August 6th, 2010 by Michel Gelobter

The topline energy story of July 2010 was undoubtedly the failure of the Senate to pass energy or climate legislation.  But right below the surface the Federal government continues to increase its role as a market maker for a low-carbon, energy efficient economy.

First, it’s trying to transform itself.  In early July, the US Government issued formal guidelines for how it and its agencies are to account for greenhouse gasses.  From nitrogen trifluoride to enteric digestion (don’t ask!)  the Federal Energy Management Program published for the first time the rules which all federal agencies will need to follow to report their emissions by the beginning of next year.

What this means is that by January 5^th, 2011, all Federal agencies will have to have compiled and reported a complete greenhouse gas inventory.  Soon thereafter, they will have to lay out a roadmap for how they will cut energy use by 28% or more in the next nine years.  Cabinet secretaries have joined the ranks of more than 1,800 Fortune 2000 CEOs in sweating out an annual greenhouse gas report.

A second, more far-reaching initiative is afoot.  The Government Services Agency (GSA)  oversees almost all Federal procurement.  In July, they also published new greenhouse gas reporting guidelines, but these apply to more than 95% of government suppliers of goods and services.  So no new climate laws, but, if you want to do business with the Federal government, you’re on the hook for reductions more aggressive than any climate bill would have mandated.  And I’d guess that, building on clear Federal guidance, states and localities can’t be far behind in giving preferential treatment to suppliers that can prove that they’re carbon and energy efficient.

Between the battle for energy legislation and wildcards like the BP spill, 2010 has been far and away the most interesting year for energy policy in over 20 years.  The Obama Administration’s recent moves promise to keep all of us who serve or sell into the Federal market on our toes for years to come.

July 22nd, 2010 by Michel Gelobter

Many of our customers use us to track, manage and optimize their energy use and greenhouse gas emissions, but these are just one part of what we call Organizational Metabolism – the collective resources consumed and resulting outputs across an organization and its value chain – that go into making a company, a city, or a federal agency run.  One of the key resources tied to a company’s ability to grow revenue, control costs and manage risks is water.

Take one well-known pharmaceutical company with a global footprint.  Its U.S.  manufacturing was concentrated in a single facility that used 25% of the local water supply, and local regulators made it very clear that was as much as it would ever get.  How could it grow production? By transforming its processes and doing much more with less. Today, the more efficient plant produces twice as much product using less water than it did before it transformed itself.

Water itself can cost money, but it can also embed energy and greenhouse gas costs. In China and Bangladesh for example, fabric dyeing is a booming industry as just-in-time fashion drives trendy colors from the streets of Tokyo, Paris, or New York back into fabric manufacturing in rural factories. One informal study found that many factories flushed massive tanks of hot water several times a day for only a small number of dye shifts because orders came in with such urgency that there was no ability to efficiently schedule the batches. Instead, tens of thousands of gallons of hot blue or red dye-water would be flushed only to be reconstituted from virgin water shortly after.

And these factors come together to increase the risks to business from water. Bottling companies have been denied permits in water-rich counties around the Great Lakes because their parent brand was implicated in water shortages overseas.

Much has been made of the similarities between greenhouse gasses (carbon) and water. The analogy only partly holds because the return, risks, and costs from water are much more location-specific.  Where greenhouse gasses have the same impact everywhere they are emitted, the same use of water can have radically different impacts depending on whether it occurs in a region that is facing a drought or is (literally) flush.

But both GHGs and water remain critical to optimizing your company’s Organizational Metabolism. They are increasingly strategic to stakeholder/shareholder value, and they interact across the enterprise with everything from employee satisfaction to supply chain efficiency.  Most of all, water is a key ingredient to success, and companies ignore its strategic value at their own peril.

July 14th, 2010 by Joel Riciputi

Over the past few weeks our CEO shared a number of insights and trends for the environmental and energy marketplace. A consistent theme throughout this series was how effective, comprehensive, environmental and energy management comes down to realizing benefits from saving money and driving value through resource efficiency and optimization. One of the most tangible ways to do that is through the identification, prioritization, implementation and tracking of energy efficiency projects.

