Companies used to go green only to comply with government regulations or to prove to customers and investors that...
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they were "environmentally friendly."
Now there's another reason that has more companies than ever before looking to enact sustainable business practices -- it saves them money.
And with that, a growing number of software companies are beginning to offer solutions to the problem of how to efficiently track and report emissions data – leaving customers facing the decision of whether to buy it.
"Is it something you have to do today? No. Tomorrow? No. But this is coming, and it's something you can't escape," said Warren Wilson, research director with Ovum.
SAP has been pushing its sustainability software lately, but it isn't the only company offering such software. All of the usual suspects -- Oracle, IBM, Microsoft, SAS -- are now emerging in the field of sustainability management.
According to Wilson, however, SAP's software is broader than other similar ones on the market.
"What SAP is trying to do is go broader here, and anticipate the day when companies are going to be facing a pretty broad set of obligations," Wilson said. "Not just energy and carbon but water and recycled materials and other pollutants. There's no universal reporting methodology yet. What SAP is trying to do is get ahead of the curve and provide a tool that will encompass all of those different areas of responsibility and simplify the reporting requirements."
There's early evidence that customers are buying into this as well. A total of 189 U.S.-based organizations surveyed by AMR Research focus on sustainable business performance in order to enhance their actual and anticipated environmental and regulatory compliance risk profiles, to further their green communication and marketing messages and, most importantly, to drive new levels of organizational efficiency and operational performance.
"Businesses increasingly understand that sustainability now goes beyond calculating and reporting your carbon footprint," said Peter Graf, SAP's chief sustainability officer and executive vice president of sustainability solutions. "It's about capitalizing on the full range of economic, environmental and social opportunities to improve business performance by developing and executing on strategic sustainability goals."
The study also found, however, that a stunning 93% of respondents either do not currently track their greenhouse gas emissions or find it difficult to do so.
"Companies are looking for smart, real-time sustainability tracking," said Stephen Stokes, an analyst with AMR Research.
SAP's sustainability software is aimed at making it easier for companies to keep track of and report emissions data.
"It's a full, all-encompassing suite of sustainability solutions," Stokes said. "It's not so much a sustainability tool -- it's a sustainability toolkit."
Basically, this is a performance management tool that gathers information that is relevant to things people would classify under sustainability, according to Chris McClean, an analyst with Forrester Research.
"Things that affect carbon footprint, electricity usage, transportation of fleet, workers. The focus is more on things that are more data centric, like electricity, but the idea is anything related to environmental impact," McClean said. "It gives you the ability to set objectives, track performance, track exceptions, to see where you want to be in a year or two and measure performance."
SAP's sustainability package can tell a business when it is wasting energy, down to a minute level. For example, a supermarket using the software could track the energy use in all of its facilities and be able to identify and immediately correct an inefficiency as small as an open refrigerator door.
Robert Farris, Hitachi Consulting's vice president for environmental sustainability solutions, said Hitachi implemented SAP carbon impact for its own consulting so it could understand its own environmental footprint.
"We knew travel would be big. But it was bigger than we thought. It was 80% of our environmental footprint," Farris said. "It really opened a lot of eyes to ways we can reduce it. We can reduce travel without jeopardizing the client or our services."
This type of "energy intelligence" is critical, Farris said.
"If a company that owns lots of buildings wants to know how to reduce energy, it's a good idea not to start replacing every window," he said. "You want to figure out where are the worst problems you want to solve first, where to focus your efforts, and then you can make the right decisions about capital investments."
For now, SAP's sustainability software is mostly targeting current customers. This would sit on top of the SAP infrastructure and, through a combination of automated and manual data gathering, bring all that data together in a centralized place, a data scheme that is common across the whole SAP suite.
Even for SAP shops, however, there is still a lot of manual data importation required to get started. The greatest risk to buying the software now, according to Ovum's Wilson, is the substantial time investment to manually input the data, and the cost associated with that process.
"It's certainly easier if you already have SAP IP infrastructure installed," he said.
Marc Fortier is a freelance writer who resides in Portsmouth, N.H. He has worked as a writer and editor in New Hampshire and Massachusetts since 1995.
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