Enterprise Carbon Accounting Solutions - What to Look for
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.