Sustainability Metrics #2: Is Software a Solution?
2011, #2
NET NOTES from the Women’s Network for a Sustainable Future (WNSF)
CONTENTS
I. Network Presentation
II. Presenters
III. Key Findings
IV. Presentation
I. NETWORK PRESENTATION
As companies come under increasing pressure to track sustainability outcomes through sophisticated metrics, the need for IT solutions is skyrocketing. Understanding and classifying the data is hard enough–and now sustainability software platforms themselves are proliferating. How can software help manage, sort, measure, analyze and report results? When and how is it really useful? And how can a company choose solutions that really fit its sustainability goals? Following WNSF’s standing-room-only peer-learning session on sustainability metrics in February, this panel discussion explored the tools beneath the measurement process–with expert contributions from sustainability leaders like J & J to top solutions providers (themselves also users) like SAP, CA Technologies, and the Continuum Network, as well as analysts like Gartner who take a hard look at the sprawling sustainability software scene.
II. PRESENTERS
Hiranya (Moderator): Senior Research Analyst, Gartner Inc.
Elizabeth Lascelle: Senior Director, Strategy & Assurance, Worldwide EHS, Johnson & Johnson
Allison Cusano: Sustainability Specialist, SAP
Elisa Turner: Founder & CEO, The Continuum Network
Cynthia Curtis: VP & Chief Sustainability Officer, CA Technologies
III. KEY FINDINGS
• When measuring sustainability metrics, most companies begin by using spreadsheets. This becomes difficult, as the metrics become more complex. Software tools simplify the process, while providing more accurate and efficient results.
• However, no matter how sophisticated the software tools are, ultimately it’s the people who enter data into the system. To ensure quality data, employees need to follow a documented procedure with an auditing or tracking system when assessing sustainability metrics.
• Integrating sustainability into core business strategy involves shifting people’s mentalities and company culture. Companies should encourage innovation in order to engage employees and devise new solutions to sustainability issues.
• Currently there are many software providers working independently. Once integrated reporting is established, there will likely be consolidation in this market.
IV. PRESENTATION
Hiranya (Moderator): Senior Research Analyst, Gartner Inc.
Because sustainability means different things to different organizations at different stages of maturity, Ms. Fernando says, Gartner examines a broad spectrum of issues in researching and assessing corporate and supply chain sustainability strategies and technology. In addition to examining energy and carbon footprints, Gartner addresses issues of water, raw material inputs, waste, as well as green branding and social responsibility issues.
The panelists, she pointed out, can each talk from a different perspective about how technology can be leveraged to meet sustainability goals. Companies’ sustainability initiatives and targets vary based on their goals. Exacting a target and assessing whether it has been achieved requires tremendous data gathering and tracking exercise followed by rigorous analysis of that data. This is where software tools come in handy. Whether it is a spreadsheet or a more sophisticated system, tools are essential in tracking the impact of a company’s sustainability initiatives.
Elizabeth Lascelle: Senior Director, Strategy & Assurance, Worldwide EHS, Johnson & Johnson
Ms. Lascelle described the challenges that Johnson & Johnson faces in assessing metrics, and the solutions it has devised by creating its own in-house software tool. Eight years ago, when Johnson & Johnson developed this system, there were few alternative solutions on the market. This system has now served Johnson & Johnson so well that other units within the company use it for purposes beyond sustainability reporting.
The strength of the system is that it is a simple tool with a lot of flexibility, allowing users to change what kind of data is collected and how it is measured as and when necessary. With changing trends in sustainability reporting and with the upcoming establishment of integrated reporting, the system will likely be reexamined and adjusted.
Ms. Lascelle said the most difficult aspect of sustainability reporting is not the technology, but rather the people; no matter how sophisticated the software system is, she said, the quality of the resulting data can be only as good as the data that people put into the system. This is why employees must follow a documented procedure with an auditing or tracking system to ensure that data entered are both accurate and reproducible.
Allison Cusano: Sustainability Specialist, SAP
As both a practitioner and a solutions provider, SAP develops software solutions to track sustainability. SAP has reported its goal to decrease its carbon footprint by 50% by the year 2020, from its peak in 2007. In 2010, it has decreased the footprint by 6% while increasing revenues by 17%, and has achieved an overall reduction of 25%.
