Recently, lines between mandatory and voluntary energy and carbon management initiatives have been blurred as businesses in nearly every sector face increased pressure from consumers, customers, investors, and regulators to implement sustainability initiatives. Over the last few months this point was reinforced by several new requirements on businesses to develop and disclose sustainability efforts:
These new requirements provide confirmation that businesses must remain focused on energy, carbon, and environmental performance. External pressures aside, sustainability is proving good for business performance.
A Recent MIT Sloan Management Review (Sustainability and Competitive Advantage) survey of executives demonstrated that companies have identified multiple tangible and intangible benefits from sustainability initiatives. These benefits frequently include enhanced profits from improved brand and customer loyalty, reduced costs tied to better energy management and increased operational efficiencies, and strengthened employee recruitment and retention.
Aberdeen Group, in their recent research (Sustainable Production: Good for the Plant, Good for the Planet), determined that 85% of surveyed companies responded to the current economic downturn by either sustaining or increasing investments in their sustainability programs. Significant reductions or improvements across energy efficiency, waste reduction, environmental impact, and reuse and recycling amounted to enhanced financial performance directly attributable to sustainability program investments. Common amongst Best-in-Class manufacturers was a corporate-wide energy and emissions data program.
Pace Globals’s integrated energy and carbon data management solution, ECM HubSM, provides businesses with a foundation for their sustainability programs. These tools centralize enterprise energy, carbon, and sustainability data in a web-enabled environment that provides management with line of sight to key performance indicators at enterprise, business unit, facility, and unit-level resolution – and at a price point 50% to 70% below the cost of internally developed efforts. For more information, please contact us or click here to learn more.
The days of simple corporate roll-ups of greenhouse gas (GHG) emissions are fading into the past. Historically, a company could be viewed as proactive by tracking and disclosing aggregate, enterprise-wide GHG emissions. Today, competitive advantages are going to those organizations that can provide transparent carbon accounting details at product, activity and process levels.
Wal-Mart made headlines in 2009 by requiring 100,000 vendors to disclose energy, carbon, and sustainability metrics for products sold by the global retailer. However, this concept of pushing a company’s climate and sustainability initiatives onto its upstream supply chain extends far beyond Wal-Mart. Businesses are now beginning to view carbon as a proxy for efficiency and have integrated carbon management strategies into their supply chains.
New standards have emerged to help businesses understand the environmental impact of their supply chains. Initiatives from the Carbon Disclosure Project (CDP) and the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) are currently in pilot phases with over 100 participating companies representing more the 20 industry sectors.
Participants in these programs are asking for details that cannot be addressed using a corporate summary of energy usage:
- Allocations of GHG emissions by customer according to the goods or services sold
- Efforts to verify GHG inventory records and reduce uncertainty
- Forecasts of how GHG emissions will change over the next 5 years
- Future plans to improve capabilities for allocating emissions based on specific products and services
- Measures to reduce GHG emissions in the lifecycle of products
- Climate change related business strategies to take actions on risks and opportunities; including emissions reduction targets, public policy engagement, and external communications.
- Strategies for engaging suppliers on their GHG emissions
It’s clear that this issue has tremendous momentum when a Google search for “green supply chain” yields over 15 million results. A February 2010 Fast Company Magazine article effectively articulated the completive side of this issue – “When every package is awash in claims of using less plastic and water, a standardized measure would separate sustainability lightweights from products that truly deserve their green halo”.
Today Pace Global announced its integrated data management system, ECM Hub, which brings the worlds of energy and carbon management together like never before. The ECM Hub (short for Energy and Carbon Management Hub) combines Pace Global's proven web-based systems, Energy Zone® and ecolink®, into one seamless solution. The powerful combination of these two landmark systems means that users can efficiently manage energy and sustainability data across their enterprise.
The ECM Hub is a SaaS solution (software combined with unparalleled service) to manage costs, mitigate risk, and make informed decisions. Uncertainty in the energy markets is the only constant and the ECM Hub provides a central knowledge platform for managing this complexity. With the ECM Hub, corporate managers spend less time collecting and trying to organize information; instead freeing them to spend time developing strategies and engaging initiatives that lower cost and create sustained value.
