Imagine walking in to your local retail store in search of a new screwdriver. You narrow your choice down to two virtually identical models, both priced at $1.39. One, however, has a label proclaiming the tool's carbon footprint is 50 pounds. The other has a sticker declaring a carbon footprint of 25 pounds. If you're the owner of that retail store, which tool do you think your customers are most likely to buy? Or peering a bit further down the supply chain, if you're the maker of screwdrivers, whose tool do you think retailers are more likely to buy: yours or the eco-friendlier option from your competitor?
We already know that organizations worldwide have started measuring their carbon footprint -- more specifically, their CO2-e (carbon dioxide equivalent). Further, they've started assessing and reporting their eco-oriented CSR (corporate social responsibility) efforts, both to comply with regulations and to satisfy the demands of business partners or customers -- such as IT companies, including HP, IBM, Dell, and Xerox; retailers such as Wal-Mart; government bodies; hospitals; and so on.
Now some organizations are taking it a step further, going so far as to measure the carbon footprint -- the amount of carbon dioxide that goes into manufacturing a good -- of individual products. PepsiCo, for example, calculated and published the carbon footprint of a half gallon of Tropicana orange juice earlier this year. The trend is indicative of a move toward a "carbon-constrained economy," says Larry Goldenhersh, CEO of Enviance, a provider of SaaS solutions for managing environmental and CSR data and requirements.
Through "global supply chain environmentalism," companies are essentially reducing the associated carbon footprint -- and, thus, the detrimental environmental impact -- of their products. The company that manages to deliver the product with the smallest carbon footprint will have a huge advantage over its competitors, Goldenhersh says. An otherwise identical $1.39 screwdriver suddenly has more value to increasingly eco-conscious customers if its manufacture results in 20 fewer pounds of carbon. Goldenhersh calls this "decommoditizing the commoditized market."
Environmental snapshots, in real time
Accurately measuring an individual organization's carbon footprint is challenging enough. How do you go about assessing how many pounds of CO2 effectively went into generating a screwdriver, a lightbulb, or a shirt? That necessitates scrutinizing activities and gathering data all the way along the supply chain. And lo, we're seeing IT companies honing their offerings for superior gathering of environmental information both through organizations and supply chains.
No surprise, Enviance is among them. Enviance System is designed to help organizations manage carbon and other regulatory risks. Drawing on the flexibility of Web services, sensors, APIs, and, as needed, manual input, Enviance System is capable of gathering environmental data in real time from a wide array of sources, such as industrial equipment, hardware, ERP systems, databases, electricity meters, water pumps, fuel racks, and so on.
That data can be used in countless ways. For example, the system can take all the measurements of your company's various greenhouse gas emissions and standardize them as a CO2-e measurement. You could also track water or energy consumption or waste.
Moreover, companies can use the system to ensure compliance with permits and regulations. You can store permit requirements in the system and associate them with specific business processes and equipment. Then, for example, when a piece of equipment or a facility deviates from regulatory or internal limits, the system could automatically initiate an event log with e-mail notifications to the appropriate groups or individuals to ensure that the problem is addressed promptly.
Data also can be used to generate sustainability and CSR reports of all kinds. An organization can develop ad hoc reports for one facility or roll up the information for your entire organization using the numerous report formats. You can generate local Title V compliance and deviation reports, discharge monitoring reports, and others.
Notably, Enviance isn't the only player with a SaaS solution for managing environmental data. Carbonetworks offers a platform designed to help companies track their various energy, environmental, and sustainability initiatives like a business. The system, which takes a more business-oriented approach, also integrates with an array of systems, from Excel-based solutions to legacy, ERP, and in-house software. It helps organizations evaluate their inventories, plan for reductions, generate reports based on a variety of templates, and more.
Measuring up, measuring down
What Enviance's and Carbonetworks' solutions have in common is that they're both Internet-based. As such, a manufacturer or retailer using one of the solutions could have their suppliers relatively easily feed environmental data about their wares into the system via an Internet portal. Granular, supplier-provided information about how parts or materials are mined, manufactured, transported, and the like can all be used to determine the final product's overall carbon footprint.
Notably, calculating a product's overall carbon footprint is not yet an exact science, Goldenhersh notes. For example, in calculating the carbon footprint of say, a toaster, do you, in fact, consider how various metals it contains were mined, how each wire was manufactured, packaged, and shipped, or how much energy was necessary to create the plastic button you depress to make toast? Do you calculate it starting from when all those materials arrive at the toaster-assembly line? Do you factor in how the toaster was packaged and shipped to reach the store?
According to Goldenhersh, various international standards exist, so for now, it's important only that a company choose one that's defensible. But a day will likely come, perhaps soon, when there will be a clear standard for assessing the environmental footprint of a screwdriver, a computer, or any other product -- and that standard, like many other standards and protocols, will be defined by those who jump into the race early and pull ahead. Those companies will have the competitive edge. "The winner in supply chain environmentalism will define the boundary of what constitutes a screwdriver's creation," Goldenhersh says.
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