How do Climate Change and Net Zero Guidelines affect your Quality Management System and YOUR BUSINESS?

By Angelo Scangas, CEO and Chief Climate Officer, Quality Support Group, Inc.

What is Climate Change?

Climate Change refers to long-term shifts in temperatures and weather patterns.  These changes can have drastic impacts on the world with increasing temperatures and more extreme and volatile weather.  We are seeing in real time the effects of climate change with each year hitting new record temperatures.  Depending on where you are in the world, climate change can have a drastically different impact on your business. 

Net Zero Guidelines

Released in 2022, the IWA 42:2022(E) Net Zero Guidelines provide organizations with a systematic framework for transitioning to net-zero emissions. These guidelines offer practical guidance on setting ambitious emissions reduction targets, identifying emission sources, implementing mitigation measures, and monitoring progress towards carbon neutrality. By following the Net Zero Guidelines, organizations can align their operations with global climate objectives and contribute significantly to mitigating climate change.

Key Components of the Net Zero Guidelines

• • Science-Based Target Setting: The guidelines emphasize the importance of setting emissions reduction targets based on the latest climate science, ensuring that organizations contribute meaningfully to global mitigation efforts.

• • Scope Definition: Clear delineation of emission scope enables organizations to account for and manage their entire carbon footprint effectively.

• • Prioritizing Emissions Reduction: While carbon offsetting and removal are valuable tools, the guidelines emphasize the importance of emissions reduction efforts to achieve net zero.

• Transparency and Accountability: Transparent reporting of emissions data and progress towards net zero is essential for building credibility and trust among stakeholders.

Industries at the Forefront

High Energy Consumption Industries:

• • Aluminum and Steel Manufacturing: These sectors, known for their high energy demands, face increased pressure to reduce their carbon footprint. Adapting their Business to include energy-saving technologies and processes is crucial.

• • Cement Production: As one of the most significant contributors to CO2 emissions, the cement industry stands to benefit substantially from integrating climate considerations. Strategies like using alternative raw materials and fuels, improving process efficiency, and investing in carbon capture technology are pivotal.

Emission-Intensive Sectors:

• • Transportation and Logistics: These sectors must account for emissions in their Business by optimizing routes to reduce fuel consumption, investing in low-emission vehicles, and exploring electric alternatives for their fleets.

• • Agriculture and Livestock: Faced with methane emissions, these industries can adopt sustainable farming practices, better waste management, and precision agriculture techniques to improve quality and environmental outcomes.

Manufacturing:

• • Any manufacturing facility can benefit from conducting energy audits and optimizing production schedules to reduce energy usage, leading to cost savings and a lower environmental impact.

Technology and IT Services:

• • Companies in the tech sector can design data centers with reduced energy consumption and encourage telecommuting to decrease their carbon footprint.

Hospitality Industry:

• • Hotels and restaurants can reduce waste, improve energy management, and source locally to align with climate change requirements.

Encouraging Renewable Energy Adoption – All Sectors:

• Organizations of all types are encouraged to integrate renewable energy sources into their operations, whether through on-site solar panels or purchasing green energy, which can be an integral part of their Business and commitment to addressing climate change.

Climate Change amendments from ISO

In addition to the Net Zero Guidelines, the IAF/ISO Joint Communique highlights the importance of embedding climate considerations into ISO Management Systems Standards (MSS). This joint initiative emphasizes that ISO standards such as ISO 9001 (quality management), ISO 14001 (environmental management), and ISO 45001 (occupational health and safety) should incorporate climate change considerations to ensure organizational resilience and sustainability.

In February 2024, the International Organization for Standardization (ISO) released amendments to include climate change considerations.

The climate change amendment applies to all Type A ISO management system standards, i.e. those that specify requirements and to which companies can be certified.  This includes the following standards:  ISO 14001, ISO 15378, ISO 19443, ISO 21001, ISO 22000, ISO 22301, ISO 28000, ISO 29001, ISO 37001, ISO 45001, ISO 50001, ISO 9001, ISO/IEC 20000 and ISO/IEC 27001.

The new text required in MSS (Management System Standards), as outlined in Appendix 2 of Annex SL of the ISO/IEC Directives, Part 1, emphasizes the importance of climate change adaptation and mitigation within organizational contexts. Specifically, it includes additional wording to two key clauses: 

• • Clause 4.1 – Understanding the organization and its context: The organization is now required to determine whether climate change is a relevant issue that affects its ability to achieve its intended results. This involves identifying external and internal issues related to climate change that may impact the organization’s purpose and objectives. 

