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”.
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.