Financial Times Reports on Sustainability: Market increases focus on good corporate citizenship
By Jessica Twentyman
In early October, members of the European Parliament’s environment committee voted overwhelmingly in favour of changes to the Waste Electrical and Electronic Equipment (WEEE) directive, which would impose on member states a requirement to collect 85 per cent of the e-waste they generate from 2016.
It is a hugely ambitious target and not everyone agrees it is realistic.
Either way, the proposal faces a bumpy ride, as the European Parliament, the Commission and the EU Council of Ministers slug it out over what the actual target should be when the revised directive comes into force.
Thomas Knopp, environmental project manager at Panasonic Europe, an arm of the electronics group, will be watching those skirmishes with interest.
Once a month, he makes the journey from his Hamburg workplace to Brussels, where he is a lobbyist on e-waste recycling issues as part of DigitalEurope, a trade association for large technology manufacturers.
However, the bulk of his time is spent ensuring that Panasonic is able to meet its obligations under the current WEEE directive, across 18 European countries, each of which implements and enforces WEEE in its own way. He is also charged with ensuring compliance with EU regulations on packaging and battery recycling.
That is no easy task, but Mr Knopp is able to ensure that Panasonic Europe meets targets by using recycling software as an add-on to its enterprise resource planning suite.
The software provides Mr Knopp with a repository of information, collected across Panasonic’s European operations, from which he can monitor progress.
He and his team can classify and track recyclable materials by type, weight, usage, destination, brand and product category and manage recycling costs across a large number of contractors.
“It’s a hugely complicated picture, but I absolutely need to have a complete view to ensure compliance and good governance,” he says.
When Panasonic started using the software – SAP’s Recycling Administration package – in 2003, the market for sustainability applications was a good deal less crowded.
However, as improving the sustainability of business processes has moved up corporate agendas, a crowd of software vendors has rushed in.
At Forrester Research, an IT market analyst company, Christopher Mines has identified more than 70 vendors specialising in energy and carbon management (E&CM) software alone.
Other suppliers focus on making product development, supply chain and facilities management more sustainable.
Some of these providers are big software vendors, such as SAP and Oracle. Others are smaller specialists – CSRware, Cloud Apps, Enablon and FirstCarbon Solutions, for example.
Increased regulation certainly plays its part in convincing technology decision-makers to invest in these products, says Mr Mines. In Europe, EU proposals to incorporate sustainability into financial reporting requirements could boost demand further.
But there are other factors, not least the demands of investors and customers for companies to be more open about their sustainability goals and achievements, he says.
That’s a view shared by Dan Vogel, chief executive of Enablon. “Non-financial information about a company’s performance has become far more important to overall corporate value in recent years. Sustainability metrics – whether they relate to energy use, waste management or health and safety – are central to that value,” he says.
But at many companies, he adds, managers are still forced to collect relevant data on an ad hoc basis and manage it in Excel spreadsheets.
That is how James Rushen, group head of environment at Centrica, a utility company, was handling data on energy use, carbon emissions and waste and water management until two years ago. He now uses software from Enablon to streamline data collection and management across Centrica’s international operations.
Regulation was not a big driver behind the decision to go ahead with this investment, he says.
His main goal was to make easier voluntary reporting on sustainability – to the Carbon Disclosure Project, the FTSE4Good Index and the Dow Jones Sustainability Index.
But with the introduction of the UK government’s CRC Energy Efficiency Scheme (formerly the carbon reduction commitment) last year, Mr Rushen has found he has in place a source of verified information that makes compliance a good deal easier.
“The data are the same, whether you’re reporting to stakeholders or reporting to regulators,” he says.
“For a large, global company such as ours, with publicly stated corporate social responsibility ambitions, having that data in one place and having confidence that it is accurate is a big part of being a good corporate citizen.”