing the proven results of world-class environmental and energy management.
Henry Ford developed green manufacturing during an era when he could have legally thrown into the nearest river whatever waste wouldn’t go up his smokestack—and he paid attention to that, as well. As stated by Upton Sinclair in The Flivver King (Charles H. Kerr Publishing, 1937), “He perfected new processes—the very smoke which had once poured from his chimneys was now made into automobile parts.” The truth behind this statement might have been Ford’s use of charcoal to adsorb and recover paint solvents that would have otherwise been burned and vented to the atmosphere, with the result that one gallon of purchased solvent did the work of 10.
Anything that was thrown away or even recycled (such as metal waste from machining operations) drew immediate attention; the phrase “it worried the men” appears frequently in this context, as Edwin Norwood mentions in Ford: Men and Methods (Doubleday, Doran & Co., 1931). The organization found ways to process and sell waste ranging from slag from blast furnaces (as cement and paving material) to wood chips (Kingsford Charcoal after distilling the wood chemicals). Ford’s primary focus was, however, on ways to avoid making the waste in the first place.
Ford’s proven results in the language of money are an excellent selling point for both ISO 14001 and ISO 50001. Distillation of waste wood yielded $12,000 per day in the money of the 1920s, or enough to pay 2,000 workers the relatively high wage of $6 a day. In Today and Tomorrow(Doubleday, Page & Co., 1926), which Ford wrote with Samuel Crowther, Ford also described how he got coke for his steel mill for literally less than nothing. Coal cost $5 per ton, but Ford recognized the enormous waste of burning it for fuel as delivered: “When one thinks of the precious elements which have been consumed for decades on the furnace grates, all going up in smoke and being lost to human use, it becomes clear that the new method [coking] has not come too soon,” he wrote. A coking process yielded coke suitable for fuel and steel production, along with valuable coal chemicals, which were collectively worth $12 per ton.
This concept is particularly relevant today because sulphur dioxide, a contributor to acid rain, is subject to environmental regulations. The obvious approach is to scrub it from the stack gases at added cost to the user. The profitable approach, as demonstrated by Ford, is to remove the sulphur during the coking process and sell it as ammonium sulphate. This yields a saleable product instead of what ISO 14001 would call an “environmental aspect.” This kind of thinking can, in combination with ISO 14001, contribute substantially to the bottom line. It is also necessary to recognize that material and energy conservation go hand in hand, which means ISO 14001 and ISO 50001 should be used synergistically to achieve the best results.
Material and energy conservation are inseparable agendas
Standard evaluation of any chemical process includes a material and energy balance in which resource inputs must balance the process’s outputs. This forces all waste streams to become visible, which encourages chemical engineers to look for ways to use the waste or avoid its production in the first place. The analysis pays explicit attention to energy that is carried by material streams, and chemical engineers look for ways to recover this energy as well.
The material and energy balance concept can be extended to discrete manufacturing processes by paying attention not only to the bill of materials (BOM) or process inputs, but also to everything that is thrown away, such as spent cutting fluids and metal chips from machining processes. I have recommended a bill of products or bill of outputs to force this waste to become visible. In summary, the frequent interrelation between material and energy waste suggests combining ISO 14001 and ISO 50001 in practice, if not in the actual wording of the standards, for maximum results. The GHG aspect is, however, a counterproductive distraction.
The GHG agenda is counterproductive
I believe GHG reduction to be a politically correct agenda that has no place in sound business decisions. Its evident purpose is to enrich special interests that wish to trade in carbon credits or sell renewable energy products or services that cannot pass a Net Present Value analysis without government support or intervention. (See Gillibrand Kirsten’s “Cap and Trade Could be a Boon to New York,” in the Oct. 21, 2009, edition of the Wall Street Journal.) Diverting hundreds of billions, if not trillions, of dollars in economic resources to “fight global warming” is quite likely to emulate King Canute’s futile command that the tide not come in. It must be noted that the world has gotten into and out of several ice ages with no anthropogenic intervention whatsoever.
It is in fact socially irresponsible to buy carbon offsets or pay extra money for cost-inefficient renewable energy. Stakeholders such as employees, suppliers, customers, and investors must pay for this waste in one form or another, and waste of stakeholder resources is poor stewardship by definition. Purchase of a carbon offset can even pay for the same energy waste twice: first through elimination of any perceived need to address the inefficiency itself, and second through the purchase of what is essentially a medieval indulgence for sins. I prefer to pay for waste not even once.
It is meanwhile good practice to limit performance metrics to as few as possible, and the carbon footprint does not belong on the list when far superior techniques are available. Wasted energy from noncarbon sources is invisible to a GHG metric, but it cannot hide from a material and energy balance. No material or energy waste can hide from this powerful analytical technique.
Any activity that reduces energy waste, whether in the factory or from inefficient logistics and transportation, will however also reduce GHG emissions if the energy in question comes from fossil fuels. Identifying and eliminating all forms of energy waste, regardless of the energy source, is therefore the right thing for the right reason: improvement of value for all the enterprise’s stakeholders, which is genuine social responsibility.