In part two of her series, Alison Smith explores the ever-growing world of environmental software
More and more businesses are abandoning their overloaded spreadsheets in favour of commercial software to help manage their environmental impacts. This trend is driven by the increasing complexity of environmental regulations and reporting needs as well as the potential for software to help cut costs.
More than 200 large companies bought carbon management software in 2010, according to Groom Energy, but many are still hesitating. A recent survey by the Greenhouse Gas Management Institute showed that more than half of respondents were still using spreadsheets. Interestingly, those using software tended to be those who classified themselves as having “expert” levels of knowledge on greenhouse-gas (GHG) management.
More than carbon
Environmental software has been around since the 1980s, with early products focused on compliance with health and safety regulations in the traditional “polluting” industries such as chemicals, iron and steel, and energy.
But with rising concern over climate change during the last decade, a new class of software has emerged aimed at measuring and managing GHG emissions. At first this was driven by regulations such as the EU emission trading scheme (ETS), covering large energy users, but the scope has gradually extended to target firms of all sizes and in all sectors.
Vendors from a wide variety of backgrounds have developed the new class of carbon management software. Some are carbon specialists – new start-ups, academic groups or carbon consulting firms moving into software. Others include purveyors of traditional environment, health and safety (EHS) software, energy and asset management software or corporate social responsibility reporting tools who have added carbon management modules to their existing software suites. And large business software vendors such as Microsoft, CA, SAS and SAP are now getting in on the act.
Despite the frenzied outpouring of new carbon management tools onto the market over the last few years, the realisation is now dawning that carbon is just one part of the wider issue of sustainability. This has undoubtedly been prompted by a steady increase in the costs of waste disposal, water use and other resources, as well as by greater demands for transparency and corporate responsibility by both customers and investors.
Many tools now include water and waste as well as carbon, and there is a trend towards more integrated reporting of environmental, social and economic indicators.
Below we take a look at the main types of tool on offer. Examples of key vendors and products are given but the list is illustrative, not exhaustive.
Basic carbon calculators
A huge number of free carbon calculators are available on the internet, aimed at households or small businesses. These are often provided by non-governmental organisations or government agencies, although some are from consultancies.
Generally, the user is asked to enter annual gas and electricity use, plus either transport fuel use or the mileage travelled in different vehicles (car, plane, train etc). This may be supplemented by questions about recycling, waste generation, food consumption, paper use or the adoption of energy-efficient lights or appliances.
Simple calculators are a great way to get a quick and easy estimate of the carbon footprint of small companies, and can also give a rough idea of the potential to achieve cost and carbon savings. Some go further. The SMEasure tool from Oxford University, for example, allows users to plot their gas and electricity use against weather data, and benchmark their own energy use against similar buildings. A tool provided by government agency WRAP allows the user to see how much money and carbon could be saved by cutting energy and resource use, and Forum for the Future has tools to help with sustainable procurement. Larger companies, however, and those with more complex impacts, will need a more sophisticated solution.
Managing carbon
These tools have been mainly developed over the past few years, and are referred to by a variety of descriptions including carbon footprinting, carbon accounting or carbon management. They are typically set up to measure carbon emissions to comply with legislation such as the ETS or the UK’s Carbon Reduction Commitment Energy Efficiency scheme, and to help with voluntary reporting initiatives such as the Carbon Disclosure Project.
Vendors come from mixed backgrounds. Some originated as carbon consultants – examples include Best Foot Forward, which still offers consultancy in parallel with its software, and Greenstone Carbon Management, which has switched entirely to software provision. Some are new start-ups such as Carbon Hub, CA ecoSoftware, Carbon Guerrilla, CloudApps, CSRWare, ENXSuite, Hara and Verteego. CarbonOps, which has developed its CarbonView software, came from a carbon trading background.
Many of the tools in this category are aimed at large businesses, although several vendors have products affordable for smaller companies. Prices range from a free offering for small organisations (from Best Foot Forward’s product range) to five- or six-figure prices from companies such as Hara, who target multinationals. Most products are now offered as software as a service, with an annual fee rather than an upfront payment and with software hosted and maintained by the vendor.
As well as carbon measurement and reporting, most of these tools contain features to help reduce emissions. These might include setting targets, forecasting, costing different options for reducing emissions, scenario analysis, monitoring progress and managing workflow. Although the primary focus of these tools is carbon and other GHGs, many also assess waste disposal and water consumption, and the Hara tool can include other resource use, such as paper consumption.
Hara actually refers to its product as an environmental and energy management solution. Nick Martin, managing director of Hara in Europe, the Middle East and Africa, says that the product provides a “single system of record for energy, waste, water and CO2” among others things.
Such software or systems leads to some overlap with the next category, as tools with energy, carbon, water and waste capabilities often market themselves as “sustainability” software. Other examples include CA’s ecoSoftware and CSRWare. For the purposes of this report, however, we define “sustainability tools” as those which include a wide range of economic, social and environmental indicators.
Sustainability and CSR
Sustainability and corporate social responsibility (CSR) reporting tools have evolved to help companies collect and publish data for their CSR or responsibility reports and for other initiatives such as the GRI (Global Reporting Initiative) and the Dow Jones Sustainability Index.
The key distinguishing feature of these tools is that they allow reporting of a wide range of indicators, which may include economic and social metrics, such as employment diversity, charitable donations and tax payments as well as environmental impacts, for example air pollution and land use. Often these indicators can be user-defined.
Today, of course, GHGs are an essential part of CSR reporting, and are included in all these tools. However, as management of carbon emissions tends to require more detailed data gathering and analysis than reporting of, say, employment statistics, some vendors provide a separate energy and carbon module. Customers who buy sustainability reporting tools without a carbon module often tend to use them in conjunction with a specialist energy management tool from a different supplier.
