Around the world, companies large and small are feeling pressure from socially responsible investors, conscious customers and government regulators to clean up their acts. The emerging sustainability software market promises to help them understand how to do that, with new tools that can help turn sustainability from a concept into a well-defined strategy.

The demand for transparency in businesses continues to grow. Initiatives such as the Carbon Disclosure Project, the Global Footprint Network and the Global Reporting Initiative offer tools such as surveys and reporting frameworks to collect data on corporate environmental performance and bring about a business environment of full disclosure. Forward-thinking business owners realize that it's more beneficial to understand and manage their company's ecological footprint than to try to conceal it.

While the need to collect new types of data, assess the relative environmental impact, and report it in a meaningful way can seem like a daunting task to companies struggling to stay afloat, to budding software startups, it is a worthy opponent. According to Chris Farinacci, CMO of Hara, one of the newest environmental software companies to emerge, tracking environmental performance could be the next logical evolution for software, where environmental resources become an asset in need of an efficient management system just as sophisticated as those used for finances, human resources and customer relations.

Image Source: Clear Standards Inc.

A report released last month indicated that there are at least 51 companies present in the emerging market dubbed Enterprise Carbon Accounting (ECA). These companies are launching both in anticipation of government legislation that will require reporting of greenhouse gas emissions and allow companies to trade carbon credits, and also based on the knowledge that companies currently lack the proper tools to gather, analyze and store this increasingly important data in an efficient way. Software products like SAP’s Carbon Impact (formerly Clear Standards) are able to monitor energy usage, waste and emissions across multinational companies and supply chains for the long term. Beyond streamlining the process, these software products can generate advanced visuals that help executives easily understand the projected benefits of adjusting their environmental practices.

Life Cycle Assessment (LCA) is another interesting concept finding its way into the field of software. While Okala existed for several years as a methodology for ecological product design, its adaptation as an online software program called Sustainable Minds (which Jeremy Faludi recently mentioned in his coverage of Greener By Design 2009) has magnified its accessibility and ease. In search of an accurate method to help produce more green products, Sustainable Minds CEO Terry Swack collaborated with Okala to create a program that allows industrial and product designers to see the impacts of their choice of materials during the critical conceptual stage of product design. The impacts are rated on a scale which considers greenhouse gas emissions, as well as nine other areas of environmental impact.

While we are just beginning to see the boundless opportunities for software to connect the dots in greening business, there are also many challenges ahead. One of the biggest of these is the lack of consistency in environmental regulation from state to state and country to country. As governments struggle to reach compromise on how to address climate change, multinational corporations must react in real time to meet requirements for emissions reporting and other standards which can be significantly diverse. With so many valuable metrics to consider, it can become a problem to agree which are the most important.

And of course, while software can allow companies to understand, measure and track the impacts of their products and practices, these programs are only as effective as the decision-makers who use them. While software engineers may be able to provide the tools to make more sustainable and transparent business possible, it is up to both the business community and a society of engaged, strategic consumers to ensure that the transformation really occurs.

Agnes Mazur is a sustainability enthusiast based in San Jose, California. After completing her studies in Political Science, Spanish, and French at San Jose State University, she worked as a reporter in her native city of Warsaw, Poland. She has since returned to the Bay Area where she contributes to various efforts in sustainability including organizing an urban gardening project, researching up-and-coming green businesses, and attending various conferences about environmental sustainability. She hopes her love of world travel, nature and innovation can help change the world.

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