SAP sees green in sustainability software for carbon compliance

By Alexander B. Howard, Associate Editor 22 Oct 2009 | SearchCompliance.com

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More on carbon management Watch that carbon footprint: Running a sustainable business Podcast: Energy efficiency, carbon driving sustainable business development Startup helps turn carbon footprint management into cost savings

Greenhouse emissions regulation is one of the major compliance trends IT professionals are preparing for this year, and if a proposed cap and trade bill passes, implementing carbon compliance won't be a theoretical exercise.

The good news, at least in terms of the bottom lines of businesses and agencies alike, is that managing for sustainability can often reveal inefficiencies and energy waste. That business case will be important for both the public and private sectors, given the direction coming from the White House.

At least one startup has already moved to capitalize on that potential, turning carbon footprint management into cost savings. Now one of the world's biggest business software makers, SAP AG, is turning its eye to the sustainability market.

"Sustainability is about efficient management of resources," said SAP CEO Leo Apotheker at a recent event at the National Press Club in Washington, D.C. "The ultimate objective is to enable every single business process to have sustainability elements.

"Sustainability is one of the most vexing things that humankind has to address," Apotheker said. "Climate change is not just a moral opportunity, it's a business opportunity. For many countries, it could be a third industrial revolution."

SAP is moving on a number of fronts to address sustainability in-house and to provide the tools for other organizations to do so as well, including an "on-demand, cloud-based tool for managing carbon footprint," said Robert Enslin, president of SAP North America. The tool, available at SAPcarbonimpact.com, is the result of SAP buying into carbon management earlier this earlier this year when it acquired then-privately held Clear Standards.

"Sustainability software takes notable forms, from reporting to actually changing business processes," said Apotheker, such as software that drives smart meters and helps people optimize usage.

When it comes to cloud computing, however, sustainability has a different meaning. Energy usage now has significant bottom-line impact in the IT industry, which Apotheker said "has the same carbon footprint as the airline industry," at 2% of global carbon emissions. As he put it, "we need to clean up our own house."

Apotheker said SAP started working on sustainability about a year ago, but it "takes a while" to be measurable. "If I look at what we've achieved in terms of fuel consumption or behavioral changes, we see a payback of six months," he said.

He also commented on SAP's return on investment for implementing sustainability programs and in investing in data centers to support its cloud infrastructure:

"Cloud computing can't be ignored," said Apotheker. "This goes to the entire stack. If you write efficient code, you can ensure the server doesn't sit idle when it's not doing anything. If you use virtualization, you can have fewer servers. Few servers require less heat."

Meanwhile, sustainability studies and federal government initiatives are also forcing the issue. On Oct. 5, President Barack Obama issued Executive Order 13514, "Federal Leadership in Environmental, Energy and Economic Performance," which requires the head of each federal agency to designate a senior sustainability officer within 30 days. The order also requires agencies to establish and report to the Council on Environmental Quality chair and director of the Office of Budget Management a percentage reduction target for agency-wide greenhouse gas emissions. The White House followed up on that order by announcing GreenGov Challenge, which asks federal employees for ways to improve energy efficiency.

In addition, McLean, Va.-based consulting firm FedSources has issued a study that looked at 14 federal agencies, four states and the Western Climate Initiative, said Ray Bjorklund, senior vice president and chief knowledge officer at FedSources.

FedSources found 133 sustainability initiatives, including renewable energy, green buildings and water filtration. "Many of the programs that we discovered are now being driven by ARRA [the American Recovery and Reinvestment Act] and by standards of accountability and transparency," said Bjorklund. "IT is indispensable for the government to drive efficiencies."

Climate change is not just a moral opportunity, it's a business opportunity. For many countries, it could be a third industrial revolution. Leo Apotheker CEO, SAP AG

The government is responsible for only 1.5% of U.S. energy consumption but can influence all sectors, given that it spends $20 billion a year on energy, he said.

The FedSources study showed three primary drivers for sustainability: cost/efficiency, image (or branding) and basic compliance with regulations. "When we looked at initiatives, it was quite a spectrum," said Bjorklund. "We saw everything from simple recycling of paper to sophisticated alternative energy resources to new ways of doing business, like automated energy metering of facilities."

According to Amy Liu, deputy director of the Brookings Institution's Metropolitan Policy Program, cities potentially could realize the highest savings from sustainability software that helps municipalities meet carbon compliance standards. "In the United States, there are 364 metro areas," she said. "The largest sit on 12% of land area and yet generate 75% of economic products." On balance, Liu said, the largest metro areas are more efficient and their citizens use less energy. "The average metro resident has a carbon footprint that is 14% smaller than the typical American."

Which states have gone the furthest down the path towards sustainability? "Depends on how you want to measure," said Bjorklund. "Michigan stands out. They have reasons, because of their economic development. We didn't look at California, but they have leadership, Colorado has leadership."

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