Of course going green is the right thing to do for our environment and our economy. I got the idea for my own company while studying environmental management in my undergraduate program in the mid-1990s. I firmly believe we must be responsible stewards of the earth and providing business with the proper incentives is the best path to environmental stewardship. But we also must realize that progress on emissions and energy reductions from a policy perspective represents a potential boon for U.S. innovation and business.

This week’s UN Climate Change Conference in Copenhagen has seen its fair share of press, but what is most compelling about this event is what’s happening on the ground.  In my fourteen years working on Carbonetworks, I have never seen this level of activity in climate change and business – both positive and negative. But it’s the perspective that counts and reveals what is really going on with the business of climate change.

It first hits you at the airport, just steps from your plane. All manner of advertising assails you from every angle, from billboards to announcements to people stopping you in your path to give you their pitch. There was even a guy in green chicken suit. Some of it is great, from respected organizations doing their best to combat climate change. Some of it is awful, with blatant greenwashing from companies that have little, if anything, to do with climate change or its solutions. It was enough to make me a bit angry that this level of greenwashing, and I wasn’t the only one.

A tangible shift has occurred around the public’s approach to climate change and it’s business and politics here at COP15. Tens of thousands of protesters have descended on Copenhagen – some peaceful, some certainly not. But the one thing that binds them with many of the businesspeople and policymakers here is that they are angry. This anger is often focused at business because it is the most visible and accessible component of the climate change talks. At times I almost felt betrayed by many of the activists’ denouncement of business, as I consider myself to have a long-standing and successful commitment to climate change, helping hundreds of businesses around the world do so as well. But people definitely do not feel that enough is being done to help save the environment, and the copious and sometimes offensive green marketing throughout the city has only exacerbated the issue.

But we get to see a lot that most people don’t see. I consider myself very lucky to be involved in COP15 not only because it’s an historic event, but also because my company has been fortunate enough to be included at the center of the process. This gives us a view that most people don’t have the chance to see, and it is this view that I believe shows the true nature of climate change in business behind the marketing, protests, and politics. This week we have spent time with a number of leaders from US and Danish Governments and CEOs of some of the world’s largest companies. In our sessions one thing became very clear: the US government is committed to climate change, and big business is already doing an incredible amount of work in this area and generating tangible results for their business.

The first thing you notice is how well-versed leaders in the Obama administration are about climate change and its financial impacts on the US.  Secretary of Commerce Gary Locke demonstrated an incredible depth of knowledge on the subject in our roundtable sessions and focused on how business can help. I’ve found the same depth of knowledge and commitment to climate change issues in similar sessions with other US leaders such as US Interior Secretary Salazar, White House CTO Aneesh Chopra and others. Secretary Steven Chu put it best at the closing of the Bright Green event when he said “the days of America dragging its heels on climate change is over”. If solving complex issues like climate change is about getting the smartest, most committed people in the room, the Obama Administration is certainly making headway.

Even the US Ambassador to Denmark was onboard. After only a short time on the job, she held a reception at her house with some of the top US companies involved in the Copenhagen event. I learned from these business leaders what their companies have done in carbon reductions, energy savings, and other environmental initiatives and the results may surprise you. I spoke with one large multinational whose carbon and energy efficiency programs have saved the company 20% of their annual operating expense for their shipping business, and expect even more next year. They don’t advertise it; to them it’s just smart business. A Big 4 software firm outlined their plans for a global carbon reporting initiative that will help thousands of companies.  Again, they don’t market it, it’s a way to help these companies and grow their business. A cement giant at the event also walked through how energy and carbon reductions have been part of their business for decades. And without an ounce of marketing.

What’s important here is that perception is driving a lot of the debate around the business of climate change because we make judgments on what we can see and touch. Unfortunately to date, much of this has only been through marketing, media, and sound bites. But when you peel back the onion to see what is really going on, you learn that there is a vibrant and critical movement in the business of climate change whose momentum cannot be stopped – the only question is who will harness it.

