The introduction of the carbon tax has put additional pressure on companies to report their carbon emissions, requiring them to understand their position throughout the year — not just at year end. It’s time therefore for CIOs to start thinking about how they’re going to gather this information.
In most organisations, much of the relevant data does exist but it tends to sit in disparate and unmanageable silos or, at best, is collated in excel spread sheets leading to inconsistent data. So where do you start?
Data on environmental impact originates from literally every part of a company and can take many forms. This means that technologically, measuring an organisation’s carbon emissions can be a major challenge. But the non-technical barriers to launching an effective environmental management program are not to be underestimated either.
Many of the problems companies experience as they try to implement an environmental program of this type stem from the lack of clear ownership. Who within the company owns the issue — is it the CIO, is it a district or regional manager, the marketing department or someone else?
An effective environmental management program is only possible once it becomes an issue at the board of directors’ level. Once the importance of measuring and managing the environmental footprint becomes a part of the corporate strategy and a means of managing board-level risk, a company is in a position to put much harder policies into place and can in effect force the different departments and cross functional teams to collaborate around the issue.
Why ad-hoc systems don’t work
It is certainly true that when implementing a carbon reporting system not much can happen without a mandate from the top. But even with that executive mandate and support, many companies are finding that they lack the technology to efficiently measure their current environmental footprint or make business decisions based on environmental impact.
Adequately tracking environmental footprint data is virtually impossible while using ad hoc systems like spreadsheets because outside of an enterprise application, no combination of spreadsheets is comprehensive enough to do the job. True environmental footprint management can involve a complex and huge body of data and the natural place for that data and where most of it is already to be found is within the enterprise system, the ERP system.
What to consider when selecting environmental management tools
Currently, most organisations with any degree of environmental footprint measurement rely almost exclusively on either standalone carbon footprint software or on one-off integrations between ERP tools and either packaged or custom software.
To this end, there are a few questions to ask enterprise software vendors that claim to offer a solution in this area:
- Can you track environmental impacts like you can track cost?
- Can you set the system up to measure the variables that are most relevant in your industry?
- If you’re a manufacturing organisation, consider how the environmental management tool links into the supply chain
- How will the environmental management tool track environmental impacts?
- How much flexibility is there to change and how much will it cost?
Questions about the flexibility and broad capabilities of these enterprise software tools are particularly important. There will be new reporting demands made upon you and your company, new products will bring new challenges, so an environmental management solution that can only measure one impact, like carbon emissions is of little value. Similarly, environmental management solutions that rely on extensive integrations that are limited in capability or expensive to change and expand are equally undesirable.
Before selecting any environmental management solution, be sure to think not only of your immediate needs but also how your needs could change in the future and how the various enterprise solutions can continue to accommodate them.
Rob Stummer is the managing director of IFS Australia and New Zealand
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