Firms At Risk From Excel-Based Carbon Management

Next year, large UK organisations will be required by law to account for their carbon footprint – but most are still relying on inadequate software for the job, according to green analyst firm Verdantix.

Next April, UK firms using 6000MWh of electricity a year must join the Carbon Reduction Commitment (CRC), a cap-and-trade scheme where they must buy credits and account for the carbon dioxide emissions they produce.

Alongside the huge effort to meet carbon targets, firms have a big challenge in simply getting the software in place to monitor their progress. Firms like Tesco have adopted carbon accounting systems, but most companies are not using adequate software, according to a Verdantix report on the market for carbon accounting software,

“We were horrified by the prevalence of Microsoft Excel as the tool of choice to collect and store carbon data” said David Metcalfe, author of the report, which gathered data from 16 sustainability executives at firms with annual revenues of $2 billion. “This immature approach to data management triggers a wide range of risks such as inaccurate reporting, an inability to forecast future emissions and constricted communications on sustainability performance.”

Excel does not support workflows or provide a reliable audit trail that will be required by the CRC regulations, Metcalfe told eWEEK Europe at a meeting on Monday. Despite this, 63 percent of firms use it to manage carbon.

Others used in-house or third-party software, but this is “often just a glorified database,” said Metcalfe, dismissing it as a “bronze bullet”. The majority of the group agreed that the software was essential, but don’t know the vendors and still have a lot of work to do on adopting it and training staff to use it.

“Carbon managers told us that they are confused about which vendor to
buy from,” said Metcalfe. “More than 50 percent of the individuals we interviewed had not even heard of 90 percent of the vendors.”

Verdantix evaluated 22 carbon management software productsand placed them in its own “green quadrant”. The company reckons six vendors – Enablon, Enviance, ESS, Hara, IHS and ProcessMAP – are leaders, with more installations and better features

There are five vendors whose features make them “challengers”, including Carbonetworks, Greenstone Carbon Management, SAP, SAS and CA, whose ecoSoftware was adopted by Tesco.

Verdantix also picked out three specialist vendors, with Camco offering good energy management, CarbonView strong on supply chains and Germany’s PE
International ohaving good multi-national abilities. And there are eight new entrants, Carbon Hub, Cintellate, Foresite Systems, Green Oak Solutions, Intelex Technologies, Perillon, Tradeslot and Verteego.

Companies need to choose software which suits their own market sector, said Metcalfe: “Emissions intensive firms like oil and gas majors need the support
of vendors with global support and robust data management like Enablon and
IHS,” he said

“By contrast, managers in retail and consumer goods with a complex sustainability programme that influences brand image should consider vendors like CA, PE International and SAS. For firms and public sector organizations with needs focused on carbon management, reporting and reductions, vendors like Carbon Hub, Carbonetworks, Greenstone and SAP should get on the shortlist.”

The report also revealed that the data used by companies is also inadequate. Three quarters of the “sustainability leaders” in the firms admitted to using estimated electricity bills, and not collecting data frequently enough.

Fifty per cent of the firms in the study only collect energy and carbon data annually, giving them no chance to react to and manage their emissions.

Analyst firm Gartner believes that legislation such as the CRC will be the main catalyst for green IT initiatives – while other observers such as Microsoft’s Steve Ballmer believe that the recession itself will be enough incentive to save money Previous reports have also found UK IT departments are unprepared for carbon management.