Enterprise energy and carbon management: What to consider in 2011

Enterprise energy and carbon management regulations are rapidly emerging as drivers of business behavior. Learn what to consider when planning your energy consumption future.

The United States has been relatively slow to adopt legislation as a way to influence enterprise energy and carbon

management (EECM), but firms aren’t waiting to be told what to do. Dozens of vendors already provide tools to help monitor, manage and, in some cases, monetize energy and carbon use and production. It’s instructive to note which rules and guidelines they support when planning for the future.

Rules and regulations for enterprise energy and carbon management are emerging as drivers of business behavior, but there is no global consistency in terms of requirements. At the moment, we see three classes of requirements to consider:

Regulatory requirements. Issued and enforced by governments at state, national and supranational levels, such as European Union rules.

Voluntary guidelines. These guidelines are developed by government agencies and nongovernment organizations to provide guidance and serve as the basis for emerging legislation.

Corporate standards. This emerging category is usually driven by the requirements of a single firm that has a major impact on other firms in its ecosystem. It is then enforced throughout a supply chain by economic imperative (suppliers that score well on the Wal-Mart Sustainability Index, for example, receive preferential treatment from Wal-Mart).

In the course of our research, we recently looked at the rules and guidelines supported by the following representative EECM vendors (presented in alphabetical order):

Each of these firms offers software that helps with one or more monitoring and management functions that let enterprises track their energy consumption data to identify opportunities for reduction and savings, or track the carbon impact of various parts of their supply chains. Of particular interest is that so many products now make it easy to produce standard reports to satisfy the requirements or guidelines, and the data may be exported to spreadsheets or other tools to aid in the management process. The firms mentioned come at the problem from different angles, ranging from business intelligence backgrounds to water and energy management consulting firms. In addition, some provide standard reports for travel, waste and water usage that are likely to become regulations more widely used in the future.

The following list captures the main rules and guidelines supported by these firms, and provides a glimpse into the regulatory future of the global enterprise:

International energy and carbon management regulations

Carbon Disclosure Project: Independent, nonprofit organization that operates a primary database of corporate climate change information.

Greenhouse Gas Protocol -- A partnership between the World Resources Institute and the World Business Council for Sustainable Development that delineates among Scope 1, 2 and 3 carbon accounting standards.

Carbon Trust Standard: Certification program to demonstrate progress with the GHG Protocol and ISO 14064 best practices.

The Climate Registry: North American collaborative effort to set transparent standards to facilitate a common GHG emissions registry.

ISO 14064/14065: An international standard to address climate change and support emissions trading.

Kyoto Protocol UNFCC

National

U.S. Department of Energy -- DOE 1605b

U.S. Environmental Protection Agency (EPA) Mandatory Reporting Rule

U.S. EPA Climate Leaders

U.S. EPA Energy Star Reports

U.S. Clean Air Act

U.S. Solid Waste Act

Australia’s National Greenhouse and Energy Reporting Act

Canada’s China’s GB13690-92 (chemical management and reporting)

Japan PHDCL

Philippine Clean Air Act

U.K. Carbon Reduction Commitment -- Energy Efficiency Scheme Report, a mandatory U.K. program

State

California Climate Action Registry (CCAR)

California Air Resources Board

Corporate

Wal-Mart Sustainability Index

In addition, indices such as the Dow Jones Sustainability Indexes are driving companies to manage sustainability as a competitive advantage. This supply-side look at rules support may be used to guide planning activities for the CIO or enterprise risk manager.

As energy and carbon management become easier under emerging standards, it becomes more important not to lag behind competitors in terms of adoption. Look for adoption of these tools as a defense mechanism first, and a profit generator later. Early experience with the tools will prove invaluable for early differentiation and long-term financial and ecosystem benefits.

Adrian Bowles has more than 25 years of experience as an analyst, practitioner and academic in IT, with a focus on IT strategy and management. He is the founder of SIG411 LLC, an advisory services firm in Westport, Conn., and director of the Sustainability Leadership Council.

This was first published in January 2011

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