1. Energy Management Driving Operational & Financial Performance Don Macdonald Sustainability & Energy Program Director Don.macdonald@us.dqs-ul.com http://www.linkedin.com/pub/don-macdonald- leed-ap-rabqsa/0/595/715/

2. Market Adoption Indicators 2014 certifications ISO 9001 ROI benchmarks 9-13% ISO 14001 ROI Benchmarks 7-12% ISO 50001 Published ROI Data Suggests 6.5-17% range expected within 1-2 yrs. Performance metrics (self-defined) incorporated Web-based & continuous performance tools Measured benchmarking Integrated with ISO 9001, 14001, & SEP, CSR Risk Mgmt Risk Mgmt Quality Environ & GHG Mgmt Environ & GHG Mgmt Energy Mgmt Energy Mgmt LEED CSR

3. Multi-Nationals Adopting ISO 50001 - > 4000 to Date 3M Coca-Cola Alcoa Allsteel - HON Amcor PET Bentley Prince Street Cook Composites Sikorsky OLAM Spices MedImmune Cummins Ingersoll Rand ISO 50001 CNH / Fiat Schneider Siemens ABB 3M Coca-Cola Alcoa Allsteel - HON Amcor PET Bentley Prince Street Cook Composites Sikorsky OLAM Spices MedImmune Cummins Ingersoll Rand ISO 50001 CNH / Fiat Schneider Siemens ABB Didion Milling, Inc Dow Chemical Eaton General Dynamics Free scale Semi Haynes International Holcim Lockheed Martin Cooper Tire Republic Conduit Bridgestone Tire Didion Milling, Inc Dow Chemical Eaton General Dynamics Free scale Semi Haynes International Holcim Lockheed Martin Cooper Tire Republic Conduit Bridgestone Tire Kenworth Trucks Neenah Foundry Company Nissan Owens Corning Schneider Electric Spirax Sarco Traco Volvo World Kitchen Harbec United States Mint Kenworth Trucks Neenah Foundry Company Nissan Owens Corning Schneider Electric Spirax Sarco Traco Volvo World Kitchen Harbec United States Mint Commercial Superior Energy Performance Pilots: Cleveland Clinic US GSA Grubb & Ellis Company Marriott International, Inc. MIT Campus’s Target Corporation Wal-mart Stores, Inc.

4. Benchmark EnMS Maturity Updated 2011, 7% Energy

5. Energy efficiency Benchmarking Maturity EDF, 2013

6. Financial Criteria Benchmarking Maturity EDF, 2013

7. Re Deployment of Operating Cost Savings EDF, 2013

8. 8 Source: UNIDO 2010 Source: UNIDO Energy Investments & Operations Why Energy Audits Aren’t Enough

9. Source: DOE

10. Organizations That Measure ROI/IRR of CSR 2009 - 2011 Proportion of clients reporting Program ROI / IRR increasing Internal resource constraints continue, functional silo’s Breadth of adoption increasing

11. Executive Leadership is critical to ‘Mind the Gap’ Facility managers typical energy champions

12. Harnessing the Power of a Process Business processes for competitive advantage: Six Sigma Lean Manufacturing Continuous Improvement ISO 9001 ISO 14001 Plan-do-check-act Formal energy management standards (ANSI, BSI): JCI Study - 83 Organizations surveyed…

13. State of the Art – Inconsistent use of Management Processes Result: Lower ROI, Mixed Results JCI Study - 83 Organizations surveyed… Training for employees: 76% Formal review of energy policy - CSR: 47% Incentives for energy efficiency success: 45% Effective & empowered energy team: 41% Enterprise level energy data: 29% Corporate reduction goal: 28% Energy action plan for organization: 28% Formal energy policy: 27% C-level responsibility: 27% Adopted energy standard: 27%

14. Management Systems Strategy – Technical and Behavioral Focus EnMS on plants, buildings and operations above target. Drive Process Improvement Drive ROI/IRR Drive Integrated CSR Linkage to GHG Focus EnMS on plants, buildings and operations above target. Drive Process Improvement Drive ROI/IRR Drive Integrated CSR Linkage to GHG

15. Energy Management System Best Practices

16. Step 1 – Commitment Step 2 - Data Step One : Secure Commitment from Top Management Set Energy Policy Define Scope and Boundaries Step Two: Collect, Track, and Analyze Energy Data Current and past energy use, consumption Estimate future energy use, consumption

17. Step 3 – Energy Use Step Three: Identify Key Energy Uses Facilities Systems Equipment Processes Relevant Variables Personnel (including on-site Contractors)

18. Step 4 - Baseline Step Four: Establish a Baseline Reference point for energy performance Outlines current energy performance Predicts future energy performance Provides benchmarking method

19. Step 5 - Opportunities Step 6 - Prioritize Step Five: Identify Energy-Saving Opportunities New Sources Renewable Sources Alternative Sources Step Six: Prioritize Opportunities Return on Investment Ease of Implementation

