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Green Business

Craig Charlton (Australia) - You Can't Improve What You Can't Measure: Preparing for a Carbon eConomy

After months of rigorous debate and rampant speculation, details of the Australian government's $23-a-tonne carbon tax legislation have finally emerged. The government aims to bring in a tax on carbon next year before introducing a full emissions trading scheme as early as 2015. If successful, the government's trading scheme will affect businesses across Australia with IT departments at the forefront of carbon accounting implementation.

Are your systems ready?

While the idea of Green IT is nothing new, the introduction of such a scheme would have a lasting impact on the nation's sustainable business practices. Businesses will increasingly be required to quantify and report organisational greenhouse gas emissions, conduct audits and take into account the cost of carbon in investment decisions and business planning. Australian businesses will need to ensure that they have the right systems and controls in place to facilitate compliance. While vagaries around carbon accounting policies mean businesses still have some time up their sleeve, it's never too early to start planning, especially where complex enterprise resource planning (ERP) implementations are involved.

What exactly is carbon accounting?

Carbon accounting involves measuring and benchmark¬ing a business' greenhouse gas emissions for a specific reporting period. All fossil fuels, when burned, emit different carbon dioxide. Once the amount and type of fuel is identified, carbon emissions can be calculated from fossil fuel combustion. Measuring your company's emissions is a complex process, involving detailed calculations. A good carbon accounting system should enable your business to become proficient in identifying, analysing, auditing, tracking, managing, benchmarking and reporting on your carbon emissions, environmental impact and energy consumption.

How can businesses prepare for the carbon challenge?

Business managers should look to collaborate with departments across their entire organisation, from CIOs and IT managers to procurement and financial, to ensure their ERP systems are up to not only today's challenges, but tomorrow's as well. On the one hand, your ERP system must be flexible and scalable, and on the other, it is becoming increasingly important to expand your analytics programs. Your system should empower you to meet evolving reporting and regulatory requirements, while optimising the performance, cost and value of your governance, compliance and risk efforts.

As we move towards a carbon economy into a period filled with new compliance challenges, it is important not to forget the corporate social responsibility that has, up until now, underlined many of our sustainability efforts. Australia plays an important role in setting the ethical benchmark in our region's push for sustainable development.

Only recently a report published by the UN environmental programme (UNEP)* in collaboration with the commonwealth scientific and industrial research Organisation (CSIRO), claimed that a new ‘green industrial revolution' that massively improves resource efficiency is needed in the Asia Pacific region. With efficient use of materials actually declining in the past two decades, UNEP estimates that per capita resource consumption of ‘materials', such as construction, minerals and fuels, needs to be around 80% less than today if sustainable development is to be achieved.
While UNEP's report underlines the region's need to dramatically boost resource efficiency, for the budding green economy to have meaningful impact and sustainable change, it is mandatory that your business has a valid means of measuring its worth to justify continued investment.

* Resource Efficiency-Economics and Outlook for Asia and the Pacific, September 2011, Regional Office for Asia and the Pacific, United Nations Environmental Programme - Bangkok, Thailand.

By Craig Charlton, Senior Vice President of Asia Pacific Operations, Epicor Software Corporation

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