Report Shows Future Growth, Current Challenges for Carbon Software Market

Report Shows Future Growth, Current Challenges for Carbon Software Market

Regulatory shifts in climate change policy around the world will spur companies to ditch the simple Excel spreadsheets they've been using to track their emissions in favor of carbon management software.

The trend will lead to an explosion within the market, pushing its value from at least $20 million now to more than $250 million in 2012, a new report found.

But as companies make the transition from spreadsheets, they often find themselves confused by the ever-growing selection of carbon management software on the market, according to Verdantix, the U.K.-based research firm that published the report today, titled "Green Quadrant: Carbon Management Software."

"Managers thrown in at the deep end of the carbon management in the last two years now realize that they have serious issues with data collection and accuracy," David Metcalfe, the report's author, said in a statement Thursday. "But carbon managers risk falling into the trap of buying the wrong software. They told us that they are confused about which vendor to buy from. In fact, more than 50 percent of the individuals we interviewed had not even heard of 90 percent of the vendors."

Companies are finally recognizing the risks posed to their business, such as higher energy costs, climate change laws, carbon costs and competition around sustainability, the report found. Verdantix interviewed 16 large companies to gain insight into their efforts to measure and manage emissions data.

"We were horrified by the prevalence of Microsoft Excel as the tool of choice to collect and store carbon data," Metcalfe said. "This immature approach to data management triggers a wide range of risks such as inaccurate reporting, an inability to forecast future emissions and constricted communications on sustainability performance. This is bad for the brand, bad for financial management, and bad for strategic positioning."

The company also analyzed 22 carbon management software vendors based on 77 criteria of its Green Quadrant methodology. It characterized six as "Leaders:" Enablon, Enviance, ESS, Hara, IHS and ProcessMAP.

Green Quadrant: Carbon Management Software (Global) Courtesy of Verdantix
CA, Carbonetworks, Greenstone Carbon Management, SAP and SAS were deemed "Challengers" for qualities such as a "razor-sharp focus on carbon management needs." The report also classified other firms as specialists or entrepreneurs, but warned that each offered strengths suitable for different companies.

For example, Carbon Hub, Carbonetworks, Greenstone and SAP would be strong contenders for organizations that need to focus on carbon management, reporting and reductions. Other firms, such as CA, PE International and SAS may be more suitable for retail and consumer goods businesses with complicated sustainability programs that carry direct consequences for brand image.
 

The report, Verdantix Green Quadrant: Carbon Management Software can be purchased online and is available to Verdantix clients at www.verdantix.com.

Photo CC-licensed by Flickr user jimrhoda.