Information Systems for Environmental Sustainability

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

Carbon Mgmt. Software: The Next Big Thing?

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I’ve been writing about CMS for some time now, both in terms of its value-add potential as well as the practical barriers that may limit effective implementation.

Christopher Mines writes on that enterprise carbon and energy management systems adoption is being driven by the following managerial objectives:

  1. Improve operational efficiency. Reducing energy consumption and related emissions requires running company operations more efficiently. Very simply, lower energy consumption means lower energy bills either per unit of output (relative terms) or in total (absolute terms).
  2. Communicate business metrics to stakeholders. A company’s carbon footprint, reduction targets, and progress toward those targets are becoming standard business metrics that the firm must regularly communicate to constituencies including customers, shareholders, employees, and regulators.
  3. Differentiate operations, product, and brand. Progressive companies have seized on carbon management and aggressive reductions in emissions as a central element of their brand positioning with consumers.
  4. Comply with regulatory mandates. Governments around the world are stepping in to regulate where business and customer pressure is not sufficient to encourage corporations to act on carbon emissions. So large companies — especially heavy-emitters — are facing implementation in 2010 and 2011 of regimes like the UK’s Carbon Reduction Commitment (CRC) and regulation from the US Environmental Protection Agency (EPA) under the aegis of the Clean Air Act.
  5. Mitigate the business risks of climate change. Companies are increasingly cognizant of the material business risks that a changing climate will cause (for example, disruption of raw materials supply) and incorporating such risk assessments into their planning and investment plans. In the U.S., for example, the Securities and Exchange Commission (SEC) now requires companies to include assessment of climate change risks in their financial reporting.

OK, that’s pretty straightforward. It’s easy for managers to list “wish list” items for the latest software offering.

Chris uses the slide below to illustrate growing interest in CMS based on a survey of IT professionals:

I wonder how environmental professionals would answer this question? After all, they are a primary business group that will be affected by implementing CMS.

Managers would be wise to think about not only their wish lists, but also the costs, feasible benefits, and risks involved. For example, how will vendor selection take place? What are the primary goals of the new system and who will manage it? Where will the resources come from and who will conduct the cost-benefit analysis? Who will design new work practices and processes to leverage the new software (anything can be “baked in” to new software apps, but workers will ultimately do what’s best for them and use workarounds when needed).

I’m cautiously optimistic about the role of CMS in transforming environmental sustainability:

Time and again the results of IT interventions do not turn out as planned. Sometimes, the unexpected results are pleasant surprises, as when organizations discover valuable new uses for data collected by their information systems. Other times, the unexpected outcomes are
negative – devastating ‘technical’ problems leading to inaccurate data, botched transactions, operational nightmares, and even security breaches and fraud. Hoped-for benefits may fail to materialize. Benefits may be realized, but accompanying them are negative social consequences such as stress and overload, depersonalization or reduction in organizational commitment, and deterioration in organizational culture. How much greater would the organizational benefits of IT use be if we could reduce the disappointment of negative outcomes and fully exploit the potential of unexpected benefits?

Source: Markus, M. L. and Robey, D. 2004, ‘Why Stuff Happens: Explaining the Unintended Consequences of Using Information Technology’, in The Past and Future of Information Systems, Elsevier Butterworth-Heinemann, Amsterdam.



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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