• Technology
  • CFO Magazine

Green Counters


As a company that sells playground equipment to publicly funded parks and schools, Playworld Systems risks any number of nasty falls. It has to worry not only about governmental agencies that try to protect children from toxic materials but also about community groups that are increasingly using their purchasing power to push eco-friendly agendas. So the company decided that it needed a system to analyze all the carbon impacts of its business, whether produced internally or generated in source materials such as steel, plastic, and aluminum parts. The goal of the effort was to measure the reduction in carbon footprint the company could achieve by replacing carbon-intensive components such as those made from PVC (which it has, in fact, done).

With 75,000 parts needed to make its colorful playground solutions, “greening” the entire Playworld product line could have been a massive project, says Steven Malriat, the company’s chief operating officer and CFO. But Malriat found what he calls a credible and “quickly achievable” solution: Climate Earth, a carbon-accounting system that calculates an enterprisewide carbon footprint from a company’s internal operations and the commodities it buys from upstream suppliers. “Every dollar of material you buy equals a certain amount of carbon emissions,” Malriat says. “It’s like having a second set of books.”

Carbon emissions loom as an accounting issue not only for companies that deal with government agencies or green-minded civic organizations, of course. The push for a cap-and-trade system is gaining steam in Washington, and in April the Environmental Protection Agency said greenhouse gases contribute to global warming and threaten public health, a stance that could open the door to further limiting carbon emissions under the Clean Air Act. A public comment period is under way, “but it’s only a matter of time before companies have to report,” says Simon Mingay, global research lead in environmentally sustainable IT at consulting firm Gartner. “Our advice is to start now, save a lot of time and hassle, and do it properly and well.”

Software makers are already taking various stabs at developing useful products, but the task is far from easy. Measuring how much carbon is emitted by, for example, consuming a given amount of heating oil is relatively straightforward, but figuring out how much total carbon goes into the production of a widget or service is not. Many believe it can’t be done accurately without exhaustive data collection from suppliers. And current debates over which party should get how much credit for various emissions-reducing activities will surely intensify once actual data must be entered into actual systems.

U.S. companies planning to implement carbon reporting and management software in the next 18 months

First Stages

To date, companies have not rushed to implement systems that can support such tasks: among U.S. companies, only 16% have such IT tools, according to a recent Gartner survey, and even in the United Kingdom, where a mandatory cap-and-trade scheme takes effect next year, only 17% have them.