This is why COP15 is so important, as it will take these leaders to figure out who will benefit from the biggest revolution to hit business in decades, and which economies will make it happen. We want the smartest guys in the room, and we want them committed. After a week in Copenhagen I can say that this is exactly what the US is doing.

So peel back the onion on the business of climate change and ignore the hype. Look at the companies you buy from, the ones you work for, or the ones that work for you, and see what they are doing to reduce their impact. You’ll likely find that they are doing more than you know. Look at your government leaders and gauge their commitment on climate change, and their approach to growing your business. This can only help our economies on a state, local, and federal level. Global policy and regulations take time, and what’s important is that we stay focused, committed, and engaged in the business of climate change to prosper.

Original article

Positioned as a cross between a mini World Economic Forum and TED talks show, Climate Spark offers a unique place and platform for UN delegates and business people to meet and network each evening during COP15. Exclusive after parties are planned each night, with celebrities and dignitaries. This exclusive business forum is sponsored by Clean World Capital, a clean energy and technology merchant bank specialised in financing cleantech and renewable energy projects. Climate Spark is supported by Climate Consortium, Climate Exchange, World Climate Solutions, British Chamber of Commerce, Danish Industry, Reuters, Cleantech Magazine, and Bright Green.

While governments argue over emissions cuts, many firms have already started cleaning up their act, or at least preparing to do so—prompting more and more software firms to offer tools to help. If optimists are right, the market for “carbon-management software” could one day become at least as big as those for other important business applications such as customer-relationship-management (CRM) programs, which brought in revenues of more than $9 billion last year.

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The legislation currently under consideration by Congress is critical, and includes provisions to reduce carbon emissions by 2050, a carbon cap and trade provision, increased investment in alternative energies, such as wind and solar, and increased investment in retrofits. Together with companies like Dow Chemical, Nike, Timberland and Starbucks, we made a powerful demonstration to the Obama administration and to Congress that sustainability and smart use of energy are not only good for the planet, but also good for business. We built Carbonetworks around this idea, and we hope that we embody the opportunity that energy technology offers to drive the American economy in the years ahead.

More information on the effort can be found at www.wecanlead.org.  To view Carbonetworks CEO Michael Meehan discussing the issues of climate change legislation on ABC News’ “Ahead of the Curve”, play the video below.

]]> http://blog.enxsuite.com/2009/10/message-to-business-we-can-lead/feed/ 1 http://blog.enxsuite.com/2009/09/introducing-carbonetworks-ghg-jumpstart/ http://blog.enxsuite.com/2009/09/introducing-carbonetworks-ghg-jumpstart/#comments Sat, 26 Sep 2009 00:25:49 +0000 Michael Meehan - President & CEO http://blog.carbonetworks.com/?p=90 This week has witnessed a sea change in our field. On Tuesday, September 22, the EPA issued a mandate for greenhouse gas (GHG) reporting. For the first time, large emitters of heat-trapping emissions must collect GHG data under a new reporting system.

The EPA Rule affects suppliers of fossil fuels or industrial greenhouse gases; manufacturers of vehicles and engines; and facilities that emit 25,000 metric tons or more per year of GHG emissions. For comparison, this threshold is equivalent to the amount of GHG emissions from the annual energy use of 2,200 homes or 4,600 passenger vehicles. Enterprises and facilities in the affected categories will be required to submit annual reports to EPA. The gases covered by the rule include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases, including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

Participating enterprises and facilities must collect data beginning January 1, 2010 — that’s less than 100 days from now. The first annual report must be submitted to the EPA by March 31, 2011. This mandate affects nearly 10,000 facilities in the United States, representing approximately 85% of U.S. GHG emissions.

The EPA reporting mandate brings significant challenges: How to implement a systematic process that produces consistent, auditable, and accurate GHG information? How to effectively collect data from disparate systems in geographically dispersed facilities? How to assure your senior management that you meet EPA requirements with marginal risk and cost? The short timeline makes these challenges that much more difficult.

