October 22, 2009, 9:53 PM — New environmental regulations coming into favour in the United States, Europe and soon in Canada as well will require many companies to be able to measure the environmental impact and carbon emissions contributed by their business and their product. That will require technology, and SAP (NYSE: SAP) sees opportunity for the IT industry and the channel around measuring sustainability.
Europe is much further ahead around accountability and sustainability, with new product labeling regulations requiring companies to disclose the carbon impact of products on the product labels. And the U.S. is catching-up. New regulations from the Environmental Protection Agency(EPA) will require companies in certain industries, such as utilities, oil and gas and factory farming, to report to the EPA on their carbon impact beginning January 1, 2010. Canada is further behind, but at the provincial level the push by several provinces to establish cap and trade and a carbon market will require companies to measure their carbon output.
As an enterprise business intelligence vendor, SAP feels it is well positioned to provide businesses with tools to both measure their carbon impact as well as profile possible investments to mitigate environmental impact said Peter Graf, SAP's chief sustainability officer.
"When you have regulations coming up, and carbon labeling, you need to make sure your information is correct and that's what SAP has been doing for a long time, providing audit trails," said Graf. "We can now do that for sustainability and carbon impact."
Through its acquisition of Clear Standard, SAP has acquired and developed Carbon Impact, an on-demand carbon measurement that connects with businesses' SAP backend systems to leverage that data to provide a truly end-to-end measurement and dashboarding of a company's carbon impact.
There are three customer camps, said Graf. Those moved only by regulation, those that look at sustainability opportunistically to drive business value, and those that look at is strategically as part of sustaining their business model for the long-term.
"There is definitely a sense of urgency," said Graf. "Not every industry is going to be regulated, but we're concerned most of the organizations impacted aren't even aware of haven't tools in place to measure what their carbon impact is."
Graf said SAP sees sustainability as both a direct and a channel business opportunity, and the solutions are currently available through SAP's channel partners. It's also as much a consulting engagement as it is a software implementation.