Europe's largest software company cashes in on greening of global business

SAP snaps up US start-up that helps firms reduce carbon footprint

Richard Wray
guardian.co.uk, Monday 11 May 2009 19.14 BST

SAP, Europe's largest software company, is looking to capitalise on the "greening" of global business by snapping up a US start-up that enables companies to measure their carbon footprint and reduce greenhouse gas emissions.
The German company's acquisition of Clear Standards, which only started selling its software a few months ago, comes as regulators on both sides of the Atlantic are pushing for companies to monitor their environmental impact more closely.
SAP, which counts some of the biggest names in business among users of its enterprise software, reckons its 86,000 global customers are responsible for about five gigatonnes – or 5m tonnes – of the estimated global human greenhouse gas footprint of 30Gt a year.
"Our customers, combined, have a carbon footprint that is about one-sixth of the world's total man-made carbon emissions," explained Peter Graf, SAP's chief sustainability officer and executive vice president of sustainability solutions. "That shows you what an incredible lever SAP holds. Even if we can only improve the emissions of our customers by a percentage or two... we can have a huge impact."
Privately-owned Clear Standards, which only employs 30 people, has developed software that allows companies to measure their environmental impact, including greenhouse gas emissions, water consumption and waste.
Some of its customers – such as Coca-Cola, solar energy group Sunpower and Starwood Hotels – are concerned about their brand image and use the software to improve their environmental record, while others are increasingly having to measure their impact because of tightening regulation.
Many businesses in Europe, such as those involved in heavy industry or power generation, already have to track their impact because they fall under the EU's emissions trading rules. In the US, meanwhile, companies in the utility, oil and gas and some manufacturing sectors will be mandated to measure and report their carbon footprint from January next year.
"We have been amazed by the activity of major corporations who are very eager to have a product that works and allows them to measure their energy," said Clear Standards' chairman and chief executive Betsy Atkins. "We have an enormous amount of expertise in how you measure all of your energy, how that computes to a carbon footprint, and how you can be more efficient and save money by finding energy wastage as well as use more sustainable types of energy such as solar."
As well as improving SAP's green image, the acquisition of Clear Standards gives it a foothold in a potentially highly lucrative market. Independent IT expert AMR Research estimates that the US market for measurement and reporting of carbon footprints is worth about $3.6bn and growing at 30% a year.
The price tag for Clear Standards, which is backed by American venture capitalists Kinetic Ventures and Novak Biddle Venture Partners, was not revealed.