Verdantix Says Ubiquitous Carbon And Energy Risks Accelerate Global Demand For Carbon Management Software
London, UK. October 1, 2009. The growing risks of inaction on carbon management will trigger a rush to invest in software that helps firms to capture and manage accurate and auditable carbon data, according to analysis of this nascent market by the independent research firm Verdantix. The report finds that executives have been very slow to realize that climate change legislation, structurally higher energy costs, incoming carbon costs and competitive positioning on sustainability pose significant strategic and financial risks to their business. Until now, these ubiquitous carbon and sustainability risks have been ignored. Firms have finally woken up to the risks and intend to invest in carbon management software to mitigate the problem.
“We interviewed a focus group of 16 sustainability executives at firms with annual revenues of $2 billion to understand their key challenges in measuring and managing carbon and sustainability data. 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. “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. This is bad for the brand, bad for financial management and bad for strategic positioning.”
The in-depth interviews with individuals leading climate change and environmental programmes at global corporations found that carbon management processes are still immature.
Microsoft Excel is the leading carbon management tool. Even among the sustainability leaders interviewed by Verdantix, 75% use estimated energy data from utility bills to calculate their emissions and 63% capture that data in Excel. Just under a third use software, but this is often just a glorified database.
Infrequent data collection blocks reduction potential. Fifty per cent of the firms in the study only collect their energy and carbon data annually – or not at all. The infrequency of data collection makes it impossible to manage and reduce emissions at an operational level such as identifying inefficient energy consuming assets.
Carbon management software is viewed as the bronze bullet. Fifty-six per cent of the focus group stated that software is essential to overcome their carbon and energy data challenges. Training employees on carbon management and hiring specialist carbon expertise are also viewed as key to success.
“Managers thrown in at the deep end of carbon management in the last two years now realize that they have serious issues with data collection and accuracy. They plan to invest in software to help solve the problem” said Metcalfe. “But carbon managers risk falling into the trap of buying the wrong software. They told us that they are confused about which vendor to buy from. In fact, more than 50% of the individuals we interviewed had not even heard of 90% of the vendors.”
To help executives charged with implementing an enterprise-wide carbon plan, Verdantix evaluated 22 vendors of carbon management software through live product demonstrations and detailed interviews with product managers. The resulting analysis is based on an assessment using 77 weighted criteria in the form of the proprietary Verdantix Green Quadrant® methodology. This analysis found that:
Six software vendors Lead the market. Enablon, Enviance, ESS, Hara, IHS and ProcessMAP are Leaders in the Verdantix Green Quadrant due to more customer success stories and global implementations, fully featured solutions, best-in-class functionality, greater company resources and deeper energy, environment and carbon domain expertise.
Five vendors Challenge the Leaders. CA, Carbonetworks, Greenstone Carbon Management, SAP and SAS are Challengers in the Green Quadrant assessment because they offer razor-sharp focus on carbon management needs, best-in-class functionality in areas like GHG reduction project management and forecasting tools and convincing carbon management market knowledge.
Three vendors offer Specialist solutions. Specialist providers bring different types of capability to resolve carbon management challenges. The UK’s Camco offers a solution built on a strong energy management heritage, CarbonView has grown from deep supply chain expertise and Germany’s PE International offers a robust, multi-country sustainability reporting platform.
Eight new ventures rate as Entrepreneurs. Carbon Hub, Cintellate, Foresite Systems, Green Oak Solutions, Intelex Technologies, Perillon, Tradeslot and Verteego are characterized by recent entry into the market, basic enterprise carbon management functionality and a handful of early customer wins.
The Verdantix report, “Green Quadrant Carbon Management Software” further explains that execs planning a carbon management software purchase should not leap to the conclusion that they should buy from a vendor in the Leaders quadrant. Emissions intensive firms like oil and gas majors need the support of vendors with global support and robust data management like Enablon and IHS. 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 example, Tesco recently announced it implemented CA’s ecoSoftware. 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.
“This is an immature market, worth between $20 million and $30 million in 2009” said Verdantix Director, David Metcalfe. “But with compliance drivers like the UK’s Carbon Reduction Commitment and the US EPA ruling on mandatory emissions reporting as well as carbon reductions emerging as a competitive issue, we expect the market to exceed $120 million in 2011 and double to at least $250 million in 2012.”
The report, Verdantix Green Quadrant Carbon Management Software is available to Verdantix clients at www.verdantix.com
About Verdantix
Verdantix is an independent analyst firm that helps P&L owners and change leaders with unique commercial analysis of climate change, sustainability and energy issues. For more information please visit www.verdantix.com
Press Contact
Kate de Lima, Media Relations Manager
press(at)verdantix.com
Thursday, 01 October 2009