• • Clause 4.2 – Understanding the needs and expectations of interested parties: The organization must now consider climate change-related requirements of relevant interested parties. This includes determining which requirements related to climate change will be addressed through the organization’s management system. 

Climate Change and Your Business

While new rules requiring companies to disclose greenhouse-gas emissions and other climate-related risks may be on hold, accounting experts say one thing is certain: Mandates to disclose such climate data aren’t going away anytime soon.

Climate Change significantly impacts a Business in several ways, particularly as organizations increasingly recognize the need to adapt their practices to mitigate environmental risks and ensure sustainable operations. Here are some of the ways in which climate change can affect your Business processes:

1. 1. Supply Chain Disruptions: Climate change can lead to more frequent and severe weather events such as hurricanes, floods, or droughts, which can disrupt supply chains. Processes must be robust enough to manage these risks by ensuring alternative suppliers, adjusting inventory levels, and planning for logistical contingencies.
   2. Regulatory Compliance: As governments around the world introduce stricter environmental regulations to combat climate change, companies must adapt their Business to remain compliant. This includes integrating environmental management into quality management processes, ensuring that products and practices meet new standards for emissions, waste management, and resource usage.
   3. Product Design and Development: Climate change necessitates innovation in product design to reduce environmental impacts. The design and development process should facilitate the integration of sustainable design principles, such as energy efficiency, recyclability, and reduced material usage.
   4. Operational Adjustments: Changes in climate can affect the operational conditions. For example, increased temperatures can affect machinery performance and worker productivity. A company needs to incorporate adaptive operational practices such as modified maintenance schedules, enhanced cooling systems, and changes in work hours to mitigate these impacts.
   5. Customer Expectations: As awareness of climate change increases, so do customer expectations for sustainable products and practices. Sales and marketing  must include mechanisms to gather and respond to customer feedback on environmental performance and to ensure that the organization’s objectives align with market demands for sustainability.
   6. Risk Management: Climate change introduces new risks that must be managed under all Business processes. This includes assessing the risks associated with environmental factors and integrating climate-related scenarios in the risk management processes.
   7. Corporate Responsibility and Image: Companies are increasingly judged on their environmental stewardship as part of their overall quality and reliability. A Business must therefore support initiatives that enhance the company’s reputation by promoting transparency, environmental accountability, and community engagement.
   8. Energy and Resource Management: Effective management of resources becomes crucial as climate change might lead to scarcity of certain materials or energy sources. All processes should help organizations optimize their use of resources and energy, including monitoring consumption, improving efficiencies, and transitioning to renewable energy sources.

ISO Climate Change Standards

ISO has several standards that play an essential role in climate action, helping to monitor climate change, quantify greenhouse gas emissions and promote good practice in environmental management.

One notable example is the ISO 14000 family of standards for environmental management systems, which details practical tools for organizations to manage the impact of their activities on the environment. This suite of standards, which includes one of ISO’s most widely used standards – ISO 14001, Environmental management systems – Requirements with guidance for use, covers overall frameworks, audits, communications, labelling, life-cycle analysis and methods to mitigate and adapt to climate change.

Aligned with the Greenhouse Gas (GHG) Protocol and compatible with most GHG programs, the ISO 14064 series gives specifications for the quantification, monitoring and validation/verification of greenhouse gas emissions, while ISO 14067 specifies the principles, requirements and guidelines for quantifying and reporting the carbon footprint of products. Other standards in this area include ISO 14080, which gives organizations a framework to develop consistent, comparable and improved methodologies in the fight against climate change, and future ISO Guide 84, Guidelines for addressing climate change in standards, which is aimed at those involved in standards development.

In addition, PAS 2060 is the internationally recognized specification for carbon neutrality published by BSI. It sets out the requirements for quantifying, reducing and offsetting greenhouse gas (GHG) emissions for organizations and products.

How can QSG support you?

QSG can help your business in the following ways:

1. 1. Review and suggest modifications to the Business and your Management System Standards (9001, 14001, etc.).  We will thoroughly analyze all internal and external issues, along with the needs and expectations of relevant interested parties, as they relate to its management system and determine what needs to be addressed.
   2. Conduct an assessment and support the implementation of the Climate Change Standards listed above.

Please contact Angelo Scangas at [email protected] to schedule a meeting.