Information Systems for Environmental Sustainability

IT, Resource Productivity, Environmental Preservation, and the Fourth Industrial Revolution

IDG: “Is ERP Ready for Corporate Social Responsibility?”

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IDG asks a good question. Another one is: “Is CSR ready for ERP?” From the article:

We are entering an era where corporate social responsibility (CSR) is of central concern to executives of almost every enterprise. With the publication of ISO 26000, a standard for CSR based on the UN Global Compact, executives now have a reliable blueprint for action. But to what extent is enterprise technology up to the task of documenting CSR initiatives?

In the standard, businesses are asked to take a precautionary approach to protecting the environment, to promote greater environmental responsibility and encourage environmentally-friendly technologies. Identifying and implementing enterprise technology that will allow for efficient environmental management has been a challenge for many industrial companies because a vanishingly small number of ERP products offer environmental footprint management functionality as a built-in module.

I’m not sure I agree here… any data to back this up? It would be good to know, either way.

Without this functionality, it becomes necessary to purchase third-party products that typically deal only with carbon emissions rather than the full spectrum of air, water, landfill, product lifecycles and end-of-life impacts. These third -party products must then be either integrated with an ERP package or run in stand-alone fashion — forcing a company to absorb often unacceptable costs not only from the software licensing but systems integration and/or duplicate administrative effort resulting from maintaining information in two separate systems.

Ideally, an ERP package should support ISO 26000 by providing, within the ERP suite itself, a configurable tool for capturing data on the entire spectrum of environmental impacts. This would allow, for instance, a company doing substantial electronics business in Europe to focus on the substances covered in Registration, Evaluation, Authorization of CHemicals (REACH), Waste Electrical and Electronic Equipment (WEEE) and Reduction of Hazardous Substances (RoHS) regulations. A capital equipment manufacturer could focus on the lifecycle environmental impact of their long-lived product, along with decommissioning costs. A company with an extensive supply chain could focus on decision support for selecting vendors based on proximity.

Environmental footprint management built into ERP also streamlines reporting, and provides for a more direct and credible source of information because tampering is harder to accomplish given the preventive and detective controls within a modern ERP system.

Author: nigelpm

Associate Professor of Information Systems, Stephen M. Ross School of Business, University of Michigan - Helping organizations to navigate digital transformation.

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