Interview with Jeremy Fain from Verteego
We launched the Supply Chain Carbon Council at the end of 2007 and have seen a massive change in the business landscape in terms of emissions management over the last three years. What for you have been the main changes during this time and do you see a shift in acceptance from industry in terms of sustainable business practices?
Two years ago, some corporate decision makers didn’t still fully realize that environmental performance was becoming a key business issue. Things have changed fast with the occurrence of global events such as the Climate Change Conference in Copenhagen, which took place in December 2009. Even though no sound agreement on governance was struck in Copenhagen, people realized climate change was the only issue ever to gather all heads of all states at one location. I think this is a major achievement of the beginning of the twenty-first century, even if as of today it does remain unnoticed.
You are a leader within Verteego. When was the organization set up and how do you think your offering differentiates you from your competitors?
Verteego was set up in 2007 and launched its carbon management application in the beginning of 2009, after a period of heavy R&D investments. Our offer differentiates by being simpler to use, by being more flexible and interoperable, and by offering customers a better superior level of service at a lower total cost of ownership. Verteego Carbon also tackles both corporate carbon management issues and product or projet GHG footprinting, as well as embeds very powerful features to enable our customers to easily collect data from their suppliers and employees.
When did you personally identify Sustainability as a key competitive issue for companies?
In the 1990s, Nike’s reputation was put at stake when the company faced criticism for use of child labor in Cambodia. I then suddenly realized ethics had become a key purchasing and investment criterion. In the early 2000s, the Enron scandal proved me right.
What initiatives has Verteego introduced to reduce your own carbon footprint?
We at Verteego pay a lot of attention to our own home-work as well as professional commuting emissions – for instance, we use conference calls and online seminars a lot; we also make sure, back at the office, to sort waste, reuse consumables as much as we can, and spend as few electricity and water as we can. Also, we pay attention to the green performances of our hosting services providers: their carbon footprint has clearly become a key selection criterion. As far as our scope 3 emissions are concerned, there is no better way for Verteego to reduce its carbon footprint than to convince the largest possible number of organizations to subscribe to Verteego Carbon. We also make sure we evangelize everyone we meet about two key issues for our economies: global warming and fossil fuel dependence.
Carbon as an emitter has been a very useful measurement tool for organizations, when quantifying their environmental performance. Do you think that emissions management should be widened to include such resources as water?
I think carbon is key indicator because carbon incorporates a number of material flows such as energy, fixed assets, raw materials, waste … But you’re very right, carbon as the only environmental performance indicator is just not enough; depending on the industry or the geographical area considered, other environmental management indicators would be just as important if not a lot more. Consider waste and water on the African continent, or water in the Middle East or Australia. There is not best indicator unless there is a context.
We are very supportive of the application of ICT to the problem of tracking emissions through the supply chain. How important a role do you think the ICT industry can play in this field?
Rupert Schiessl, Verteego’s cofounder, and I are strong believers that Information Technology is a strong driver for better collaboration between organizations. And when it comes to managing GHG emissions, there is clearly no other option than to look at the broadest scope of emissions meaning what the GHG Protocol calls Scope 3. Scope 3 emissions include both supply chain emissions and use-of-products emissions. Our customers tell us Scope 3 emissions represent about two thirds of their overall emissions, so, as a pure player carbon management application vendor, Verteego clearly needed to do some troubleshooting here. This is why, to help our customers solve the supply chain data collection issue, Verteego Carbon came out with a very powerful form engine that enables our customers to very easily collect supplier data.
We have just launched the programme promoting the application of RFID/Wireless Sensing technologies to the problem of tracking carbon through the supply chain. For us the key to true product level carbon footprinting, with a label on all products that can be interrogated, is the application of RFID/Wireless Sensing to bring more visibility to supply chains and ultimately the end user/consumer. What are for you the first steps to realizing this goal by industry?
I have nothing against RFID or Wireless sensing, but I’m not quite sure technology in general is the best way to bring visibility to end-users. I think what consumers first need is transparency from brands and corporations. The World needs to regulate fast on having all GHG assessments audited as thoroughly as financial accounts. Verteego is fighting hard for compulsory GHG footprint verifications as well as for a law that would make all product companies accountable on the GHG emission factors of all their offers. We need to prepare for a carbon-constrained economy. The sooner, the better. And to properly answer your question, yes, coupling RFID/wireless sensing and carbon management applications to compute the most precise carbon evaluations would definitely make a lot of sense in any supply chain-intensive organization.
Do businesses that are successful in reducing their carbon footprint have a moral responsibility to other organisations, including competitors to share their knowledge of best practice in carbon emissions reduction?
I don’t think so unless we create a GHG performance market, such as there is a financial performance market with a legal obligation, not a moral obligation, to share results. Managing carbon emissions is just like managing financial performance: GHG performance can easily be turned into a very effective competitive advantage. Benchmarking matters, but only once in a while…The rest of the time, organizations are just competing against each other. Furthermore, benchmarking will remain a complex issue until there are clear guidelines on the scope of emissions that need to be reported. Financial accountants have their International Accounting Standards and Generally Accepted Accounting Principles. GHG accountants need the exact same tools to create most value for their organizations.
Aside from positive environmental impact, what are the spin-off benefits to an organisation in investing in emissions management initiatives?
Clearly, an organization that not only measures on a regular basis its GHG footprint but also makes sure it takes action to reduce its emissions, and says it out loud, will increase its top line. Everyday, corporate buyers and consumers take the GHG emissions criterion more seriously. Carbon management is an affordable, ethical way of winning more and more customers. Plus those customers will tend to be loyal customers since they’ll be buying from a would-be low-carbon vendor.
To end Jeremy, what are the three key pieces of advice you would offer to others in relation to their carbon management strategies?
First, climate change and fossil fuel addiction are strategic issues so make sure you have the top management team or the board of directors sit in a room and appoint a Vice-President of Carbon Management before anything. Second, don’t be shy or afraid of your numbers: look at Scope 3 emissions where you’ll fully leverage your carbon reduction actions, including by reducing energy costs and risks dramatically. Third, don’t listen to consultants who tell you that, when it comes to managing carbon emissions, a spreadsheet will do. I know I’m biased here, but hey, those of you who run their financial accounting on a spreadsheet please raise your hands? Keep in mind that your GHG intensity is slowly becoming as important as your sales margin.