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WHILE the nation’s businesses dwell in a holding pattern with regards to carbon reporting programs in the wake of the failed emissions trading scheme, the green reporting industry is building strength in its products and getting on with the job.
Companies selling software designed to collect information about a business’s sustainability and energy consumption are finding an increased number of competitors keen to establish a foothold in a potentially lucrative new market.
For the largest Australian business of its kind, Global Carbon Systems, the entry of these new players is not a serious concern.
“While we’ve seen a boom in business interest in sustainability measurement and reporting in the past three years, the number of successful software providers will shrink as the market weighs the best from the rest,” Carbon Systems chief executive David Solsky says.
A report released by Verdantix, an independent analyst firm for sustainable businesses, found Australia had 31 companies working to provide sustainability and carbon accounting in 2005, and now boasts 126 firms in the field.
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“A lot of people moved into the space in 2008 after Al Gore’s movie An Inconvenient Truth, coming from large established software businesses looking to break into the carbon game,” Solsky says.
Carbon Systems services a broad range of Australian businesses keen on tracking data on their carbon footprint, with some of them obliged to report this information to the federal government under the 2007 National Greenhouse and Energy Reporting Act, brought in as a precursor to an ETS.
Under the NGER System only a small percentage of Australian businesses report their energy consumption to the government. These include any business that emits 25,000 tonnes of carbon dioxide equivalent a year or consumes more than 25,000 megawatts of electricity or 2.5 million tonnes of fuel a year.
While many of Solsky’s clients are obliged to report this data to the government, he is also increasingly seeing interest from companies not obliged to do so but keen to learn about cost savings for their business by cutting back energy consumption.
“We have a number of larger companies reporting for corporate social responsibility reasons, such as Domino’s Pizza, Deloitte, Advance Pharmaceuticals and Canon,” he says. “Once a company starts to track its energy usage, it’s only a matter of time before they start to see areas where the business can save money by managing their energy consumption more [efficiently].”
Green reporting software sets up a data capture system that records measurements of energy consumption such as electricity bills and runs benchmark reports to map energy consumption per square metre.
Most of this information, including fuel reports and logs of air travel, is typically decentralised across an organisation and has not traditionally been captured in a single place, says Solsky. The job of the new software is to map where this information lives in an organisation and set up an accounting system to automatically capture the data.
“With this new information you quickly get people asking: ‘Why do these half dozen properties have twice the consumption per square metre than our average?’ and they go in to investigate. That’s when they discover simple things like unnecessary after-hours airconditioning in a property,” he says.
Some companies publish this energy usage and carbon per square metre across their business and then bring in incentives to lower consumption levels, creating an awareness and competition among employees.
“Once they peel away a layer and look at the behaviours and practices of the people in their businesses, those types of savings can make an immediate return to an organisation,” he says.
As Solsky’s business expands, so does his client base, and the company now has 30 staff spread across its three offices in New York, London and Sydney. Working with their British clients can perhaps be seen as a dress rehearsal for the possible future introduction of an ETS in Australia as a larger percentage of British companies are obliged to report under Britain’s Carbon Reduction Commitment Energy Efficiency Scheme, introduced in March.
“In Australia we predominantly deal with sustainability or environmental managers within companies, whereas in Britain we’re sitting down with the chief financial officers of companies as these companies are obviously taking this more seriously because financial decisions rely on it,” Solsky says.
Nevertheless he credits the NGERS program for providing the catalyst for his business to learn the ropes quickly in this new industry. “When we take our product to Britain and the US, we’re really leveraging our experience in Australia and the hard lessons learned under NGERS,” he says. “While we haven’t had the support from the government with an ETS, I think being an early mover on NGERS as an economy has given our business a major competitive advantage in the global market.”
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