Whoever said energy and carbon management has to be expensive and time intensive?
The ECM Hub is provided to facilities at a fraction of the cost of competing enterprise software deployments or internal ‘do it yourself' options. With over 9,000 facilities worldwide already gaining a competitive advantage through our platform and a 30-year history as trusted advisors, Pace Global understands the unique challenges faced by corporate managers responsible for energy and environmental management. Pace Global's expertise, combined with our large scale and proven data management processes, enables us to provide an unparalleled value proposition.
Pace announced its successful completion of a rigorous Statement on Auditing Standards No. 70 (SAS 70) Type II audit, demonstrating Pace's commitment to safeguarding client data by meeting the strictest of industry standards. The SAS 70 Type II certification confirms that effective operational controls are in place for its Energy and Carbon management (Pace ECM) services that are provided to its client portfolio, which includes leaders in the industrial, commercial, and utility sectors.
As energy markets become more volatile and uncertain and carbon reporting mandates are established by the EPA, SEC, and key customers, the management of energy and carbon data is fast becoming a critical requirement for many businesses - a requirement that companies are unprepared to meet with existing systems and resources. For most companies, spreadsheets have provided a low-cost stop gap for the past decade, however, it is clear that the quality standards and sheer volume of data are too great for any company to reasonably manage without proven processes and web accessible management systems that provide transparency to high quality information.
In today's economy, companies are looking to leverage the most cost effective solutions, which have them looking more toward outsourced solutions that can better leverage business scale to maximize value and minimize cost. As such, more and more customers require assurance that a service provider's processes and activities are documented, tested, and will stand up to the rigors of internal or external audit procedures. Service providers that do not have a SAS 70 Type II Audit in accordance with the American Institute of Certified Public Accountants' (AICPA) guidelines will not meet the necessary quality standards required to support such critical reporting requirements in the future. Additionally, the comprehensive Type II audit report can assist its clients in complying with Sarbanes-Oxley requirements
The scope of Pace's SAS-70 audit incorporates controls from every aspect of Pace's operational process. These areas include: Organization and Administration, Human Resources Security, Physical Access, Environment Security, Backup and Recovery, Computer Operations, Logical Access, Infrastructure Change Management, Media and Document Destruction, Disaster Recovery Preparedness, Customer Support, Invoice and Data Management, Commodity Services Management and Account Reconciliation.
Developments in energy and carbon strategies introduce complexities that require data and processes to be highly credible, rigorous and dependable. SAS 70 Type II certification is an important way of validating that Pace ECM services are made of the right stuff that the market requires going forward.
Read full report.
Now that the EPA has finalized the first-ever mandatory greenhouse gas (GHG) reporting rules (see Pace's Summary of the EPA Rule) within the U.S., it is clear that organizations must re-think their carbon accounting programs by looking to the future today. The complex GHG data and calculation requirements established by this GHG reporting regulation commence in January 2010 and current approaches implemented by most organizations are out of alignment with this rule. Here, I discuss two specific reasons to modify your current GHG accounting and energy management practices.
- Spreadsheet-based reporting will no longer be adequate: Many organizations currently track carbon and sustainability data within Excel-based spreadsheets managed by internal resources. EPA will not accept these files for annual GHG inventory reports. Rather, reporters will need to transmit GHG inventory reports, supporting data, and unit and facility information electronically via an XML format. Alternatively, reporters can manually enter completed inventory records into the EPA system, but this approach will result in duplicative efforts and is prone to error. Pace's ecolink® solution (click here: ecolink), provides the data management, GHG emission calculation, and electronic submittal capabilities organizations require to comply with the EPA GHG reporting rule.
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EPA builds an exit ramp: Facilities that reduce GHG emission through operational or energy efficiency improvements or organizational changes can avoid future reporting obligations. If a facility can prove it has reduced emissions below the 25,000 metric tonne threshold for five consecutive years or below 15,000 tonnes for three years, the owner/operator can apply to remove that facility from the program. Successful organizations will have the ability to identify, implement, and track efficiency opportunities at the rapid pace dictated by modern business conditions. Pace's ecolink® solution puts these capabilities at your fingertips in a web-enabled environment, that allows for sharing of best practices across all your facilities.
