Analyst Report: Sustainability Reporting Software: An Overview


With the growing recognition that global warming demands a business response, many companies are budgeting for climate-change plans. These plans aim to reduce energy consumption and greenhouse gas emissions across a wide range of activities, including procurement, manufacturing, warehousing, distribution, retailing, IT, waste disposal, and regulatory compliance. In drawing up and implementing these plans, though, businesses have made an unexpected discovery: The shift to greener operations creates competitive advantages by cutting costs, preparing for regulation of carbon emissions and presenting an attractively green ethos to the market. Sustainable business, it turns out, is good business.

To help implement their plans, companies can choose from a variety of enterprise sustainability software, also known as carbon management software, delivered via a Web browser in the form of Software as a Service. These systems collect resource-consumption data distributed geographically and functionally across the enterprise including electricity metering, transportation fuel costs and emissions from manufacturing and production facilities. The objective is to bring this data into one place where it can be examined and analyzed comprehensively.

Sustainability software covers three broad areas. One category is aimed at IT and helps manage energy consumption in data centers. A second category monitors and analyzes the flow of electricity in smart-grid installations. The third helps enterprises manage resources, emissions and waste. It collects data and offers visualization tools. The most advanced systems offer sophisticated modeling capabilities, which can aid greatly in formulating and implementing strategies for reducing an enterprise’s environmental footprint.

This third category is the subject of this report. While the green IT and smart-grid categories are relatively mature, the enterprise market is still taking shape. Moreover, this area has potential to become the largest by far. While the traditional market for sustainability software consists of Fortune 500 companies, smaller operations are beginning to recognize the benefits. Sustainability software will become attractive to businesses of all sizes and sectors as industries develop standards for tracking, evaluating, and reporting greenhouse gas emissions and as government regulations spur trade in carbon credits and environmental labeling of consumer products.

This report surveys the history of enterprise sustainability software systems, their capabilities, and how they’re being used in a variety of industries. It also offers recommendations for companies interested in using these tools. Among its key findings are the following:

  • The enterprise sustainability software market is young. Features and functions are still evolving and diversifying.
  • The next wave of sustainability software will deliver the ability to better simulate and manage business processes.
  • Market consolidation is expected over the next 12 to 24 months.
  • New vertical industry standards are likely to be approved over the next two years.   Eventually they will be incorporated into sustainability software.
  • Mandatory labeling of atmospheric carbon emissions associated with a given product is still more than five years away.
  • The cost of sustainability software isn’t entirely predictable, as installation requires integration services.

Table of Contents

  1. Summary
  2. Sustainability Software Overview
    1. Product Capabilities
    2. System Cost
    3. Two Classes of Vendor
  3. Market Background
    1. Roots in Regulation
    2. More Efficient Supply Chains
    3. Delivery via Software as a Service
  4. Market Drivers
    1. Operational Efficiency
    2. Emerging Standards
    3. Product Labeling for Consumer Appeal
    4. The Market for Emission Credits
    5. Public Support for Sustainable Businesses
  5. Case Studies
    1. Becker Underwood
    2. University of North Carolina at Chapel Hill
    3. ConocoPhillips Norway
    4. Tesco
  6. Recommended Actions
    1. Environmental Auditing
    2. Integration
  7. Conclusion
  8. Appendix: Product Profiles
  9. About the Author

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