Wednesday, 25 February 2009

Greenstone Carbon Management

Last week I spent some time with Greenstone, which describes itself as a specialist carbon solutions company working to help clients measure, manage and mitigate carbon emissions.

Greenstone is a private company funded by a number of individual investors and run by a combination of IT people and environmental scientists - Kevin Anderson, who I mentioned in a posting a couple of weeks ago is a member of the board.

The company has spent the last two years developing its carbon accounting software solution called Acco2unt (notice the CO2 in the middle of the name - it works better with a more flexible font!). The solution enables emissions measurement and management, reporting and tracking, as well as 'what if' scenario planning and ROI estimation.

Clearly good software is essential for cost-effective carbon accounting and management. It's prohibitively expensive and inflexible to have highly qualified consultants come round once a year to measure emissions and it's this gap in the market that the company is trying to fill. But solutions also need to be comprehensive to allow for both first time carbon accounting and also for sophisticated users planning to reach specific reduction targets.

The Acco2unt solution is sold on an annual subscription basis with prices related to the level of breakdown of data required, the number of countries covered, etc. It's an online solution, which means that customers don't have to keep up to date with the latest standards and compliance requirements. The software draws on Greenstone's database of climate change impact factors to calculate the carbon according to various methodologies, including GHG protocols, national and international standards and compliance requirements.

Greenstone also provides Acco2unt to partners as a portal solution, i.e. the partners sell on to their clients whilst adding their own services.

The company is targeting prospects that have an obvious need to manage and report emissions, such as participants in the Carbon Disclosure Project (CDP), the public sector, companies that will need to conform to the UK's CRC (Carbon Reduction Commitment), etc. Those responsible for delivering the data are seen as the prime target (the CSR route tends to be avoided because of slower sales cycles).

It’s still early days for the company. Fujitsu Services in the UK is a customer and much of the proving of the software has apparently been achieved through their relationship. A half dozen clients are listed on Greenstone's web site and the company is apparently talking to a similar number of prospects, both enterprises and portal partners.

There aren't many direct competitors to the Greenstone enterprise solution. Most offerings tend to be bolted on to existing finance, supply chain, etc software, rather than cover the complete enterprise. But this will be a critical area of competition as more and more organisations start to monitor emissions.

Greenstone is keen to create a critical mass in the market as soon as possible to try and ‘own’ a piece of the carbon balance sheet business for future trading and offset requirements. That's the real challenge, though. It's going to be a tough fight, with some heavyweight software players trying to ensure they don't lose out. Ultimately we may well see smaller suppliers such as Greenstone succumb to invitations from their larger rivals who have been slower off the mark.

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