Climate change and software.

I’d like to move the discussion on GRC away from the section 404 of the the Sarbanes Act of 2002 on to something more important. When the coast is clear I’ll probably return to the PCAOB As5 standard, that is, if I have any readers left. Today SAP announced it is joining the 3C initiative to combat climate change. This is serious stuff. I’ve just read the 9 principles

1. A switch-over to a low emitting economy is a necessity

2. A global solution is needed

3. A common, global goal limiting climate changes is needed

4. Greenhouse gas emissions must have a global price

5. A well laid-out combination of short- and long-term actions is needed

6. No options should be excluded

7. A global emissions market is needed

8. The developed countries must lead the way and the developing countries should follow as soon as they are able

9. Fair and sustainable global burden-sharing must be reached

Seems logical and sensible to me.

It is also good to see the German Government taking a firm line on the climate issues for the G8 meeting. 

I’m convinced that companies that take climate issues seriously will have a longer term advantage over those who don’t. Consumers are taking environmental and social issues seriously and will factor them into their buying decisions. I do, as do most of my friends. Increasingly, investors are also reflecting sustainability into their investment portfolios. Have a look at FTSE for good, for instance.

The FTSE4Good Index Series has been designed to measure the performance of companies that meet globally recognised corporate responsibility standards, and to facilitate investment in those companies. Transparent management and criteria alongside the FTSE brand make FTSE4Good the index of choice for the creation of Socially Responsible Investment products.

This means that the burden on companies to analyse, report and manage issues beyond traditional financial reporting will grow. Investors are beginning to demand a far higher level of transparency, this will require systems support.

I was speaking to a friend of mine recently. He explained that some supermarkets are planning to trial carbon emissions on product labelling. This would enable you to look at compare products based not only on price and sugar levels, but also on their environmental impact. This has significant supply chain implications. Before you laugh, remember that only a few years ago, organic produce was a tiny portion of supermarket sales.

SAP’s software solution for sustainability will be moving into rampup shortly, so I’ll be watching this closely. I’ve blogged before on SFDC carbon-neutral position and Lawson’s efforts, so SAP is not alone in taking this seriously.

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