Tag: Greenhouse gas

Featured Posts, Technology / Software

Why are Salesforce hiding the emissions of their cloud?

Salesforce incorrect carbon data
The lack of transparency from Cloud computing providers is something we have discussed many times on this blog – today we thought we’d highlight an example.

Salesforce dedicates a significant portion of its site to Sustainability and on “Using cloud computing to benefit our environment”. They even have nice calculators and graphs of how Green they are. This all sounds very promising, especially the part where they mention that you can “Reduce your IT emissions by 95%”, so where is the data to back up these claims? Unfortunately, the data is either inaccurate or missing altogether.

For example, Salesforce’s carbon calculator (screen shot above) tells us that if an organisation based in Europe moves its existing IT platform (with 10,000+ users) to the Salesforce cloud, it will reduce its carbon emissions by 87%.

This is highly suspect. Salesforce’s data centers are in the US (over 42% of electricity generated in the US comes from coal) and Singapore where all but 2.6% of electricity comes from petroleum and natural gas [PDF].

On the other hand, if an organisation’s on premise IT platform in Europe is based in France, it is powered roughly 80% by nuclear power which has a very low carbon footprint. If it is based in Spain, Spain generates almost 40% of its power from renewables [PDF]. Any move from there to Salesforce cloud will almost certainly lead to a significant increase in carbon emissions, not a reduction, and certainly not a reduction of 87% as Salesforce’s calculator claims above.

Salesforce incorrect carbon data

Salesforce also has a Daily Carbon Savings page. Where to start?

To begin with, the first time we took a screen shot of this page was on October 1st for slide 26 of this slide deck. The screen shot on the right was taken this morning. As you can see, the “Daily Carbon Savings” data hasn’t updated a single day in the meantime. It is now over two months out-of-date. But that’s probably just because of a glitch which is far down Salesforce’s bug list.

The bigger issue here is that Salesforce is reporting on carbon savings, not on its carbon emissions. Why? We’ve already seen (above) that their calculations around carbon savings are shaky, at best. Why are they not reporting the much more useful metric of carbon emissions? Is it because their calculations of emissions are equally shaky? Or, is it that Salesforce are ashamed of the amount of carbon they are emitting given they have sited their data centers in carbon intensive areas?

We won’t know the answer to these questions until Salesforce finally do start reporting the carbon emissions of its cloud infrastructure. In a meaningful way.

Is that likely to happen? Yes, absolutely.

When? That’s up to Salesforce. They can choose to be a leader in this space, or they can choose to continue to hide behind data obfuscation until they are forced by either regulation, or competitive pressure to publish their emissions.

If we were Salesforce, we’d be looking to lead.

Image credits Tom Raftery

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(Cross-posted @ GreenMonk: the blog)

Featured Posts, Technology / Software

SAP’s 2010 Sustainability Report demo’d

I had a Skype chat recently with SAP’s Chief Sustainability Officer Peter Graf where he gave me a demo of their new 2010 Sustainability report.

With Peter’s permission, I recorded the demo for publication on YouTube. The video above is the result and the transcription is below.

Some highlights Peter mentioned include:

  1. Sustainability reporting has saved SAP €170 million (!),
  2. SAP are updating their Sustainability report quarterly and are embedding it more and more closely with their financial reporting and,
  3. SAP have deep social media embedding in their report

With this report, SAP have put clear blue water between themselves and any other sustainability report. SAP can still take it up another few notches (productising it, putting an api in front of it, publishing in xbrl, etc) but this is the kind of reporting everyone needs to be moving to, as a baseline. Kudos to SAP for once again setting the bar with this report.

Now here’s the transcription of the demo:

Tom Raftery: Hi, everyone. Welcome to GreekMonk TV. We are talking today to SAP’s Chief Sustainability Officer, Peter Graf, who is going to give us a quick demo of the new 2010 SAP Sustainability Report.

Peter Graf: So, this is SAP’s 2010 Sustainability Report, which people can find online at sapsustainabilityreport.com. The report lays out the three key areas of impact for SAP. In the first place, SAP wants to become a more sustainable company, so we are talking about our own sustainability performance. The second section of the report is about how SAP helps customers to run more profitably and sustainably, so that’s mostly a conversation about our applications and software solutions.

