The number of large companies buying software to aid in their sustainability tracking and reporting in the last two years is “considerably lower” than earlier estimates and, while the market will continue to grow, it will be at a slower rate than previously expected, according to research by Groom Energy.
The last 24 months saw more than 600 large corporations including American Airlines, Adidas, Microsoft and Volkswagen Group make such software purchases, according to The 2013 Buyers’ Guide for Enterprise Carbon Accounting and Sustainability Software. In 2009 just 50 large companies made such purchases, the report says.
However, Groom says the figures for 2011 and 2012 are “considerably lower” than projections in its last report. In the 2011 edition of the report, released in February that year, Groom forecast 600 purchases by large companies in 2011 alone and around 1,500 such purchases in 2012.
The company has also downgraded its predictions for future growth. Groom now estimates that around 450 large firms will buy such enterprise carbon accounting software in 2013, with that figure rising to 540 in 2014.
The slowing in growth is due to a “lack of pressing legislative changes, flat energy prices and absence of public pressure about climate change,” Groom says.
In the past few years the dominant factors driving the purchase of such products have remained constant, Groom says. In ranked order, they are:
1. Requests from top customers for annual environmental data,
including programs like the Walmart Supplier Assessment Program.
2. A desire to enhance company image and increase brand loyalty.
3. Cost savings from improved energy management.
The evolution of the ECA market has driven vendor consolidation and a shift in feature priorities. The largest vendors are broadening their offerings through acquisition while venture capital investment for new players has dropped significantly, Groom says.
The report analyzes 75 vendors and profiles 27 of them. It also names CarbonSystems, CA Technologies, Credit360, Enablon, and PE International as the top 2013 ECA market leaders.