Article

Startup helps turn carbon footprint management into cost savings

Scot Petersen, Executive Editor
Compliance management processes around the Health Insurance Portability and Accountability Act (HIPAA) or PCI have helped businesses meet government regulations around privacy and security. Measurable improvements to operational efficiency or the bottom line have been harder to come by.

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That business reality may be changing, however, as sustainable business compliance management efforts are also improving operations and identifying cost savings.

In other words, software that helps optimize an organization's carbon footprint, water usage, energy usage and waste management can do more than make compliance with PCI or HIPAA go easier: It can save an enterprise real money.

This is an opportunity that regulations and upcoming deadlines for greenhouse gas (GHG) emissions compliance have to offer businesses and governments, according to Gartner Inc. analyst John Van Decker. "Sustainability is about risk and opportunity; it's not about compliance," he said at the Gartner Risk Management and Compliance Summit 2009 in April in Chicago. "Carbon will be the proxy companies need to design and implement a CSR [corporate social responsibility] reporting solution.

"IT's role here is to help the enterprise come up with the most cost-effective way of collecting and analyzing this information and reduce the risk associated with data integrity," he said. "CSR teams have been neglected by IT and the result of this has been poor information and sometimes expensive systems. IT needs to figure out how to bring all of this together and develop a platform that provides consistency in how data is being reported."

Enter Hara Software Inc., a startup that launched June 1. Its first product, Hara Environmental and Energy Management (Hara EEM), is a Software as a Service application that enables companies to manage sustainability data and use that data to not only meet guidelines but also improve operations.

"Natural resources need to be consolidated and re-architected around business processes and actively managed," said Amit Chatterjee, CEO and co-founder of Menlo Park, Calif.-based Hara. "You get visibility into the data," he said of the Hara software. "Then control of what to do with the data, then create business processes that allow end-to-end management, and bring all of that to the strategic level."

The city of Palo Alto, Calif., has been using Hara to help get in voluntary compliance with California Assembly Bill 32, the Global Warming Solutions Act of 2006. The act sets GHG goals for 2020. Reduction measures to meet those goals need to become operative by 2012. Given 13 separate divisions, each accountable for their own budgets and resources consumption, Palo Alto city managers had a big challenge managing compliance data.

"Spreadsheets [were our only tool], which was a big problem," said Karl Van Orsdol, Palo Alto's energy risk manager/sustainability team. "We were given this overall goal for city operations, and then we needed to develop an implementation plan to carry out those goals. We took our inventory and broke it down by the 13 departments, and each got a carbon usage target."

An interdepartmental group then worked to collate 13 usage plans into an overall city plan, he said. "We had to juggle the many spreadsheets and needed a more centralized way to manage all the data as well as a system for monitoring the actions related to the reductions."

Cities are having a difficult time now. Cost savings that we can get from more efficient use of commodities are an important contribution to the bottom line.
Karl Van Orsdol
energy risk manager/
sustainability teamcity of Palo Alto, Calif.
Van Orsdol said the city is now on target to meet what he called "aggressive sustainability goals" of a 5% emissions reduction from a 2005 baseline by this year, and a 15% reduction from the baseline by 2012.

Along the way, however, Palo Alto found cost savings in the reduced use of electricity, gas and water, amounting to up to $700,000 over the next 12 months, and $2 to $3 million over the next three to four years, Van Orsdol said.

"Cities are having a difficult time now. Cost savings that we can get from more efficient use of commodities are an important contribution to the bottom line," he said. "Costs are definitely something Hara will help us with, and on the flip side the ability to manage [operations] more effectively is a key value driver."

Van Orsdol said the system encourages city leaders and department managers to go online and see their contribution to the overall city effort. He said he likes the "dashboard" feature that gives "overviews of particular situations, what departments are doing what, who's ahead, in green, yellow and red lights."

Palo Alto plans to expand the use of the system to local businesses and eventually to its residents.

Let us know what you think about the story; email: Scot Petersen, Executive Editor


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