David Solsky

By Tina Perinotto

14 March 2012 -– CarbonSystems, an Australian company barely three years old, has fended off competition from the world’s heavy hitters in technology to win a contract with Microsoft for its global greenhouse gas management and reporting to stakeholders.

And it’s thanked Australia’s tough regulatory and reporting regime on environmental metrics such as greenhouse gas emissions and energy efficiency for the competitive advantages that enabled the win.

Not least of the company’s win is the “audit grade” software that the compliance regime in Australia has encouraged the market to develop, in order to deal with the immensely complex reporting requirements relating to energy, water, waste and other environmental measures, CarbonSystems chief executive David Solsky said.

In the three year contract with Microsoft, the global technology giant will implement CarbonSystems’ cloud based Enterprise Sustainability Platform across its global operations in 640 facilities in 110 countries.

CarbonSystems was selected by tender from an international field that includes competitors such as the leading US Hara, backed by Kleiner Perkins, and C3, whose directors include former Secretary of State Condoleezza Rice.

Mr Solsky said his company was able to win the work at least partly because Australia’s National Greenhouse and Energy Reporting, or NGERS regime and the national compliance landscape in general had stimulated competitive audit-grade software that could be used for regulatory reporting.

This compared favourably with voluntary regimes that were not as rigorous or contained a mix of reporting metrics.

Much of the information supplied in voluntary regimes was often in spreadsheet form, subject to a variety of measures, and human error. Information was typically supplied in terms of litres of water saved, tonnes of waste reduced or recycled or kilowatts of energy saved, Mr Solsky said.

A cloud based “enterprise” system, such as the Enterprise Sustainability Platform enabled rapid streamlined data capture from source, he said.

Automation of input data also reduced the potential for error, providing a system that could be treated as “audit grade,” he said.

“Our platform removes the potential for human error and captures the information [such as energy use] at source,” Mr Solsky said.

“There is an automated audit trail and if someone touches the data, you can see who touched it, where and when.”

A carbon tax would further sharpen the reporting framework, Mr Solsky said.

The Australian marketplace has been the growth engine for our company’s global expansion, driven by legislative requirements to track, measure and report energy and greenhouse gas emissions.

“We expect the impending carbon tax to further drive more accountability and innovation as organisations look to technology like ours to find efficiencies that drive lower energy use and carbon emissions.

“I think what impressed Microsoft most was the maturity of the platform … some of the advanced features and functionality that a lot of our competitors are talking about but haven’t been able to demonstrate,” he said.

CarbonSystems currently has just over 50 staff with offices in Sydney, New York, London and Singapore but South Africa was the “hottest market in the world” Mr Solsky said, because its stock exchange requires that all listed companies have integrated reporting, which combines financial, environmental and social performance.

Mr Solsky’s background includes a decade in data bank technology and in corporate finance and assurance with PricewaterhouseCoopers. Co-principals include Andrew Lamble who also has an accounting background, with PWC and Ernst &Young, and Bill Clasquin whose background is in IT development across a range of sectors.

The Enterprise Sustainability Platform
According to CarbonSystems its Enterprise Sustainability Platform is a cloud-based data management engine that allows global electronic data interchange with internal systems and third party suppliers. Benefits to Microsoft, include:

  • Automated energy and sustainability data collection to support commercial data processing reporting
  • Cutting the time and cost of managing corporate environmental information by automating the capture and tracking of energy, water and other environmental data from utilities and third party suppliers.
  • Providing up to date, auditable business and compliance reports via dashboards summarising energy, emissions and other environmental data.
  • Informing efficiency and cost-saving decisions by providing a wide range of environmental performance analytics such as benchmarking, forecasting and marginal abatement cost analysis tools.
  • Verifying the impacts, return on investment and payback from efficiency initiatives.

Microsoft’s chief environmental strategist Rob Bernard said: “Microsoft is committed to measuring, transparently reporting, and minimising the carbon footprint of our operations.

“Deployment of CarbonSystems’ ESP application will allow Microsoft to track key environmental indicators and performance across its portfolio of real estate and data centre assets. This will enable the company to accurately assess the impact, payback period and return on investment of its efficiency initiatives in the built environment.”

Chief executive officer, David Metcalfe of analyst firm Verdantix said: “Microsoft’s adoption of a single software platform to manage its sustainability performance underscores a global trend to standardise the capture and management of disparate non-financial data such as energy, emissions, and other environmental metrics.

“Many organisations struggle to capture and integrate sustainability data sourced from different localities as they strive for a single version of the truth.”

Data capture

David Solsky said: “The problem most organisations face in sustainability reporting is access to quality data. While most of the required data exists somewhere in the organisation, it’s typically non financial and unstructured in nature.

“Organisations have traditionally managed their sustainability data on spreadsheets, but they are rapidly recognising that this is no longer feasible due to the size and complexity of the data sets. Other challenges include human error, the time and cost involved to aggregate and report data, and risk of data loss.

“Increasingly, sustainability data is simply not meeting the standards expected by auditors for public disclosure.

At the heart of ESP is a sophisticated global data management engine underpinned by a universal carbon emissions calculation model and interval metering platform. The global data management engine enables robust, flexible electronic data interchange with internal business systems including ERP systems, building management and metering systems, and third party suppliers, such as utilities, airlines and credit card companies.”