How To Make the Jump into Sustainability

By David A. Kelly and Heather Ashton, Upside Research

Much attention has been paid in recent years to sustainability initiatives. In a recent blog, we covered the investment made in Enablon, one of the emerging leaders in this space that is quickly becoming an enterprise category of software solutions (See Enablon Funding Signals Growth in Sustainability Market).  This funding coincides with the notable funding of carbon and energy management start-ups, including Hara, which received $25 million in May 2011, bringing its total funding to $45 million. Similarly, C3, another carbon and energy management vendor, has reportedly received nearly $40 million in funding.  From the software vendor side, these investments bring credibility to the diverse sustainability solutions market for enterprises. But, what does it mean for the buyer side, for the corporations who are determining exactly how they should engage in sustainability initiatives, and what the best software solution is to facilitate these new initiatives?

We believe there are some important distinctions to make within the sustainability category, and some specific decision points that can impact an enterprise sustainability project.  Here are a few key points to consider:

• What is the major driver for your sustainability effort? It can be external compliance, including regulatory drivers or industry consortia that cause a company to look to sustainability. Or, it could be customer-driven, with a high-profile brand interested in increasing sustainability practices that it can then share with stakeholders. Depending on the main driver for the sustainability initiative, a company may choose to join a cloud-based solution to report sustainability practices or it may determine it needs to make sustainability an integral part of its core operations, thereby searching for an enterprise-strength sustainability platform.
• How quickly do you want results? It may make sense for some companies to test the sustainability waters with the “low-hanging fruits,” turning to carbon tracking tools that can help a company quickly identify where they sit on the “green” spectrum, and if there are immediate measures that can be taken to reduce their energy footprint.  Reducing corporate travel is a very simple, direct way to impact a corporate carbon footprint.
• Who is driving the sustainability initiative? If it is a project largely driven by a line-of-business group, the type of solution they select will vary greatly from one that an interdisciplinary team composed of business, executive, and IT members would choose. The former would benefit most from a cloud-based service that has an intuitive user interface. The latter may select a platform that has tight integrations with other enterprise applications to gain content and provide seamless flow of data and information to support a wider sustainability effort.
• What is your budget? Naturally, budget does have an impact on choosing a sustainability solution. Many of the enterprise solutions are designed much like other enterprise software categories, such as ERP or BPM, with licenses, maintenance, integration and implementation costs.  The total cost of such a solution can quickly mimic any other enterprise solution category. Conversely, there are some very low-cost ways to jump into the sustainability game. A number of smartphone applications exist that can help a company quickly involve its employees in sustainability initiatives (CarbonTrack from SAP can get you started).

It is easy to get caught up in the hype of sustainability. Everybody wants to have a corporate conscience, and now more than ever that conscience has a direct impact on brand popularity and the bottom line. However, it is important as an enterprise to approach sustainability much like any other enterprise software category. Understand first what your main drivers, set goals, choose who within the company will oversee and direct the projects, and select a sustainability solution that reflects all of these and is within your budget. It is good to see some of the leading vendors in this emerging space receive funding to continue their efforts at delivering a class of innovative solutions that customers want. However, at the end of the day, it is another application that needs to play within your corporate sandbox, and it is important that it reflects what you want from sustainability.