To help you address these challenges, we’ve created Carbonetworks™ GHG Jumpstart: software and services to consolidate and report GHG emissions data quickly, effectively, and economically. Our Carbonetworks™ Information Manager (CIM) product consolidates your GHG data for EPA reporting, and provides a scorecard for measuring EPA GHG compliance at the corporate, business unit, and facility levels. Our integration module, Carbonetworks Extensions, facilities interoperability with a variety of other systems, from spreadsheets to legacy EMIS/EHS, ERP and in-house software, ensuring that you can continue to leverage existing systems. CIM is a fully managed SaaS web application that requires no on-premise software, can be accessed via any modern web browser, and offers robust yet easy to use functionality. (Of course, we do much more than EPA compliance; click here to learn more about the Carbonetworks Performance Management Platform.)

So, what should you do to get started? Here’s a checklist:

1. Familiarize yourself with the materials that the EPA has provided on the mandate, in particular their FAQ, fact sheet, and overview presentation.
2. Review the EPA’s screening tool to better understand how your facilities are likely to be affected.
3. If you think you’ll need to report emissions data to the EPA, register for a free 30 day trial of GHG JumpStart. To learn more, email epa.solutions@carbonetworks.com or call toll free (800) 571-0694.

With over a decade of experience and 6,000 sites implemented to date, Carbonetworks has helped hundreds of customers to manage their GHG data. Our global customers include some of the leading firms in oil & gas, utilities, manufacturing, retail, telecommunications, technology, financial services, and consumer products. We look forward to helping you meet the challenges posed by the new EPA GHG emissions reporting mandate.

Wholesale protectionism in free markets rarely works. During the Great Depression this was a favored strategy however today most economists agree that it was an ineffective – and damaging – position.  However now that we are descending into a deep economic hole the U.S. is again flirting with protectionism. The “Buy American” clause in the recent U.S. stimulus bill has generated much debate, and we may very well see similar restrictions on the burgeoning U.S. carbon market.

We are sitting at a time in history where the confluence of market developments may force the hand of the US into such policies. With its economic system in ruin and an unemployment rate approaching 8%, it’s fair to say times are desperate in the US. At the same time we are facing what I would call the most serious environmental challenge in human history. Unfortunately, we need to find a way in which all challenges can be met.

At the center of this issue is the allocations and projects that make up most functional markets.  Depending on the regulatory framework carbon reduction projects can make up 5-25% of some markets. But with internal pressures facing the new US administration we may see a drastic increase in this percentage in an effort to create jobs and stimulate the economy. Other markets restrict the percentage of foreign investment via CDM but the US may further increase restrictions on such investments and provide incentives to build reduction projects in America. This will surely upset China and India (who have the lion’s share of current global CDM projects) as much of the world’s CDM developers are waiting for (and banking on) the immense demand to be generated from U.S. cap and trade.

Of course this all remains to be seen, nobody has a carbon crystal ball.  But when it comes to carbon markets it’s difficult to see how the U.S. will be able to make good on its assurances to the global community that international trade will flow freely. When it comes to carbon markets, I certainly hope it does.

A Unique Opportunity for Innovative Software Technologies

Technological advances in software and infrastructure can be extremely rapid, especially when compared to other, more capital-intensive sectors. This presents a large opportunity for software companies, especially startups.  Restricted budgets will narrow the niche for carbon management solutions, but will create a more competitive environment for successful companies.

The environmental software business has been around for some time and there is a lot of market focus on this area, so it is important to investigate what makes a company successful – or unsuccessful – in this market. Companies in the environmental software space have been around for decades, tracking everything from water pollutants to air contaminants and particulates. It has been an unglamorous market that has rarely seen the spotlight of other technologies such as online search, SaaS, or other innovations. Until recently, recognized IT analysts barely tracked the sector, and have at times described the sector as a “technology laggard” – and vendors have responded with relatively little innovation. Much like markets that have come before it, the highly competitive environmental software market is bottom-heavy with a focus on data acquisition and management. Translating this data to make sense to a CFO or CEO is no small task, and with flat-lining or shrinking revenues it is very difficult for the market incumbents to react to a rapidly changing market.

