Enterprise vendors embrace carbon management

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Customer organizations, for their part, must recognize that environmental considerations will become steadily more important to their success, and that they must start factoring them into their IT and overall business strategies.

MIS Asia, By Warren Wilson
09 Sep 2009

Sensing an opportunity in the proliferation of environmental regulations, enterprise solution providers are rushing to develop, acquire or partner with the capabilities that companies will need to monitor, manage and report their emissions of carbon dioxide, the main greenhouse gas. Application vendors, systems integrators and consultants recognize that these capabilities will be much in demand as CO2 limits and carbon-trading schemes are put in place around the globe. Enterprises themselves need to be aware of this trend and recognize the connection between environmental management and overall enterprise management.

Enterprise solution providers are embracing carbon management

In one of the latest moves, EDS has partnered with SAP’s Australia/New Zealand unit to develop a new solution aimed at helping Australian companies comply with the new emissions requirements they face under national legislation adopted in 2007.

The solution will combine EDS’s existing carbon emissions management service, which focuses on IT assets, with SAP’s Environmental Compliance solution to create an enterprise platform. The solution will help organizations to calculate, record and analyze carbon emissions across their businesses, track emissions against key performance indicators, and generate the data required under the new legislation.

Announced in July, the alliance with EDS followed SAP’s acquisition two months earlier of Clear Standards, an independent provider of carbon management solutions. Archrival Oracle had recently made a similar move, partnering with ESS in late 2008 to combine ESS’s environmental data management solution with Oracle’s governance, risk and compliance manager and business intelligence suite.

Even earlier, in December 2007, IBM partnered with Evergreen Energy on a solution called GreenCert that can calculate carbon reductions across multiple industries and devices. Meanwhile, enterprise application vendors such as IFS and SAS Institute have developed their own carbon and environmental management capabilities over the past couple of years.

Why enterprise vendors are so interested

The common thread linking all of these moves is the natural fit between enterprise applications and the management of energy, carbon and other environmental data. The monitoring, management, analysis and reporting of energy consumption and carbon emissions is simply another stream of data, similar to the streams of financial, inventory and other business process data already managed by enterprise applications such as enterprise resource planning, supply chain management and business intelligence. It makes more sense to extend those current capabilities than to invent a new solution dedicated to environmental data. Furthermore, environmental data is most useful when integrated with those other data streams – for example, so that companies can understand the impact of environmental compliance on financial performance. For similar reasons, environmental data should also be available to governance, risk and compliance, and analytics solutions.

Trend driven by regulation, but also by consumer and investor interest

Carbon regulation is under discussion in various places around the globe. Australia was one of the first to adopt national requirements, but similar moves are afoot elsewhere. In the US, after years of inaction, the Environmental Protection Agency has proposed a national reporting system for greenhouse gases, the main culprit in global warming caused by human activity, and the Congress is considering a climate-change bill that would set the country’s first limits on greenhouse gases and in its present form includes a carbon cap-and-trade system.

The prospect of such regulation has drawn interest from investment banks and brokerages because of its potential to create multi-billion-dollar carbon markets. Consumers, too, are helping to drive corporate interest in the environment as they increasingly prefer products that merit the “green” label. Responding to such concerns, the European Union has issued directives on eco-friendly design of energy-using products; meanwhile, in France, a group of governmental, non-governmental and business organizations is developing product-label guidelines, aiming to complete them by the end of 2010.

This is an even tougher challenge than managing energy and carbon data for a single organization. To provide accurate carbon accounting across a product’s full lifecycle is significantly more complex. It will require collecting and aggregating data at every step of a product’s manufacture, use and disposal, and the data must be collected and aggregated using consistent methodologies if the results are to have any real meaning.

Enterprise solution providers recognize that carbon management is an important step, but only one step toward more comprehensive solutions such as sustainable supply chain management and sustainable enterprise resource planning – and that much more investment will be required. Customer organizations, for their part, must recognize that environmental considerations will become steadily more important to their success, and that they must start factoring them into their IT and overall business strategies.

Warren Wilson covers a topic of increasing importance for enterprise software vendors: the success of their partner ecosystems.