And then finally, there is a section on how people at SAP drive opportunity for others through IT. And then, certainly the last part, as always when we put our report on the line is that encouraging into action and dialog between us and those who come and visit the report. And we call that section Do Your Part and that describes how everyone can contribute.

Tom Raftery: Great. Can you show me some of the details of how SAP have done in the last year? How does it look onscreen, because it’s very different from any other sustainability report that’s out there?

Peter Graf: Exactly. So before we go there, the data that we talk about is all assured by KPMG, and there are two levels of assurance and yes, this report is A+ from GRI perspective. It’s got the best rating that you can get from GRI. It complies with a whole variety of standards, but most importantly, we have not only done limited assurance to our greenhouse gas numbers, we’ve actually gone for reasonable assurance, meaning the assurance company actually assures that this is really our footprint. And we do that because we believe in the future there will be much more scrutiny around how people are reporting greenhouse gas emissions.

And that’s what the greenhouse gas emissions look like. You can see the trend from 2000 to 2007; we’ve always increased our emissions. In 2007, we set ourselves the goal to reduce our emissions step-by-step back to the level of 2000 by the year 2020, so we have an absolute carbon target. That is pretty aggressive considering that in 2000, we had about 24,000 employees and already today in 2011, we have more than 50,000 employees and we want to obviously continue to grow as a company.

You can also see that we have kind of flipped the chart to kind of visually highlight that emissions are seen as a liability to SAP so they show below the line.

Tom Raftery: And clicking on any of those bars redraws the kind of pie chart on the right?

Peter Graf: Exactly, so you can go and drill into the different years and you can see how the emissions change. For example in 2008, we had 31% of our emissions from flights that also tells you that we include Scope 1, 2 and 3 emissions in our calculation.

That number dropped dramatically in 2009, given that in the times of economic crisis, we just don’t service as many customers, so you can see that here. And then in 2010, the number continues in absolute terms to be reduced, which is amazing given that we have actually increased our revenues by 17% in 2010 while reducing our emissions. You can see that very nicely when you look at the carbon emissions on a Euro basis. We are now at 33.9 grams per Euro revenue and in 2008, that number was 45.6 grams.

So, in terms of carbon efficiency we have dramatically accelerated and you can drill into different areas. For example, revenue in the Americas, you can actually go and look at different scopes and include or exclude them in the competition. So that’s the benefit of having this kind of interactivity.

Tom Raftery: The obvious question that comes to mind then is, if you are spending all this money on getting carbon out of your system, out of your organization, it must be costing the company a small fortune…

Technology / Software

Unfortunate EV choice won’t help SAP’s Greenhouse Gas reduction commitments

SAP's 2010 Global Greenhouse Gas Footprint

The graph above is taken from the Greenhouse Gas Footprint page of SAP’s Sustainability Report and it shows SAP’s global GHG footprint for 2010. Of particular note in this graph is that globally SAP’s 2010 carbon footprint for corporate cars is 24%. This is up from 23% in 2009 and 18% in 2008. This is obviously a problem for SAP who have publicly committed to reducing their Greenhouse Gas Emissions 51% (from their 2007 baseline) by 2020.

In an effort to help address this SAP decided to embark on a small scale Electric Vehicle (EV) project called Future Fleet. Future Fleet uses a fleet of 30 EV’s charged solely from renewable sources supplied (along with the charging infrastructure) by project partner MVV Energie.

SAP Future Fleet electric vehicle

SAP Future Fleet electric vehicle

SAP are using this project to test employee attitudes to EV’s but also to test their own EV eMobility charging and fleet management software which is being developed, and tested in tandem with the project. The software allows employees to log in and book cars for specific journeys between SAP sites in Germany, or for a day or a week at a time. The software also intelligently prioritises charging of cars based on expected upcoming journey duration, current battery state and other factors.

All good and laudable stuff. However, one major issue I have with the project is that for purely political reasons SAP chose an electric car for the project which seemed to be designed with the distinct purpose of turning drivers off EV’s…

Trends & Concepts

Friday Green Numbers round-up 04/23/2010
Green numbers
Photo credit Unhindered by Talent

And here is this week’s Green numbers:

Posted from Diigo. The rest of my favorite links are here.

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Trends & Concepts

Grid Watch: smartgrids meet smartcomms

New Meter

We have pointed to the ongoing convergence of wireless communications and smart grids before, for example in this video about Tropos Networks and in Tom’s stump pitch on sustainability and mobility, but some news from this week throws the trend into stark relief.