We won’t go on in detail about that again today, but instead wanted to share an interesting piece that focuses on this issue through a comparison with investments in cleantech. In his posting “Cleantech is a Bunch of Hot Air”, David Gold approaches the issue from the specific (and not well known) angle of how more than half of US energy consumption goes to the creation of hot air through waste heat. Read it for yourself to get the details, but the overall premise is that although not as sexy at times as other cleantech (wind, solar etc), energy efficiency and reduction initiatives can provide a more scalable and effective means to an end when it comes to environmental and energy management and a transition away from fossil fuels.

To keep it short and sweet, this is one of the many voices talking about the imperative of focusing on energy and resource optimization. Why? From operational efficiency and cost savings to risk mitigation and value creation, it’s where the proverbial rubber hits the road.

July 7th, 2010 by Amit Chatterjee

Part 4: Beyond Reporting

Over the last few weeks I’ve enjoyed sharing some of our insights on the continued exciting development of the environmental and energy marketplace. These have included trends we are seeing and lessons learned around buyers and stakeholders, business drivers and a shift in focus beyond carbon. This time around I thought it made sense to close out this series with our take on how leading companies and government organizations are incorporating environmental and energy management in a way that goes well beyond just reporting to what it’s really all about – saving money and driving value through resource efficiency and optimization.

Just as GHG or carbon management has often been a starting place for many organizations when they think about environmental and energy management, so reporting has been an activity that often has prompted them to take action. This can range from voluntary programs such as CDP or EPA Climate leaders to mandatory reporting that includes EPA’s MRR, The UK’s CRC program and NGERS in Australia. Additional reporting or communication can come in the form of company sustainability or CSR reports.

But where do organizations truly benefit from environmental and energy management? Remember those shifts I covered in the buyers and business drivers? Well same story here. It’s in real resource efficiency and reduction activities. And that requires identification, prioritization and tracking of resource optimization and reductions and extending these best practices across stakeholders and the value chain. At Hara, we have incorporated this into a methodology (and our solution) that enables companies to:

• Plan: Define strategies, optimize planning decisions, forecast reductions, identify objectives and metrics, and calculate timing and benefits for each initiative
• Act: Manage the execution of environmental and energy programs, track results per initiative, and provide an audit trail for any current or future regulatory requirements
• Innovate: Implement and leverage best practices for continuous improvements and business transformation

If you’re looking for ways to improve business efficiencies and save money, actions need to be taken to better manage and optimize the use of energy, water and other natural resources and materials. That’s not downplaying the importance of being able to confidently communicate your sustainability. Rather it again comes back to how organizations address the environmental and energy business imperative by implementing an end-to-end business process that enables them to increase business and operational efficiency, maximize brand and shareholder value, and manage risks.

How is this being implemented in the real world with our customers? It’s amazing when you stop and think about it how closely their initiatives and goals can sync up whether it’s a mid-size municipality like Palo Alto, our one of the biggest retailers in North America like Safeway. They may have drastically different business operations, yet what they are trying to achieve with their sustainability initiatives can be very similar in improving how they efficiently use resources and reduce emissions from their facilities to their fleets. And not to overuse the word, but on top of all this is how they make these initiatives truly sustainable by rolling them out across their internal operations and value chain partners.

From reporting to reduction, accounting to optimization, these leading companies and organizations are taking the steps needed to transform their businesses, and make sustainability both a profitable and competitive advantage.

June 25th, 2010 by Amit Chatterjee

Part 3: The Bottom Line

To pick up from where we left off, it’s time to discuss the business drivers motivating organizations to implement environmental and energy solutions that enable them to optimize resource efficiencies and empower an end to end business process from reporting to reduction. Similar to the flight to finance around stakeholders and the transition to core business operations, there has been a shift in business drivers to a clear emphasis on operational efficiencies and cost savings. Value creation drivers targeting customers and employees and risk management continue to be critical drivers, but we are increasingly seeing cost savings and efficiency coming to the forefront with many initiatives focused on energy, water and other resource efficiencies.

Speaking of efficiency, much of the action being taking by companies in resource optimization is focused on energy efficiency. So let’s take a look at the big picture and what type of opportunity that represents through a few numbers. First, the total US electricity consumption is closing in on 4 trillion kilowatt hours (kWh) based on the latest numbers from the from the US DOE’s Energy Information Administration. If you break that down, there is approximately 300 billion kWh in consumption for commercial buildings with many of those in use by the Fortune 1000. We estimate that energy efficiency optimization and reduction projects could close from 30 – 50 billion kWh with minimal capital outlay required – we’re talking mostly about the low hanging fruit. This represents huge cost savings opportunities, in the ball park of $5 billion if you use an average price of 10 cents per kWh. That’s a big payback opportunity for corporations and can also represent a clear competitive advantage.