Examples include credit360, Enablon’s CSR module, SERAM, SoFi by PE International and SAS Sustainability Reporting.
A handful of tools fall between this category and the preceding one: they offer a wide range of environmental impacts, but do not contain economic and social indicators. Examples include Sustain4, an environmental benchmarking tool, and Best Foot Forward’s ecological footprint tools.
Some of these tools are focused mainly on reporting and communicating with stakeholders, whereas others offer a range of impact reduction functions. This type of tool is popular with customer-facing organisations, such as retail companies or those with a strong brand value, where transparency and image are important.
Environmental compliance suites
EHS software has been developed mainly for heavy industry. It is typically supplied as a suite of modules, which handle compliance with health and safety regulations, record routine and accidental air pollution, monitor the storage and disposal of hazardous waste, report accidental spills and set up emergency response plans. Developers are now adding carbon accounting modules. This is a well-established sector, being the oldest branch of the environmental software industry, and it includes four of the eight companies named as “market leaders” in the 2010 Groom Energy report – Enablon, Enviance, IHS and ProcessMAP – as well as a range of other vendors, including Intelex, CINTELLATE and Perillon.
EHS suites with carbon modules may be the best choice for industrial companies with varied impacts and heavy regulatory requirements, but office-based companies might find that a specialist carbon tool is more appropriate for their needs.
Environmental modules as extra
It is no surprise that large software companies have started to target the booming environmental market. The general approach is to add a carbon accounting module to an existing ERP (enterprise resource planning) package. ERP software tracks resource flows including materials, personnel and finance across an organisation, covering aspects such as manufacturing workflow, purchasing, sales, invoicing, accounting, project management, customer contact, payroll and supply-chain management. The main advantage of these packages is that customers can integrate carbon accounting with other business and financial information. For example, estimates of carbon emissions can be readily derived from purchases of fuel and electricity, and carbon taxes or trading information can be linked seamlessly to company accounts.
The downside is that the vendors are not carbon or environment experts. Some have entered the market with the help of specialists. SAP, for example, purchased Carbon Impact, while Oracle partnered with NDevr. Others have developed their own offerings. These include Microsoft Dynamics, SAS for Sustainability and Unit4’s Sustain4. Vendors in this category benefit from a very large existing customer base and it will be interesting to see if this can counter their lack of an environmental track record.
Energy, asset and facilities management
Energy and facilities management packages are focused on reducing energy and other utility costs. They are often linked to automatic metering, building energy controls and bill payment systems. Asset management software aims to minimise the cost of deploying and maintaining company assets including buildings and equipment, and is linked to energy management through tracking of energy-using devices such as computers.
Suppliers such as EnerNOC, Johnson Controls, IntegratedFM, Pace, Summit Energy and Verisae have started to add carbon management modules to their software. The EnerNoc suite of solutions, for example, now includes DemandSmart, designed to help organisations reduce electricity use; EfficiencySmart, which claims to help users identify low-cost or no-cost opportunities to achieve savings equal to 15% of addressable energy spend; SupplySmart, which evaluates an organisation’s different energy options and advises it on how to obtain the most favourable energy contracts; and CarbonSmart, a carbon accounting application. Similarly, the energy software from Verisae includes supply and demand management tools and a smart meter option.
The potential advantage of this type of tool is the ease with which very detailed data on building and appliance energy use can be gathered and analysed, giving great potential to identify opportunities for savings.
Footprinting and LCA
Although the main focus so far has been on company-level carbon footprinting, there is an increasing interest on analysing impacts at the product or process level. Customers want to know which products are “greenest”, and manufacturers need to be able to demonstrate their eco-credentials. Large retailers such as Tesco are driving a trend towards eco-labelling of products.
Product-level footprinting is complex and data is in short supply, but software tools are starting to appear on the market. Life-cycle analysis (LCA) tools such as PE International’s GaBi can estimate whole-life environmental impacts for a product from manufacture through use to disposal.
Best Foot Forward offers product carbon-footprinting tools and a product development package, while Carbonostics has a tool for assessing the carbon impact of food products.
Verisae and CarbonView and other vendors use supply-chain information to help track carbon at the product level. Foresite Systems has developed GEMS product-compliance software to help the manufacturing sector comply with REACH (the EU Regulation on the Registration, Evaluation, Authorisation and restriction of Chemicals), waste electrical and electronic equipment, or WEEE, Directive, the restriction of hazardous substances or RoHS Directive, the eco-design Directive and the Producer Responsibility Obligations (Packaging Waste) Regulations.
Sector-specific tools
Some sectors have particular requirements that lie outside the scope of generic software tools. Specialist tools have emerged for applications ranging from building design to fleet management and from the water industry to the information technology (IT) sector.
Examples include Best Foot Forward’s footprinting tools for aviation, furniture manufacture, publishing, events, packaging, offices and government agencies, and CSRware’s GreenIT for managing energy efficiency in the IT industry. Best Foot Forward says its footprinting tools will help identify carbon hotspots and over-dependence on vulnerable resources, while CSRware’s claims for its software include helping users to reduce energy consumption and avoid regulatory risk.
Some consultants are developing their own in-house software. An example is coastal engineering consultancy HR Wallingford’s HRCAT tool.
Spoilt for choice
Even for experts, the choice of vendors and products in the marketplace is bewildering. The market is young and dynamic, characterised by a constant round of new product launches, takeovers, partnerships and mergers. The new Environment Tools Directory currently lists more than 400 entries.
Selecting the right tool is not easy. The third and final article in our series will provide more detailed guidance on how to find a product with the right features to match your organisation’s needs.