The trend for creating sustainability measurement software tools began about three years ago, primarily to measure environmental impacts. Over the last two years, software has evolved quite a bit, particularly with the introduction of Global Reporting Initiative (GRI) certificate management systems that integrate non-environmental sustainability factors. SAP–like most companies–began measuring sustainability using spreadsheets, but today leverages its own applications for automated reporting. Metrics quickly become too complex to be analyzed solely with spreadsheets, Ms Cusano said, and that’s when companies begin to seek more sophisticated tools and software.
Ms. Cusano agreed with Ms. Lascelle that the human error factor can be an obstacle to ensuring quality data. For this reason, SAP delivers direct data collection and integration in its software solutions to help minimize how much data must be manipulated manually. There will always be some points of data entry requiring manual input, but to avoid errors, SAP builds data validation into their systems to help users manage data quality at points of data entry and post data entry.
Elisa Turner: Founder & CEO, The Continuum Network
The Continuum Network (TCN), a global thought leader in integrated sustainable business practices and reporting, supports enterprises with the tools to better understand the value achievable from integrated models and sustainable actions, strategies and investments. Ms. Turner explains that, having worked with corporate executives to develop the company’s C5 enterprise tools, TCN foresaw that the green IT and sustainability market was headed in a direction in which carbon management systems would only be a small piece in the overall ‘sustainability technology equation’. In order to maximize the ROI of sustainable initiatives, organizations need to track much more than carbon, says Ms. Turner. Delivering actionable, sustainable business plans for organizations require a integrated system to collect, visualize, analyze and communicate actual corporate performance across multiple corporate performance areas - not just energy and carbon.
Measuring traditionally disparate Key Performance Indicators (KPI’s) through technology is one way to simplify the process of revealing opportunities and risks. Ms. Turner comments that tools which benchmark, financially verify and analyze sustainability performance, internally and externally, are key for businesses in an environment that still lacks regulated national or international standards for reporting This enables the companies to track the costs of different initiatives and the return on investments to make sound business decisions.
Ultimately however, Ms Turner reflects, integrating sustainability into core business strategy is about more than numbers. It involves changing people’s mentalities and corporate culture. Employees need to be engaged in sustainability, and innovation is key in making this transition.
Companies using The Continuum Network’s C5 sustainable enterprise tool can aggregate and simultaneously track progress-against-target across (client defined) KPIs within Economic, Environmental, Human Capital, Stakeholder Capital and Governance assets - internally and across the supply chain. Through the C5 Dashboard, senior executives can easily identify the cause-and-effect of actions in all areas on the bottom-line. While, from the employee perspective, built-in social networking allows KPI specific teams across the organization - such as the “Water Team” - can collaborate on best practices. This encourages so-called “co-ompetition” in which employees compete to improve location, regional or divisional scores. To ensure accurate reporting, the data is auditable.
Cynthia Curtis: VP & Chief Sustainability Officer, CA Technologies
With a background in both IT and strategy development, Ms. Curtis says leveraging IT to drive sustainability is where her two passions converge. CA Technologies has been reporting on sustainability since 2006, using the Carbon Disclosure Project (CDP). For the first couple of years, it also tracked data solely using spreadsheets, which quickly proved inadequate. CA Technologies developed metrics software as a solution to its own difficulties in tracking data. It is thus both a user and a seller of sustainability management software.
Sustainability data mainly pertains to energy. This is in part because energy issues, such as carbon footprints are easier to measure and because energy has a very direct impact on the bottom line, Ms. Curtis says. That said, customers are increasingly asking about other sustainability factors, such as water, waste and social issues.
There are currently many sustainability software providers working independently. Ms. Curtis said there is likely to be significant consolidation in this market over the next few years.
Ms. Curtis said that while software solutions significantly improve the data collection process, it is essential to engage employees in order to devise sustainability solutions. Ms. Curtis illustrated this point with an example from CA Technologies’ Indian office. In an effort to decrease the amount of food thrown away in the cafeteria each day, the company began measuring what was wasted on a daily basis. Each day a sign was placed in the cafeteria announcing how many grams of food went to waste and how many people the wasted food would have fed. Within three weeks, the food waste decreased by 75%. This demonstrates that while metrics are valuable, innovation is key to effectively implementing sustainable solutions.