The age of regulated greenhouse gas emissions and scrutinized environmental performance is here, creating a wide range of challenges for businesses today. As organizations begin to prepare for compliance, top decision makers will quickly need to decide how best to manage these direct compliance risks along with much broader business requirements. While compliance regulation may get management's immediate attention with the advent of the EPA rule, there are strong business requirements at play from customers, investors and supply chain partners that impact every aspect of business operations. The answer: Be proactive and get a handle on your GHG emissions performance by developing an integrated carbon and energy management program that allows your organization to tie energy and carbon liabilities and opportunities to strategic business initiatives - the evolving market dynamics will demand it.
There has never been a more critical time for businesses to focus on carbon and environmental sustainability issues. Even now, in a time marked by a global economic downturn, accounting for greenhouse gas (GHG) risk is an increasingly relevant cost of doing business. It is the expectation put on businesses by customers, shareholders, and regulators.
Historically, prior to 2009, the U.S. GHG regulatory environment had been defined by fragmented state and regional initiatives. Federal carbon regulations are now on the horizon with US Environmental Protection Agency GHG reporting mandates set to commence in January 2010 and a clear directive by President Obama to the US Congress to pass cap and trade legislation. In 2009 to date, environmental policies impacting the energy sector have been progressed with unprecedented speed and urgency.
March 2009 saw the release of the U.S. EPA's draft mandatory GHG reporting rule which is arguably the most stringent GHG protocols drafted to date. These GHG reporting regulations will cover 85 - 90% of the nation's GHG emissions and will require reporting from approximately 13,000 facilities. Pace anticipates that this proposed rule will be finalized this fall and compliance obligations for U.S. businesses will commence in January 2010. As organizations were beginning to come to terms with the complexity of the EPA GHG reporting requirements, the U.S. House of Representatives passed a landmark bill that has the potential to define carbon and energy regulations for decades to come. "The American Clean Energy and Security Act of 2009" (a.k.a. The Waxman/Markey Bill) seeks, amongst other provisions, to establish a Federal cap-and-trade on Greenhouse Gas (GHG) emissions.
These are clear signals that the timeframe wherein companies can maintain an unmanaged carbon position is fast closing and the need to begin incorporating carbon into corporate strategy and energy planning is now. Whether your organization is directly impacted by these regulations or not, carbon compliance costs passed through by power generators and distillate fuel suppliers are a guarantee and will represent a significant variable expense. Without a clear project and energy management strategy, this risk is unmitigated. Businesses that proactively manage their carbon risks before they occur will establish a competitive advantage.
About Pace - Pace is a full-service, energy and carbon management firm with over 30 years of experience. Pace provides full-scale GHG inventory services to a variety of energy consumers, from commercial to heavy industrial companies as well as utilities.
About the Author - Sean Metivier has over 8 years of combined experience related to project management and product management within the environmental consulting and retail energy industries. At Pace he provides consulting and project management support for a variety of Carbon-related engagements. Sean is also the product manager of Pace's robust web-based, enterprise carbon accounting and project tracking service (ecolinkTM) designed to support corporate-wide sustainability, GHG emission management and energy management programs. Sean holds an M.S. in climate change science and a B.S. in environmental biology from Syracuse University.
Pace has learned through multiple channels that the long-awaited final EPA mandatory greenhouse gas (GHG) reporting rule is expected to be released this week. This GHG reporting regulation will cover 85 - 90% of the nation's GHG emissions. Facility-level reporting requirements will be triggered by specific industrial processes and/or stationary combustion emissions in excess of 25,000 metric tons of CO
2e. When the proposed GHG reporting rule was published in March 2009, U.S. businesses from a wide range of industry sectors were caught off guard by the complexity of data management, calculation, and record retention requirements
The proposed methodologies for calculating GHG emissions go well beyond the requirements of the leading voluntary reporting programs like The Climate Registry. Impacted facilities will be expected to collect, manage, and report facility-level and unit-level details such as fuel carbon and high heat value results, monitoring and QA/QC records, and data collection and emission calculation methodologies. Complicating the matter further, EPA established unique reporting methodologies for several industrial process emission sources (e.g. cement production, electric generation, petroleum refineries, food processing, electronics manufacturing, metals production, pulp and paper manufacturing, and others).
