By Lynne Blundell

David Solsky, managing director CarbonSystems Australia

While politicians continue to huff and puff about whether or not we need a carbon emissions trading scheme businesses are not waiting around to see what happens. Many are busily taking steps to more effectively manage both their energy use and their carbon footprint in anticipation of new era of higher energy prices.

David Solsky, managing director of carbon audit company, CarbonSystems Australia, told The Fifth Estate there has been a marked growth in the number of companies undertaking carbon audits.

In the last six months, he says, the company has notched up nearly 30 new clients, pushing it into the top position in its field with around 50 per cent of the market,  involving 5000 physical sites to be audited, and requiring it to double its staff numbers.

New clients include the Catholic Church, Macquarie University, Domino’s Pizza, Metcash, Colliers and one of the big four accounting firms.

The surge in business, Solksy says, is partly driven by the National Greenhouse and Energy Reporting System, which requires certain businesses to report on their energy use, production, and greenhouse gas emissions by October 31 this year.

But an equally strong driver for carbon auditing is the awareness that energy prices are going to rise steeply in the near future. And of course many see it as an essential part of their corporate social responsibility.

“NGERS legislation is what is really pushing the reporting this year but once the ETS [emissions trading system or carbon pollution reduction scheme] is in place we will see increased energy prices. Managing energy costs is crucial to remaining competitive. A retail company with 500 outlets is going to be very interested in how much energy is being used in each outlet if energy prices rise 30 to 40 per cent over the next few years,” says Solsky.

“There are also some companies that are not aware of just how much of their business costs are tied up in energy. When they realise they are spending $1 million on energy there is an ‘Oh My God’ moment.”

This growing awareness of just what energy use is going to mean in a carbon-priced future is behind the steep rise in demand for CarbonSystems’ auditing program.

CarbonSystems was started three years ago by David Solsky and Andrew Lamble, who both have accounting and IT backgrounds. Their system, the Energy Carbon Intelligence System was first developed in 2003 to read electricity smart meters. According to the company it is now being used globally by dozens of organisations across more than 10,000 locations.

The system allows companies to gather information from their energy and fuel bills as well as from utility company smart meters and enter it into a central database so that they can manage energy use more effectively and reduce their carbon impact.

Once entered into the system, electronic data is sent to a central hub where it is reformatted and converted into standard units for reporting.

Solsky and Lamble saw a rapid rise in the demand for their system in late 2007/early 2008 on the back of a federal election in which climate change was a central issue. Then the global financial crisis hit and companies pulled back to focus on their core business.

But with signs that the economy is recovering, carbon audits are well and truly back on the agenda, says Solsky.

“In the last six months things have really stepped up again. The NGERS compliance scheme means that the larger emitters need to track their emissions data but voluntary reporting is also becoming a high priority for companies as part of their corporate and social responsibility,” says Solsky.

Catholic church jumps on board

The Catholic Church is one organisation that has jumped on board the carbon audit wagon, earlier this year engaging CarbonSystems to do a complete carbon audit of their vast network of businesses.

The Catholic church in Australia operates around 1500 schools and parishes, over 240 aged care and hospital facilities as well as thousands of churches and community buildings.

Catholic Earthcare, an organisation set up in 2002 by bishops to advise the Church on environmental issues, has estimated the Australian Catholic Church has a carbon footprint that dwarfs that of other major organisations.

“Although measurement has just begun, Catholic Earthcare estimates the carbon emissions of the Catholic Church in Australia could be in the vicinity of 1.2 million to 1.5 million tonnes annually,” a Carbon Earthcare statement said.

“This is on a par with the carbon emissions of the Australian government, excluding defence operations, of 1.7 million tonnes, and dwarfs the emissions of organisations such as the National Australia Bank and Insurance Australia Group.”

David Solsky says because of its size the Catholic Church is able to leverage cost benefits from economies of scale when using the CarbonSystems auditing tools. The key to employing a system across such a large organisation was to break it into smaller units, says Solsky.

“It is a large complex energy enterprise platform so it was important to be able to break it [the carbon auditing tool] down into smaller products,” says Solsky.

By making the system flexible, the same that is used in a small company product can be just as easily used applied to a large mining company, says Solsky.

Grocery Chains

Recent clients include Australia’s largest independent chain of grocery outlets, with 1500 stores nationwide and one of the big four accounting firms. There is growing demand from professional services companies and for retail outlets with large networks of outlets.

“The really powerful aspect of this type of auditing system is that organisations can start benchmarking by geography or type of store, and it allows them to rate themselves relative to their peers. From the basement to the boardroom a business is able to read electricity smart metres to manage their energy usage,” says Solsky.

Property industry a key area for carbon audits

Another key area is the property industry, with Colliers International recently engaging CarbonSystems as a global technology partner for energy and carbon emissions management. Colliers is delivering the auditing system to its landlord and occupier clients globally under the Colliers Envirometrics brand to help track and measure environmental performance.

“This is a really significant thing for us and for Colliers as they have 15,000 buildings around the world. It will help Colliers’ clients make their buildings more energy efficient, which represents an enormous amount of carbon emissions,” says Solsky.

And of course Australia is not alone in the growing demand for energy management. Britain is launching a similar scheme to NGERS, the Carbon Reduction Commitment scheme, later this year to come into effect on 1 April 2010.

And CarbonSystems is preparing for the jump in demand for carbon audits.

“We’re expecting a similar increase in demand in the UK as we experienced here as a result of NGERS,” says Solsky. “So we’re in the process of opening up in the UK by setting up a distribution arrangement for our product there. The scheme is expected to affect 5000 to 6000 UK companies.”
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