We've been researching carbon management (we call it Enterprise Carbon Accounting (ECA)) vendors and helping large companies refine requirement and make vendor choices since 2007. Despite the dip in hype over sustainability in the last several years, companies continue to look for software to help improve their sustainability performance. As firms enter the fall budgeting season, we receive a numerous questions about purchasing sustainability software for the first time or evaluating options at contract renewal.
Here are the four most common questions we receive and our answers.
Our view: It obviously depends on the written, prioritized needs for an organization. Enterprise solutions that cover all three areas are much more costly, take longer to implement, but generate higher business value. Software should automate an existing process, but process maturity varies among companies. Corporate energy management is an emerging process and is typically a staff, rather than a line, responsibility. EHS solutions tend to be facility-specific, rather than corporate-wide. Many companies start with a low cost, ECA/sustainability solution for several years as their true needs and processes are clarified. Software may be from a specialist vendor or part of a larger, software suite.
Our view: The top two business drivers for ECA investment, according to our research and field work, are responding to sustainability survey requests from top customers (like Walmart) and improving the organization's brand image (or reducing the risk of image problems). Many global firms simply can't afford not to show continued sustainability improvement to customers and other stakeholders. Despite the laboriousness nature of excel spreadsheets, we find few companies basing the business case on improved productivity of the sustainability team.
Our view: The many vendors now offer a basic ECA software that covers scope 1 and 2 carbon reporting and the tracking of water and waste usage. Free tools from The Climate Registry in the U.S. or spreadsheets are useful starting points for some, but tend to be cumbersome after several years. Other firms start with a low-end solution from a hungry start-up or from one of the ECA market leaders. Firms looking for a basic ECA solution that may only be used by 2-10 internal users will find dozens of affordable options in the market. Sustainability teams or the lone sustainability leader strapped for time will often outsource the data entry and management to a consultant so they can focus on more strategic tasks.
Our view: Pricing varies considerably based on the breadth of solution (especially if the software involves supply chain, LCA, scope 3, and energy management) and number of facilities and countries covered. We're seeing pricing from USD $40,000 to USD $80,000 per year for SaaS/Cloud products that match most needs of a fairly sophisticated, global corporation. Pricing has declined considerably in the last several years and some vendors charge even less. Companies making purchases should also evaluate the strength of a vendor's customer references, financial viability, and commitment to sustainability. The vendor market place has change considerably since 2007 but long-term leaders are emerging.
You can learn how two companies approach software tool investment and selection on a free webinar next week hosted by Groom Energy and PE International. Representatives from Mettler Toledo, a $2B global manufacturer of precision parts, and Buckman, a global specialty chemical company, will share their approach to ECA software. Join us and ask your questions during the Q&A. Sign up here.