EHS - it's so green

Environment, Health and Safety

First of all, the term up front: EHS is the abbreviation for Environment, Health and Safety, i.e. environment, health and safety within (and as you will see, also outside) a company. Traditionally, our clients have been well-positioned when it comes to issues such as occupational health, safety and health aspects of their employees. Relatively new is systemic advocacy for issues that affect a company's environmental footprint. More and more RFPs are coming out asking questions about EHS and increasingly ranking them higher. Such metrics are also increasingly a benchmark for interested employees and potential job applicants.

What we see today with many customers as the basis for their data outside of ERP is - who would be surprised - good old Excel. As the importance and volume of data increases, dedicated EHS solutions are increasingly used. These solutions bring many important reports, the workflows are tailored to EHS requirements and they include relevant interfaces. Auditing is also easier because the results are determined transparently.

One example of the increasing complexity: As early as 2011, the Greenhouse Gas Protocol developed and published a standard for CO₂ accounting. In the GHG Protocol (GHG = greenhouse gas), emissions are divided into three scopes, only one of which, Scope 1, directly covers the company. When companies report according to this protocol, a lot of data is needed from suppliers, which requires good preparatory work and a suitable system.

The areas we are talking about are Scope 1, Scope 2 and Scope 3. Scope 1 stands for all direct emissions that originate from activities of a company and the subsidiary organizations assigned to them. These are all areas such as production, own transport, storage, the company fleet (including company cars) and own infrastructure such as buildings. Scope 2 records the upstream indirect emissions that the company purchases. These are services such as electricity, heat and purchased goods and services in general. In addition, transport by third parties, business trips or even the waste produced. As you can see, it becomes more complex to obtain all the data. Tip: Consulting companies also fall under this heading in the context of their own production. When using SaaS solutions, it is also a question of factoring in these emissions. Do you know whether your provider uses green electricity? These are charged at a lower rate.

Final the Scope 3: Here, the downstream activities of a company are considered - i.e. the transport of the sold goods, the sale and the processing of the sold goods. In many areas such as IT, it is particularly important how the goods sold are dealt with at the end of their life cycle. Are they reprocessed, recycled or thrown away?

The inclined observer of the software market will also recognize that this is an important key market from the fact that many exciting start-ups in this environment have been taken over by large providers and are integrating the solutions into their portfolios. This trend is very likely to continue.

One vendor that specializes in researching solutions such as EHS is Verdantix, for example. In the recently published edition of its "Green Quadrant For Carbon Management Software 2022", the leading providers of precisely such solutions are examined and classified. It is interesting to note that no ERP providers appear among the manufacturers of the solutions examined. That these are very good at determining Scope 1 is clear. I assume that the permanent firing with the external data of Scope 2 and Scope 3 is actually better covered by a third-party solution.