This market situation is hardly surprising as it has happened before. The problem exists when there are many vendors in a market providing specialized information that simply isn’t of strategic value to a client’s executive. Then something happens in the market to cast the CxO’s eye on that information in response to some outside stimulus. The most obvious analogy here is Sarbanes-Oxley, where companies of all sizes required executive visibility of even the most detailed data, from financial data to system performance and delivery metrics. What’s more, this shift in focus happened almost overnight. Companies in many areas of software, including financial software and systems management, rushed to fill the gap by building and acquiring solutions that could translate their vast amounts of data into a format for use in the boardroom. Entire software markets sprang up in direct response, such as business service management and  financial compliance vendors.

The similarities between today’s carbon software market and these earlier markets are evident, however the overall market conditions have changed. This can help us identify unsuccessful and potentially successful companies. One way market conditions have changed is the position of the incumbents themselves. In the dot-com area, the existing software vendors had significant access to capital, supported by incredibly high stock valuations and healthy balance sheets. The overall economy was growing at a rapid pace with no signs of slowing down. Once the shift in the market and the path to the new customer (i.e., the executive) was identified, incumbent software vendors could build or buy their way across the gap.

Today it’s not so simple, with an slowing global economy, increasingly noisy market, shifting pending regulations, understandably confused consumers, and vague demands from the market to make sense of it all, today’s incumbent environmental software vendors are not in an enviable position. Many of them are generalists and cannot react to quickly changing market development and regulations. Their lack of capital (and financial backing) prohibits them from bridging the gap via the familiar build-or-buy scenario. Many established vendors in this market are left to retool their marketing message or provide add relatively small feature enhancements to attempt to address their changing market. However in many cases this is insufficient to bridge the gap to their new customer, the executive.

This problem is not isolated to established vendors; startups are also feeling the squeeze of tightening global markets brought on by the global economic crisis. Some analysts estimate that 80% of all startups will fail in todays’ economic climate (before you investors rush to the exits, consider that similar success metrics existed prior to the current economic crisis). Like established vendors, financial health will be a significant determinant in the success of startups at this juncture. Companies with healthy revenues or solid financial backing are well positioned to take advantage of the current economic situation, and capitalize competitors’ difficulties. As in all market downturns, those with healthy balance sheets will find significant opportunity in the misfortune of others. Startups with a strong financial position should take the lead from Warren Buffet: opportunities abound in in tough financial times as cash-strapped competitors more towards the auction block. The key is being prepared and recognizing these opportunities before the bigger fish do. The successful startup will be aggressive, positioning itself to take advantage of key acquisitions and investment rather than weathering the storm.

Successful software companies must be able to change their products and services to more clearly articulate the relationships between carbon, finance, and opex. In this time of uncertain regulatory timelines, solutions need to show the value of both short- and long-term reduction projects, providing a wide range of scenario planning and forecasting tools to help with critical business decisions. Moreover, solutions must address all levels of investment risk within client organizations, providing tools for both risk-averse/low-yield and high risk carbon investment scenarios. Lastly, these solutions must be flexible enough to include both internal and external financial vehicles, such as CDM, JI, and bilateral projects. In this time of corporate accountability and disclosure, successful solutions will show the value of corporate carbon management and reductions to stakeholders, including shareholders and the public.

Implications for the Carbon Market

The carbon market has emerged as a critical component of the new global economy. The significant drivers will be regulation and technological innovation, however current economic conditions are already affecting the carbon market. We will see new opportunities and risks in light of the new economic situation but technologies that are better able to adapt and innovate will have a better chance of success. When you consider the additional criteria of strong financial backing, a healthy balance sheet, and an innovative product pipeline, the list of companies well positioned in the carbon market becomes very small. Regardless of the depth and scope of the current economic crisis it will be a very interesting time in the carbon market for the foreseeable future.