Despite the gridlock in Washington over climate change
legislation, and one of the worst economic downturns in the last
century, 2009 was a year of growth for the emerging Enterprise Carbon
Accounting (ECA) software market. According to a research study recently
released by Groom Energy Solutions, EnerNOC , IHS and SAP made
acquisitions in the sector, software giants Computer Associates and
Microsoft entered the market, and more than $46 million in venture
capital was invested in ECA startup companies. Meanwhile, the number
of corporations now disclosing greenhouse gas emissions (GHG) increased
significantly in 2009 and Groom Energy predicts that ECA software
purchases will increase 600 percent by 2011.
The research report, “2010 Enterprise Carbon Accounting: An Analysis
of Corporate-Level Greenhouse Gas (GHG) Emission Reporting and a Review
of GHG Software Products,” presents three principal factors that are
behind the momentum of the ECA market.
1. Increased pressure from customers and investors for companies to
create a ‘greener’ public image
2. Cost and energy savings from sustainability investments
3. Mandates from buyers, like the Walmart Supplier Sustainability
Assessment Program that was implemented to measure the environmental
impact of supplier operations.
“In light of the economic climate, sales growth for ECA software
shows the importance of this emerging category,” said Paul Baier, report
author and vice president of consulting services for Groom Energy.
“From politicians like Al Gore and Condoleezza Rice getting involved
with startups, to Microsoft, CA, and SAP, entering the market, our
prediction that 2009 would be the year of enterprise carbon accounting
came to fruition. Our on-going customer and vendor research reinforces
our belief that the ECA market will see explosive growth in size and
global importance in 2010 and 2011.”
The first version of the report was released in Jan. 2008 with an
addendum in May of 2008, to provide a guide for organizations beginning
to track and report their GHG emissions. At the time 40 vendors were
already present in the market and it appeared that that many companies
had grown beyond the use of spreadsheets, which was the traditional tool
used to track GHG emissions. Despite the early stage of the current
ECA market, the 2010 report now identifies a total of 60 vendors and
profiles 20 of them in four category types: environmental health and
safety vendors (EHS), new products from large firms, startup companies,
and energy management firms. Market consolidation is expected to occur
in the next two years.
Eight companies were named 2010 ECA Emerging Leaders in the report.
Ranking was weighted and determined by: number of customer deployments,
technology features, market vision and financial stability.
The current leaders are:
Enablon – Enablon offers management and
performance software solutions for: corporate responsibility and QEHS
management; risk management and internal control; and corporate
governance and legal management. Enablon software solutions are used by
more than 200,000 users in 250 global companies and ten thousands SME’s
around the world. Customers include Airbus, Carrefour, PGE,
Timberland,Tyco, Armstrong, Beiersdorf, Del Monte, L’Oréal, McGraw Hill,
Pinnacle West, Texas Instruments and Woolworths. Enablon is the
world’s largest sustainability software provider,
Enviance – The Enviance Environmental ERP
system is comprised of the three components of sustainability: air,
water and waste. It is a Cloud-based, on-demand platform, that comes
with a Software Developers’ Kit (SDK) so clients can integrate the
Enviance system with other information systems, and has a mobile
platform. There are 12,000 users from 45 countries that use the
Hara – Hara attracted investor attention
recently, securing $20 million in funding from Kleiner Perkins Caufield
& Byers, JAFCO Ventures, and Nth Power. The startup has seen
significant recent customer success, having closed a number of deals in
2009 with industry leaders including Coca-Cola, News Corporation, the
City of Palo Alto and the City of San Jose.
IHS – The 50 year old company provides a full
suite of environmental and chemical management software and service
solutions for EHS and sustainability management. Solutions include:
greenhouse gas management from compliance to emissions trading; material
Safety Data Sheet (MSDS) and chemical lifecycle management; air, water
and waste data management; sustainability tracking, management and
reporting; regulatory compliance management; chemical supply chain
greening; and REACH.
Johnson Controls – The Energy and Emissions
Management System provides global organizations with the capability to
analyze energy trends and calculate greenhouse gas levels. The Web-based
system measures, manages and forecasts activities related to energy
cost, consumption, energy efficiency projects, fleet emissions, and
waste. Johnson Control annually monitors 63 million metric tons of
greenhouse gas emissions for 5,000 buildings in 88 countries. The system
has identified more than 8,000 energy and cost savings solutions for
global organizations such as Pfizer, Dell and Xerox. They currently
manage $1 billion in annual energy spend.
International – SoFi-Software provides data collection supported
by interfacesto ERP systems; carbon footprint measurement in compliance
with requirements of CDP and the ISO 14064 standard; performance
tracking; and the ability to identify cost reduction opportunities. Gabi
Software provides tools and databases for product and process
ProcessMAP – ProcessMAP’s software platform
measures and tracks environmental and carbon footprint as well as,
inform on their performance in the Global Citizenship and Annual
Sustainability Reports.Customers include: Allergan, Cardinal Health, CR
Bard, Ingersoll Rand, ITT, John Deere, Shaw (Berkshire Hathaway), and
Watson Pharmaceuticals. ProcessMAP was also recently recognized as a
leading provider of Carbon Management Software by Verdantix,
business research firm focused on climate change, carbon markets and
SAP- Carbon Impact – Carbon Impact enables
reporting from a single repository to voluntary or mandatory registries,
such as the Carbon Disclosure Project and U.S. EPA Climate Leaders
Program; allow you to conduct abatement analysis by using financial
insight to find the optimal mix of reduction projects and offsets; gain
insight via pre-built dashboards for emissions trending analysis and
visualization to help identify problem areas; you can also consolidate
environmental impact data into a single repository, and organize
emissions data by using flexible hierarchies that represent your
facilities, departments, product lines and other operational entities.
Both Enablon and Hara are newcomers to the list, while the others
were named 2009 ECA Emerging Leaders.
Surprisingly, the top driver among purchasers, is not pending GHG
regulation, but rather protecting and enhancing company image.
Responses among many purchasers indicate that supply chain initiatives
like the Walmart supplier assessment program will motivate purchases.
Accord to the Groom study, the number of organizations using ECA
software is expected to increase five fold by 2011 and much of the
investment will be made by companies that have not traditionally
invested in environmental software. A report a recently released
study from Pike Research backs up these figures. Spending for software
and services in the carbon management market between 2008 and 2009
grew nearly 84% globally, representing a total market of $384 million.
That same report forecasts that in North America alone, the 2008-2017
compound annual growth rate (CAGR) will be more than 44%.
According to Stephen Stokes, an analyst at AMR Research, companies
offering a “one size fits all” package that not only tracks greenhouse
gases but performs sophisticated analysis of things like water
consumption were most likely to succeed. Otherwise, companies that excel
at one niche aspect of emissions management, such as in the
transportation sector, likely will gain an edge.