Carbon Trust investments, the VC arm of a non-profit organisation working to lower the UK’s carbon emissions just announced it is to invest in a network management company called Arieso.

Why would Carbon Trust do that? After all, what does mobile network optimisation have to do with energy management? According to the newenergyworldnetwork story:

Rachael Nutter of CT Investment Partners said, ‘Energy consumption in mobile phone base stations is a significant proportion of the opex of mobile operators, as high as 50 per cent in the most extreme cases.

That’s the thing about sustainability – it doesn’t need to be seen as a cost center… rather it can, and should be, part of optimisation activities. Lower carbon, lower energy, cheaper mobile roll-outs. What’s not to like?

If you’ve been following GreenMonk for a while you should know we’re wedded to bottom up sustainability approaches – “from the roots up” as we call it, which is one reason we’ve sponsored, and contributed to the awesome UK HomeCamp community, founded by Chris Dalby, who now works at UK smartmeter firm Current Cost. Seems things are moving along there too.

One of the key players attempting to drive home automation as an activity for “civilians” is ZigBee. It just started working with GreenPeak, which specialises in ultra low power mobile silicon chips, designed to be used in battery-free devices. [See a theme emerging? ;-) ] No batteries isn’t just a lower carbon play though- it also means less heavy metals and toxic chemicals. What’s the news? GreenPeak is now Zigbee compliant.

Finally some smart grid news.

Swiss smart meter player just took $165m in new funding.

Could be smart timing.

The Climate Group, sponsored by GE, Google, HP, Intel, Nokia and others  just called on Barack Obama to adopt a goal of providing every household with real time information about their electricity use.

Meanwhile last week Microsoft hohm and Ford announced they are working together on home energy to Electric Vehicle management and integration, to help people that own these EVs charge them cost effectively. Its worth pointing to one of my favourite GreenMonk interviews in that light- we talk to Greg Frenette of Ford about EV smart grid convergence.

It really is time to run the first HomeCamp US!

Ironically enough, when I searched for a creativecommons attribution only shot of a smartmeter i found one from my colleague Michael Coté in Austin. His utility called it a smartmeter, but unless he  has access to the data generated I don’t see how it deserves the name. But that’s a subject for a different blog, and indeed a line of Greenmonk research.

The really keen eyed among you may have noticed how many of the links above come from newnet news. No accident. I love the feed. Its like a shot of good news tequila every morning – something to warm your spirits.

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Trends & Concepts

Rich Lechner talks about Smart Buildings and a Smarter Urban Infrastructure

I had a great chat about Smart Buildings the other day with IBM’s VP Energy and Environment, Rich Lechner.

Why are smart buildings important? Well, as Rich says, in the US buildings are responsible for about 70% of the energy consumption and for about 40% of the greenhouse gases emitted.

When you combine that with the fact that 3.5bn people are living in cities today and that that number is rapidly increasing you start to see why making buildings smarter needs to be a very high priority.

The chat with Rich was great because, as with all my interviews, it was unscripted and Rich talked knowledgeably and compellingly about the kinds of ways we can make buildings smarter, and gave the Venetian Hotel in Las Vegas as a case study of what can be achieved.

The interview was so good, I split it in two rather than cutting any of it out – here’s part 2:

[Disclosure] – These videos were sponsored by IBM.

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Trends & Concepts

Investors, the EPA and now the SEC are making pollution an increasingly unattractive option

Shareholder
Photo credit Neubie

A perfect storm consisting of the EPA, the Securities and Exchange Commission (SEC) and investors is pressuring companies to come clean on their environmental risks and performance.

I wrote a post a couple of weeks ago about FaceBook’s decision to use a primarily coal-burning utility to power its new data center where I asked should FaceBook’s investors be worried about the decision.

