The art (and science) of assisting companies with strategically managing complex data is not an easy one and there are many firms attempting to make sense of it all. On Nature of Business this week, I discussed this topic with Chris Erickson, founder and CEO of Climate Earth. We talked big data and how his company uses it to help companies make better business decisions, both financially and environmentally, with a particular focus on supply chains.
A self-described escapee from Silicon Valley, Erickson’s background is in computers and enterprise software, and he has spent the last 6 years or so in environmental analysis. The primary impetus for launching Climate Earth had to do with, as he describes, “Big companies having a big lever for moving the needle on climate change and sustainability but lacking the infrastructure to manage sustainability like you would an enterprise. We asked, how we could make the biggest economic force on the planet be the biggest environmental force.”
Climate Earth focuses on three means by which it delves as deeply as possible into achieving optimally managed leadership.
- Coverage -- Looking at everything. Supply chains and within a company’s four walls so that executives have all data, environmental and financial.
- Integration -- One cohesive data model. Metrics presented in a financial context and reporting by organizational structure (business unit and product line).
- Scale -- Recognizing that this is a big data problem and much larger than analysis currently being done on spreadsheets. Environmental data and enterprise systems expertise all need to be in one bucket.
Erickson feels it imperative to possess the expertise to go inside financial management systems, extract data and download millions of transactions, and then marry non-traditional environmental impact data with traditional data. It is about tweaking the chart of accounts so that everyone in team that now receives a financial budget and environmental budget, which can be used for strategic planning as well as for reporting systems to track progress.
One company that works with Climate Earth is U.S. Concrete. It is one of the top-10 concrete producers in the United States and wanted to look beyond manufacturing traditional cement. (Cement accounts for 9 percent of all greenhouse emissions in the U.S.; every ton of cement adds a ton of CO2 into the atmosphere).
Climate Earth created for them an executive dashboard, where company execs can track how many gallons of water are used per yard of sales, the average carbon footprint per yard of sales, as well as profit per yard of sales. Climate Earth delved into its core business systems and extracted all material that comprises concrete, pricing, and all performance attributes for all 18,000 concrete mixes.
As Erickson explains, architects, general contractors, engineers are now able to log into Climate Earth’s data banks and request, for instance, 12,000 psi concrete with a certain percentage of water. Up pops up a screen that shows the mixes that meet those criteria plus each mix’s environmental impacts. U.S. Concrete can now make revenue and business decisions based on environmental impacts through this new lens.
I asked Erickson what companies thought was working the most with Climate Earth’s approach. He said that the integration of environmental data within business systems to create an overall comprehensive system is not only resulting in enthusiasm but also serious ROI.
Down the pike, Climate Earth will be focusing on markets where there is an intersection of environmental impact and market opportunity. Erickson feels these opportunities are and will continue to be in construction, food, and consumer products. And as far as trends go, his company is looking closely at natural capital accounting, which places a dollar valuation on natural assets.