20. Implementation and Operation Competency, Training & Awareness Communication Documentation, Control of Documents Operational Control Design Procurement

21. Checking and Management Review Monitoring, Measurement and Analysis Evaluation of Compliance Internal Audit Non-Conformance, Correction, Corrective and Preventive Action Control of Records Management Review

22. EnMS and Other Standards Legal / Other requirements Significant Energy Use Objectives, Targets, Action Plans Evaluation of Compliance Design Procurement Management Responsibility ISO 9001:2008ISO 14001:2004 Common Elements with other ISO Systems:

23. Building a Best in Class Energy Management System 23

24. Building a Best in Class Energy Management System 24

25. EnMS & SEP Best Practice Mapping Organizational level BarriersBest Practices

26. EnMS & SEP Best Practice Mapping Capital level BarriersBest Practices

27. EnMS & SEP Best Practice Mapping Data level BarriersBest Practices

28. EnMS & SEP Best Practice Mapping Communication/PR level BarriersBest Practices

29. The Superior Energy Performance (SEP) Program

30. ISO 50001 /SEP Demonstration sites US

31. Source: DOE

32. DOE SEP Pilot Results Source: DOE

33. Results – Energy Cost Savings Source: DOE

34. Shareholder Perspectives EnMS – Accounting for Value Profit Margin –Procurement - energy hedging –Product design can embody energy considerations –Supply chain costs - energy, raw material & transportation –Extend QMS and EMS systems whether certified or “Self Declared” Sales Growth –Life cycle energy reductions embedded in product manufacturing –Competitive advantage, less energy and related raw material processing Investment Working Capital –Reduced excess energy and materials, waste prevention, recycling, raw material substitution Investment Fixed Capital –Energy process modifications often lead to end-of-the-pipe pollution control facilities Tax Rate –Availability of grants, utility program credits, insurance ratings Cost of Capital –Improve loan characteristics –Energy risk management attracts shareholders which leads to lower cost of debt and equity –Non-disclosure of energy efficiency, like environmental performance may have short-term impacts that lead to premium capital costs

35. Results – Costs of Implementation In most cases ROI < 2 Yrs. Source: DOE

36. Case Studies, Results & Feedback from the Field

37. Staff Support A cross-functional energy management team is needed for effective implementation. –e.g., plant energy leader, plant leader, quality leaders, engineers. All types of employees can contribute to energy management –Line and production workers add separate sets of expertise Feedback from Facilities Other R&D should consider use of energy to produce a product. Achievements can bring recognition across the organization. Costs Capital investment is not always required to achieve cost savings. Change of mindset: lower price per unit of energy is not the only way to reduce energy costs Influence of Energy Management Managing energy has similar structure as managing cash, safety, health, environment and quality. Energy management becomes a way of doing business, instead of making improvements on project- by-project basis. Energy management becomes a shared responsibility across operations, maintenance, finance.

38. AU Optronics, Taiwan

39. St. Mary’s Cement

40. Save Energy Now – Best Practice Alternative Data Center Assessment Summary Verizon

41. Save Energy Now – Best practice Alternative Data Center Assessment Summary Lucas film

42. Briggs & Stratton – Best Practice Alternative

43. Dahanu Power Station, India

44. Delta Electronics

45. Schneider Global HQ Certified ISO14001 HQE Exploitation NF EN16001 ISO 50001: first certified building in the world! ÷4 Final energy consumption vs. previous sites in the area 80 kwh/m²/ an Final energy consumption ROI in 5 to 7 years

46. Schneider Electric Smyrna, TN ISO 50001 Certified, SEP Pathway

47. Haynes International

48. Pfizer Ireland – ISO 50001 Reduced energy and resource intensity, decrease CO2 emissions. Used ENERIT ISO 50001 IT Platform to facilitate certification.

49. 49 Sustainability CNH is part of Fiat Industrial – fully integrating the environment and society with economic objectives. 2010 Fiat Sustainability Report.. Certified Management Systems Commitment to sustainability includes having our manufacturing activities performed in responsible facilities that are certified to meet environmental, quality, safety and now energy management system standards. CNH / Fiat Certification – Building into CSR UL DQS Certified first plant

50. Volvo Absolute energy use and intensity - 38%, 2001 to 2010 As part of U.S.-DOE’s Save Energy Now, accomplished 10-year goal of 25% improvement in energy intensity in 2010 (29.6%) Goals 2010 to 2012 reduce idling losses – or energy use outside of production – by 50 percent by 15% per unit produced against a 2008 baseline.

51. Energy Management within ISO 14001 Programs Mass Transit Agency Leadership LA Metro, NY MTA

52. DOW

53.  2800 Staff / 2300 global Auditors, 76 offices in 55 countries  Over 20,000 customers, 100 countries UL DQS – Integrity, Competence and Trust in Management Systems