Earlier this month heralded the formal launch of “Carbon Information Management” (CIM) software from Planet Metrics, a Northern California based company that has been brewing this “web-based, multi-dimensional software that helps organizations to create and deploy innovative sustainability strategies” since early 2007.
Unlike Environmental Health and Sustainability (EH&S) software, such as the enterprise wide solutions offered by market leaders in that space such as ESS, CIM software focuses on helping enterprises assess the total carbon footprint of their products and processes. As such, CIM offers an important analytical tool to help companies move towards clean and sustainable operations that is very distinct from EH&S solutions. Like ESS, Planet Metrics appears to be the furthest along towards delivering a comprehensive solution in their space, although they do get competition from products offered by Carbon View and Clear Standards.
What differentiates Planet Metrics, according to CEO Andy Leventhal, is that the competition focuses on helping companies do carbon accounting and data collection, but they don’t have the ability to model carbon data, performing what-ifs, nor do they have the rich database of stored life cycle analysis (LCA) assessments. Also unique with Planet Metrics is how they have integrated over 4,500 LCA’s with an Economic Input/Output (EIO) model they licensed from Carnegie Mellon. With this continuously updated and expanded LCA/EIO engine, Planet Metrics has added a carbon assessment feature, allowing companies using their software to rapidly estimate the carbon impact of their operations.
As Leventhal emphasized, this tool allows companies to look at virtually every facet of their operation from a carbon impact perspective, from the supply chain and product design to the packaging, logistics and waste streams. “We want to help companies understand that carbon is an aspect of everything they do, letting them see ‘what’s inside what’s inside’ [from a carbon perspective]; how they can innovate with their suppliers to reduce their impact.”
Planet Metrics sees their customer base as the global Fortune 5000 companies. In addition to already working with several undisclosed major clients, they recently performed a carbon impact assessment for the massive Consumer Electronics show recently held in Las Vegas, where over 140,000 people attended from all over the world. “We would like to be recognized as the preeminent provider of software to help companies understand the emissions associated with what they’re making and what they’re moving,” said Leventhal, “we want to be used by sustainability teams, supply chain teams, designers; anyone doing deep investigations of where their carbon is being consumed in a carbon constrained environment.”
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PLANET METRICS RAPID CARBON MODELING APPROACH
|The Planet Metrics modeling solution leverages a company’s data in
combination with their CIM database, including life cycle inventories,
Carnegie Mellon’s EIO-LCA data model, governmental statistics, and
other studies to generate a customer-specific emissions profile.
(Source: Planet Metrics)
The connection between carbon consumption and cost efficiency is not one-to-one, although as long as the cost of fossil fuel remains high the correlation is pretty strong. From that perspective, an analytical tool that can enable a company to identify areas where their carbon consumption efficiency can be improved will pay for itself in short order – regardless of the benefits of managing possible externalities relating to carbon emissions. As their website states: “Reduction of fuel or energy consumption will result in savings regardless of the regulatory status of carbon.”
Now that the price of fossil fuel has returned to earth, at least for a while, the correlation between carbon intensity and cost savings may not be as compelling. Imagine a company deciding whether or not to source a product with a high embodied electricity content (a photovotaic panel, for example). If this company is located somewhere in the intermountain region of the U.S., midway between a supplier in California and a supplier in Kentucky, and the price of the product is tied to the cost of electricity in each of those states, then they may find very little connection between carbon intensity and product cost. Electricity in California, worst case using natural gas, creates about 1.3 pounds of CO2 per kilowatt-hour, and costs on average about $0.115 per kilowatt-hour. Electricity if Kentucky, presumably using coal, creates about 2.0 pounds of CO2 per kilowatt-hour, but only costs $0.046 per kilowatt-hour; 50% more CO2 emissions, but less than 50% the cost. (Sources: For CO2/kWh, ref. this DOE page, table 1, “CO2 Emissions for Electricity in the U.S.,” for $/kWh, ref. the Electricity Costs table from CoalEducation.org.) Because of the recent, rather precipitous correction in the price of conventional fuels, the connection between economic factors and environmental sustainability factors is not as strong as when the price of fossil fuel was dramatically higher than it is today.
Nonetheless, adopting and mastering tools such as the CIM software available from Planet Metrics is in the interests of large companies, since increasing regulations regarding carbon intensity and carbon consumption appear to be inevitable. And inevitably the price for fossil fuels will rise again. Perhaps the biggest challenge to using Planet Metrics software is simply the vast and highly subjective nature of both the underlying data and the connecting logic. Accurately assessing the actual life-cycle carbon intensity of an entire supply chain can, ultimately, requires assessing and selectively connecting an infinite amount of often uncertain data. In this regard, CIM software might be compared to other models that attempt to grapple with infinite and uncertain data, from global climate simulations to hedge fund risk analysis tools to the Black-Scholes stock option pricing models. But in all these cases, the futility of achieving perfect accuracy should not deter the user from recognizing the utility of these models along with their limitations, and hopefully obtaining practical results.
Planet Metrics is backed by angel investors as well as the premier venture capital firm Draper Fisher Jurvetson, and to-date has a total equity investment of $2.3 million.