What’s the evidence behind this shift? We’re not only seeing it in our direct interactions with customers, but have witnessed broader support for this trend. For example, as part of a webinar earlier this year we performed a survey with hundreds of participants from across industry and organization types including retail, high-tech, financial services, manufacturing, consumer products, travel, life sciences, energy and government agencies at all levels. During the course of the event we ran a poll asking attendees to rank what they saw as the top driver of environmental and energy business imperatives. With hundreds of responses, here’s how it fell out:

1. Cost Saving: 49%
2. Company brand/image: 26%
3. Request From Customers: 12%
4. GHG Regulation: 11%
5. Investor Pressure: 2%

Cost savings was far and away the number one driver. That certainly backs up what our customers say as they seek to grow and profit while reducing their environmental impact. Previously I covered how we are seeing a transition from project-based initiatives often managed primarily by a key individual or team, to a spectrum of business function. The shift in business drivers and stakeholders is really one and the same – the renewed focus on accountability for costs associated with resource and energy optimization and emissions management – or even better, additional revenue opportunities it can create.

Pick an industry, we’re seeing it. Retail (Safeway), high-tech (Intuit), media and communications (News Corporation), local/state/federal government (City of San Jose). As more and more businesses seek to effectively manage and optimize their organizational metabolism (the sum of the collective resources consumed and resulting outputs), it always comes back to the bottom line.

June 10th, 2010 by Amit Chatterjee

Part 2: Flight to Finance

Today I would like to pick up where we left off last week in talking about insights and lessons learned on how the environmental and energy marketplace has changed (and where it has not) over the past year. As mentioned, I’ll be covering a range of topics including shifts in focus, stakeholders, business drivers and business process. Last week we talked about the explicit shift to an approach that goes beyond carbon in the environmental and energy management business process to a more comprehensive approach to optimize and manage energy and natural resource inputs and resulting outputs.

Moving on from there, one of the key questions about this and any market is always… who are the buyers and stakeholders? We have certainly seen some interesting developments related to who are the key stakeholders when it comes to comprehensive environmental and energy management from reporting to reduction. In a nutshell, we are seeing a transition from project-based initiatives often managed primarily by a key individual or team, to a spectrum of business function owners as environmental and energy management has become embedded into core business operations with a renewed focus on accountability for costs associated with resource optimization and emissions management.

In 2009 we saw many drivers from brand value and customer engagement to international, national, and regional policy activity that often resulted in responsibility being shouldered by CSO types that have often emerged from a particular line of business (EH&S, facilities, operations) and had to take on cross-functional oversight of specific sustainability, reporting or CSR projects. What’s changed? In some ways, not much when you think about how it always comes back to the bottom line. But in the development of the market and the key stakeholders, we have witnessed what I like to call a flight to finance as resource optimization is leveraged as a means to improve profitability that can often start with the low hanging (yet often overlooked) fruit of energy efficiency.

With this shift, in many cases the business owners and their groups report up to the CFO or COO. And rather than just a reporting deliverable, cost savings and value creation become most important and initiative owners should be recognized and get credit for these efficiency activities. And speaking of stakeholders, doesn’t it make sense for shareholders to wildly applaud this type of behavior? It’s really all about being results driven – tying sustainability initiatives to the bottom line and vice versa. It’s more about cap ex and less about cap and trade. We see this reflected directly in our customers from Safeway’s focus on energy efficiency and risk management activity across thousands of stores, to the City of Palo Alto realizing cost savings of more than $500K just in their first year of implementation through a multitude of resource reductions and efficiency improvements, to News Corporation’s groundbreaking global energy initiative across their businesses and media properties, including The Wall Street Journal and Twentieth Century Fox.

As environmental and energy management has become a core business process, the result is that sustainability can’t truly be managed by a single individual, group or project team. Rather, we see it evolving to where a team of “sustainable operators” representing finance, supply chain, product development, purchasing, marketing and other core business operation functions, become the real stakeholders. All along we’ve been calling it the environmental and energy management business imperative – and it looks like many others now see it the same way.