Now the SEC has started taking an interest in this area as well and recently clarified that companies’ have responsibilities [PDF] to report on:

  1. the direct effects of existing and pending environmental regulation, legislation, and international treaties on the company’s business, its operations, risk factors, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations
  2. the indirect effects of such legislation and regulation on a company’s business, such as changes in demand for products that create or reduce greenhouse gas emissions and
  3. the effect on a company’s business and operations related to the physical changes to our planet caused by climate change — such as rising seas, stronger storms, and increased drought. These changes to the environment could have a number of material effects on corporations, such as impairing the distribution and production of goods and damaging property, plant, and equipment

In announcing the clarification SEC Commissioner Luis A. Aguilar stated that the SEC will begin to be far more proactive on environmental reporting:

The Commission’s action today is a first step in an area where the Commission will begin to play a more proactive role, consistent with our mandate under the National Environmental Policy Act of 1969, to consider the environment in our regulatory action. The National Environmental Policy Act charged the Federal Government “to use all practicable means” to, among other things, “fulfill the responsibilities of each generation as trustee of the environment for succeeding generations.”

Noting the interest of the SEC and their clarification around companies’ environmental risk reporting requirements, investors are now becoming more vocal and are increasingly asking companies to report more information about their environmental risks and responsibilities. These investors need to look after the long term interests of their funds and the last thing they want is to have their monies disappear in some environment-related mishap like the Kingston Fossil Plant coal fly ash slurry spill or a class action litigation.

Ceres, the non-profit network, reported recently that investors filed a record 95 climate change resolutions, a 40% increase over the 2009 proxy season! And these are serious investors. Jack Ehnes, CEO of CalSTRS for example, manages $131 billion dollars in assets. That’s billion, with a b!

As Ceres notes:

Many of the investors are part of the Investor Network on Climate Risk (INCR), an alliance of more than 80 institutional investors with collective assets totaling more than $8 trillion.

$8 trillion! Investors with a war chest of $8 trillion wield a lot of clout.

Combine this with the fact that on Dec 29th 2009 the EPA’s Mandatory Reporting of Greenhouse Gases Rule came into effect and it states:

suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to EPA. The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

So, the EPA is requiring the reporting of Greenhouse Gas Emissions from the top 10,000 emitters in the US, the SEC now has environmental risk reporting and transparency in its sights and investors with considerable resources are looking for more details on possible environmental risks from companies they invest in. You have to think that this is not a good time to be in the pollution business!

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Featured Posts, Trends & Concepts

Should FaceBook’s investors be worried that the site is sourcing energy for its new data center from coal?
Mountain-top removal
Photo credit: The Sierra Club

Should FaceBook’s investors be worried that the site is sourcing energy for its new data center from primarily coal-fired power?

FaceBook is fourth largest web property (by unique visitor count) and well on its way to becoming third. It is valued in excess of $10 billion and its investors include Russian investment company DST, Accel Partners, Greylock Partners, Meritech Capital and Microsoft.

FaceBook announced last month that it would be locating its first data center in Prinville Oregon. The data center looks to be all singing and dancing on the efficiency front and is expected to have a Power Usage Effectiveness (PUE) rating of 1.15. So far so good.

However, it soon emerged that FaceBook are purchasing the electricity for their data center from Pacific Power, a utility owned by PacifiCorp, a utility whose primary power-generation fuel is coal!

Sourcing power from a company whose generation comes principally from coal is a very risky business and if there is anything that investors shy away from, it is risk!

Why is it risky?

Coal has significant negative environmental effects from its mining through to its burning to generate electricity contaminating waterways, destroying ecosystems, generation of hundreds of millions of tons of waste products, including fly ash, bottom ash, flue gas desulfurisation sludge, that contain mercury, uranium, thorium, arsenic, and other heavy metals and emitting massive amounts of radiation.

And let’s not forget that coal burning is the largest contributor to the human-made increase of CO2 in the air [PDF].

The US EPA recently ruled that:

current and projected concentrations of the six key well-mixed greenhouse gases–carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)–in the atmosphere threaten the public health and welfare of current and future generations.

Note the wording “the public health and welfare of current and future generations”

Who knows what legislation the EPA will pass in the coming months and years to control CO2 emissions from coal-fired power plants in the coming months and years – and the knock on effects this will have on costs.

Now think back to the litigation associated with asbestos – the longest and most expensive tort in US history. Then note that climate change litigation is gaining ground daily, the decision to go with coal as a primary power source starts to look decidedly shaky.

Then GreenPeace decided to wade in with a campaign and FaceBook page to shame FaceBook into reversing this decision. Not good for the compay image at all.

Finally, when you factor in the recent revolts by investors in Shell and BP to decisions likely to land the companies in hot water down the road for pollution, the investors in FaceBook should be asking some serious questions right about now.