Now, with just over three months remaining in the year, it is apparent that affected U.S. companies will be challenged to prepare for this groundbreaking and complex regulatory requirement. While Pace does not anticipate wholesale changes between the draft and final versions of the rule, EPA clearly solicited comments associated with several aspects of the rule. These areas included, but were not limited to the following:
Even subtle changes in the rule could have significant implications to affected businesses. Download a summary of the EPA rule and learn how Pace can help you address these complex challenges.
Enterprise carbon accounting (ECA) software solutions have received a significant amount of media attention during the first half of 2009. The confluence of emerging Federal, GHG regulations with announcements of new market entrants, has spurred this heightened attention.
Much of the recent media attention has focused on software vendors that are new to this space and offer pure turnkey software solutions. Carbon management is primarily an energy data issue and it occurs to me that ECA software solutions integrated with established energy consulting services are not receiving appropriate attention. Integrated carbon and energy solutions of this nature tend to be better equipped to solve complex data management issues and at a price that is more economical than traditional enterprise-scale software solutions. Vendors with extensive experience providing energy and carbon data management and advisory services to proactive businesses fully appreciate the fact that carbon and energy are inextricably linked. Further, the most complex and labor intensive aspect of developing a carbon footprint is the establishment of data collection processes. Vendors with comprehensive data management solutions are better prepared to address these market challenges.
I also observed that much of this media attention around ECA solutions, and many of the vendors themselves, tend to focus exclusively on voluntary, sustainability drivers for implementing enterprise carbon accounting initiatives. These initiatives are both commendable and decidedly more vital as energy costs rise under a carbon constrained economy and stakeholders increasingly expect clear carbon risk disclosure from businesses. However, the first half of 2009 was also marked by unprecedented speed and urgency around newly proposed, Federal GHG regulations. Specifically, the U.S. EPA's Proposed Mandatory Greenhouse Gas Reporting Rule is arguably the most rigorous GHG inventory protocols designed to date. Those organizations with compliance obligations will benefit from compelling ECA software solutions that integrate regulatory carbon reporting requirements with energy data management and carbon advisory services.
While the calculation and data quality requirements of the EPA rule exceed those of voluntary reporting protocols, organizations without compliance obligations also benefit from partnering with a firm that has the ability to provide compliance solutions. It is conceivable that, as the EPA reporting requirements are established as the industry best practices for carbon accounting, other stakeholders will adopt aspects of the Federal GHG reporting rule. The U.S. Securities and Exchange Commission (SEC), for example, is under significant pressure from investors to require corporations to disclose climate risks with financial reporting. Will the SEC look to the EPA guidance related to carbon accounting standards?
Whether your organization's drivers for establishing carbon management practices are tied to voluntary or regulatory needs, it is important to partner with a service provider that competently addresses the data management challenges and is capable of delivering a true, regulatory-quality solution.
Welcome to the new ‘Energy and Carbon Management Blog' from Pace. We hope this blog will provide an informative and interactive forum for Pace's clients and the greater market. Going forward, we will provide periodic posts on a wide range of issues related to enterprise carbon, energy, and sustainability challenges that are rapidly evolving and management practices that meet these challenges head-on and provide competitive advantage. Our unique perspective will leverage Pace's insight achieved through over 30 years of providing clients with energy and carbon management and advisory services.
Energy markets continue to evolve rapidly, placing even greater challenges upon our clients at a time when businesses are reducing resources. Doing more with less requires greater leveraging of technology. Effective energy management must be informed by organized and readily accessible data. Energy Managers should spend their time using this data to drive actions and decisions, not compiling it. Pace continues to invest in and develop state-of-the-art energy and carbon management systems, such as EnergyZone® and ecolinkSM for the sole purpose of providing the most comprehensive and value-added energy services available. This enables us to focus our expertise, as well, on strategic matters and program execution to assist our clients in tackling growing energy challenges.
We look forward to sharing our insights and creating an effective, open channel for constructive dialog.
Sincerely,
Fred James
EVP, Industrial Markets