June 1st, 2010 by Amit Chatterjee

Part 1: Beyond Carbon

As we wrap up the first year since unveiling Hara in the market and approach year three since founding the company, I find myself very optimistic based on how far we have come, and the growing market opportunity and business imperative for environmental and energy management. Hara’s customers now represent dozens of leading organizations across industries, from Safeway and News Corporation to Intuit, Aerojet and the City of San Jose. I recently found myself pausing to look back on how much has happened and what we have learned — and thought these observations might be useful to share with the Hara community.

Starting today and over the next several weeks, I’ll share some of these insights and lessons learned on how the environmental and energy marketplace has changed (and where it has not) over the past year, including shifts in focus, stakeholders, business drivers and business process. But before we dive in, for those of you that aren’t familiar with Hara and to help lay the framework for the topics l plan to cover, it might be useful to provide a bit of background on where we’re coming from.

So what do we do at Hara? First and foremost we empower an end-to-end environmental and energy business process from reporting to reduction, enabling organizations to grow and profit while optimizing their natural resource consumption and minimizing their environmental impact. We were founded on the premise of this comprehensive approach that enables organizations to establish an environmental and energy system of record, identify, prioritize and track reduction strategies and projects, and leverage best practices across stakeholders. Hara customers use the Hara Environmental and Energy Management (EEM) solution to manage and optimize their organizational metabolism – the collective resources consumed and resulting outputs across an organization and its value chain – including energy, water, waste, and carbon.

OK, so with this framework as background, I thought it would make sense to kick off the “musings” part with sharing what we have seen around the shift in resource focus when it comes to environmental and energy management. Depending on your level of involvement in the space, you’ve probably seen a mish-mash of terms for what organizations are addressing, but much of it has been around things like enterprise carbon accounting, GHG inventories and carbon management.

Why did carbon become a proxy for natural resource consumption? In large part this has been driven by the focus on carbon coming out of the efforts to address climate change from the international to local levels, and it certainly makes sense to try and focus attention and build understanding around a particular issue. Managing sustainability can mean many things and can be a challenge for organizations to get their arms around. As Kermit the Frog said, “it’s not easy being green.”

When you think about it in the bigger picture however, carbon is one (albeit a very important) output from multiple resource inputs that an organization needs to build into their plans to effectively optimize their operational metabolism. I’m certainly not belittling the importance of carbon and GHG management. But what we have seen – and what Hara has been focused on from the get go – is an explicit shift to an approach that goes beyond carbon in the environmental and energy management business process around optimizing resource inputs and resulting outputs that need to be measured and tracked to effectively take action from voluntary or mandatory reporting to energy efficiency and reduction projects.

What does that actually mean for businesses and government organizations? Well, it often starts within an organizations four walls and can incorporate energy, water, waste, other resources and yes, carbon as well. Depending on the organization this can then extend out into the value chain from transportation fleets to the supply chain. There are a number of drivers for why this is happening including sustainability becoming part of the core business processes, a focus on the bottom line, shifts in the key stakeholders, fits and starts around carbon related policy, and more, much of which I will cover in subsequent postings.

That all sounds great, but what about a real world example you might ask? For that I recommend looking at our customer the City of Palo Alto where they have not only reduced GHG emissions by 12% well exceeding their original goal of 5%, but in just their first year of implementation had resource reductions of 8% electricity, 25% natural gas and 22% in solid waste and realized cost savings of more than $500K. As I covered a few weeks back, Palo Alto recently was recognized as a Infoworld Green 15 winner. This award recognizes the city’s sustainability leadership and effective management of their organizational metabolism.

So on that note I leave you with this thought and question for today…How well do you metabolize?

May 21st, 2010 by Joel Riciputi

Information. Innovation. Resource optimization. Business transformation. This week Hara had the pleasure of co-organizing and participating in a Capitol Hill briefing, The Why and How of Energy and Carbon Management: Cleantech Software and the Latest Trends. We were honored to have the event sponsored and kicked off by the Select Committee for Energy Independence and Climate Change, and speak alongside the Climate Change Division of the U.S. EPA and our customer News Corporation. Attendees included Hill staff, federal agencies and DC area companies.