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Trends & Concepts

This is a very opportune time to be investing in sustainability management software!
Greenhouse gas emissions
Photo credit James Jordan

I wrote about SAP’s launch of their Sustainability Performance Management software recently. This is a space which is of massively growing importance given the increasing regulations around greenhouse gas emissions, for example.

I was heartened then to hear in a recent discussion with SAS that their Sustainability Management software was launched in April 2008!

For background, SAS are a business analytics software company with with an enviable record of 34 years growth and profitability reporting global revenues of US$2.31 billion in 2009 up 2.2% over 2008. SAS invested 22% of 2008 in R&D (an unusually high figure in the industry) have over 11,000 employees, and 45,000 customer sites in 100 countries. This is a significant company with a serious track record in research and development.

No surprise then that their solution, like the SAP one, is also very comprehensive, encompassing industry templates (GRI, CDP, IPIECA, etc.), customisable pre-built KPI dashboards, reporting, forecasting, scenario modeling (using the AMEE universe of data for scenario analysis – [disclosure – AMEE are a GreenMonk client]).

And, according to Alyssa Farrell, Marketing Manager for SAS Sustainability Solutions, the software is extremely inter-operable:

SAS also recognises that organisations may have other technologies in-house, so our software can be adapted to whatever environment they may already have. SAS has read/write access to any ERP system, we work within the Microsoft Office environment, so you can even use Excel to pull down SAS Analytics. SAS recognises that there is not one solution for everybody and so all the different solutions from SAS recognise that we need to work within this very complex technology application environment.

SAS have had some big customer wins with their Sustainability software:

With Microsoft and CA also entering this space, I think it is fair to say, Sustainability software is here to stay. In fact, Groom Energy Research reported that climate venture capital investment in Enterprise Carbon Accounting (ECA) firms topped $46m last year, the number of companies offering carbon software solutions grew from 40 to 60 over the course of the year and they predicted that the emerging US market for carbon reporting software is set to grow seven fold over the next two years.

Obviously aware of these trends when we asked Alyssa about pricing, she responded:

The way that our solution is priced is scaled to the size of the organisation [or a division of an organisation] and recognising that it is an early market and we need to get out there and seed our customers, this is the time to buy SAS for Sustainability!

Now, it would seem, would be a very opportune time to be investing in sustainability management software!

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Featured Posts, Trends & Concepts

The rise of the energy manager role
computer
Photo credit: Steve Jurvetson

One of the topics which I responded to on the recent IBM Eco Jam was “IT’s Central Role In Managing Energy & Carbon”.

This topic was raised by another analyst (again IBM has asked me not to mention participants by name but if the analyst in question sees this and wants me to name him/her, I have no problem so doing) when s/he posted the following:

Forrester’s research on energy & carbon management systems predicts that IT organizations will take on a central role in choosing, owning, and operating these systems. The challenge of managing energy & carbon emissions will increasingly be information-related, and it’s enterprise IT organizations that have the expertise to install and operate software systems of record across the entire company. Just like systems for managing customers (CRM), money, materials (ERP), and employees, carbon & energy management systems will collect, integrate, analyze, and report on the newest set of assets/liabilities that will be used by internal and external stakeholders to judge corporate performance.

Now, I have no issues whatsoever with IT organisations having a role in choosing Energy Management systems. IT’s function would involve installing and supporting the software so naturally they’d have a say in its purchase. They’d also have a role in crafting requirements documents and reviewing responses but “owning and operating” these systems? I don’t think so.

I realise part of this has to do with empire building ambitions by IT but really, since when was energy management a core competence of IT?

I absolutely realise that sustainability is all about information and data, and certainly IT has a role in ensuring that this information is always available but asking IT to own and operate energy management systems is, frankly, ludicrous. You might as well ask IT to own and operate the financial management systems.

So if not IT, who then should run these systems? I foresee the rise of a new role – the Energy manager, in companies. The Energy manager will likely report to the CFO, the COO or the CSO (Chief Sustainability Officer). The energy manager’s role will be to minimise the company’s energy (& probably water) footprint and to report savings in monetary, kWh and tons CO2.

With the increasing regulatory landscape around carbon emissions (i.e. the Carbon Reduction Commitment in the UK), carbon measurement and reporting will become mandatory for most companies. In that environment having someone specialised in energy management, responsible for this function will start to seem like a very good idea.

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