The event provided attendees with a foundation in the latest cutting-edge approaches to measuring, and consequently managing energy and carbon as well as the drivers for taking action. Businesses have increasingly recognized the cost-savings attributable to energy management and have responded accordingly, as demonstrated by the groundbreaking actions of News Corporation. At the briefing, News Corporation spoke to how they are implementing a range of energy and climate initiatives across their businesses and media properties, including The Wall Street Journal and Twentieth Century Fox.

Additionally, the U.S. EPA division responsible for developing and implementing the federal Mandatory Reporting Rule (MRR) for greenhouse gases provided the latest information on that program. The MRR and the President’s Executive Order 13514 have created a regulatory incubator for innovation and opportunity via energy and carbon management. With over 50 federal agencies that must prepare agency-wide greenhouse gas reduction targets, as well as 13,000 facilities that must collect and report emissions data by 2011, it’s increasingly important to understand how MRR and the EO will affect organizations and businesses.

The feedback we received is that the briefing helped contribute to this important discussion in DC and beyond in a meaningful way and we look forward to participating in more. It provided a focused forum for discussion around the latest innovation on the information technology side of the cleantech revolution. And why is that important? Well at the end of the day, many of the challenges in the energy efficiency, conservation, and renewable energy markets and programs today come down to information management.

It has become increasingly critical to have an environmental and energy system of record that enables organizations to optimize not only their energy and carbon management, but their broader resource management strategies. As my colleague Michel Gelobter blogged yesterday, “innovation is the only solution.” Absolutely, and you can’t get there without the information first.

May 20th, 2010 by Michel Gelobter

In February, I wrote about how Q1 of 2010 could well be the most significant quarter from an energy perspective for a decade forward or back.  I figured how are you going to beat $8 billion in nuclear subsidies, climate legislation moving in both Houses of Congress, Supreme-court backed climate regulations from EPA, and a freshly minted Copenhagen Climate Accord?

Just when you thought it couldn’t get any more interesting, we find ourselves halfway through Q2 with one new Senate bill and two more anticipated to follow, along with an oil spill of historic proportion. Issues like immigration reform are somehow mixing in with the timing of energy policy, EPA loosened their reporting thresholds, and the nation is set for a soup-to-nuts revamping of mining and mineral regulation. Oh, and according to economists, fiscal policy is artificially inflating the price of fuels and other natural resources.

In some sense, the Kerry-Lieberman clean energy bill represents a snapshot of the conflicting forces at play. It encourages nuclear power and offshore drilling but also increases regulatory oversight and even local veto powers. It sets aggressive greenhouse gas reduction strategies but also gives key industries more time to comply. It sets a price on carbon emissions but makes that price much more sector specific.

It has been and will continue to be a tumultuous time to plan for energy. Everyone who uses energy needs to find a path that optimally reduces their exposure to this volatility and sets them on course for sustainable growth. But interesting times means there just may not be  “one true way” through the thicket of costs and risks.

In uncertain times, companies thrive through understanding their current situation, planning their moves, driving their plans, and innovating, innovating, innovating. They don’t wait for certainty because those outcomes are always lower than future you choose, the fate you actually aim for.

At Hara, we call this process Discover, Plan, Act, Innovate, and we build solutions that help whole companies and whole communities make sense out of the confusion that often surrounds energy and resources. We know that innovation can be hard and we work to serve the new communities that are forming, inside and outside of companies, to share solutions and to make new sense for the new energy economy.

So it looks like the “most important quarter” may end up being the most important year or three, like we’ll be making sense out of the confusion for quite some time to come.  And in the face of confusion, innovation is the only solution.

April 22nd, 2010 by Amit Chatterjee

On behalf of Hara, I would like to congratulate the City of Palo Alto on their selection as an Infoworld Green 15 winner. This award recognizes Palo Alto’s sustainability leadership and effective management of what we call organizational metabolism — the sum of the collective resources consumed and expended. No matter what business you’re in, managing and optimizing your organizational metabolism matters to you, and Palo Alto is a great example.

Palo Alto is just one example of our customers across industry types from Safeway and News Corporation to Intuit and Aerojet, that are leading their peers into the post-carbon economy, by enabling an auditable environmental system of record and accessing best practices in order to increase their operational efficiency, maximize value and manage risk. We look forward to enabling other members of the Hara community to join these organizations as a sustainability leader by effectively managing and optimizing your energy, water and waste abatement strategies while reducing carbon emissions. 

Happy Earth Day!