President-elect Obama’s address to the Governors’ Global Climate Summit this week sent a message that signaled that the incoming U.S. administration will make climate change a major priority. That’s not a huge surprise.

The surprise development occurred earlier today when Rep. Henry Waxman was elected chairman of the U.S. House of Representatives’ Committee on Energy and Commerce, unseating his longtime colleague Rep. John Dingell during a closed-door session of the House majority caucus. That was a significant action because Waxman has long been a vocal proponent of U.S. federal agencies, specifically the Environmental Protection Agency, taking a more proactive role in regulating greenhouse gas emissions. Dingell championed the interests of major American car companies, which generally opposed aggressive emissions legislation.

No matter what your political preference, it’s now a well-established fact that U.S supporters of greenhouse gas legislation, and emissions management in general, got a boost from two committed climate change intervention advocates ascending to positions of authority. Both events immediately signal that American emissions regulation will be more activist in nature, starting in early 2009.

If your business has put off implementing processes that address the reality of a carbon-constrained environment for manufacturing, you might want to rethink your position. Your company’s legislative affairs staff is probably preparing recommendations that will detail the implications to your operations. Allow me to provide a concise summary: There’s just been a seismic shift in the U.S. regulatory landscape for emissions management. Both the new president and legislative leaders have indicated that the current economic slowdown won’t affect their efforts to pass climate change legislation next year. And, apparently, the winds of political change are blowing in their favor.

The 451Group’s report is one of the more extensive analyst evaluations of ESS. While the report is only available to subscribers, it has lots of information that is worth sharing, including comments like:

• “ESS appears to be thriving…”
• “Because this is still an early-stage market, it is difficult to assess where this puts ESS in terms of market share, but the company is clearly established as a leading supplier in this growing sector.”
• “To date, ESS has sold …to specialist environmental health and safety managers in companies with a strong interest in environmental management, such as manufacturers. Many are interested in the entire, integrated suite.”
• “ESS is selling its Carbon Management Solution as a standalone software product, or as part of its environmental management suite, a 23-module product spanning most key aspects of sustainability management.”
• “The company is making good use of partnerships. It has signed a partnership deal with Oracle… to provide the carbon management capabilities that Oracle does not as yet have. ESS has similar initiatives with SAP, Microsoft and IBM.”

Why is this important? Our leadership team has positioned the company to meet the growing demands of businesses that are besieged by local, national and international mandates for sustainability reporting, including GHG/carbon management, health & safety management, crisis management, environmental compliance and corporate responsibility reporting.

Our approach has enabled companies to conduct all of their compliance activities on a single software platform, which can reduce operational costs and risks. Our efforts, in large measure, have been well received in the marketplace. It’s good to see that industry observers like The 451 Group, Gartner and AMR Research, recognize our efforts, too.

E+Co is a 15-year-old nonprofit investment company started as a result of a Rockefeller Foundation study on opportunities for developing clean energy businesses in developing nations. It provides business support services and capital to clean energy businesses in Africa, Asia, Europe and Latin America and the United States.

E+Co also assists clean energy businesses with the aggregation, validation, verification and creation of high quality GHG offsets, including those that will be sold to Goldman Sachs. The carbon financing provides the enterprises with additional capital that supports, sustains and helps clean energy ventures grow.

Goldman has made a big bet on the growth of the U.S. carbon offset market and on the continuing pressure to do something about climate change issues. Small-scale clean energy projects, while supporting important social and environmental benefits, can struggle to attract sufficient capital to assure success. The financial backing and business development services provided by E+Co assists small businesses in those developing nations to supply clean and affordable energy to those regions, efforts that simultaneously increase employment opportunities and reduce greenhouse gas (GHG) emissions.

Goldman’s move is just another subtle reminder that smart companies are preparing now for the advent of a U.S. carbon trading market. Even though companies must exercise prudence in order to survive this market correction, executives must be mindful that failure to address both current and future market shifts will put your organization at a competitive disadvantage.

We anticipate the mounting wave of clean energy activity will generate greater pressure for companies of all sizes to measure and monitor their GHG emissions and acquire those carbon credits Goldman Sachs will help E+Co create.

During a keynote speech at the Microsoft Professional Developers Conference 2008 (PDC2008), Ray Ozzie, Microsoft Corp.’s chief software architect, announced Windows Azure, the cloud-based service foundation underlying its Azure Services Platform. The presentation highlighted this platform’s role in delivering Microsoft’s software plus services approach to computing.

The Azure Services Platform is an industry-leading move by Microsoft to help developers build the next generation of applications that will span from the cloud to the enterprise datacenter and deliver compelling new experiences across the PC, Web and phone.

Our Microsoft Gold development certification (we also have Powered by SAP NetWeaver® and Oracle development partnerships) enabled ESS to send our chief software architect to PDC2008, giving him a chance to try out Azure’s features and functions and evaluate the platform for our own future development.

Microsoft says the Azure Services Platform promises to transform the way businesses operate and how users access their information and experience the Web. Most importantly, it provides the power of choice to deploy applications in cloud-based Internet services, through on-premise servers or to combine them in any way that makes the most sense for your business needs.

Unlike many of today’s service-based solutions, the Azure Services Platform provides developers with the flexibility and ability to create applications while taking advantage of its existing skills, tools and technologies such as the Microsoft .NET Framework and Visual Studio.

New services technologies, when employed alongside other core technology enablers such as virtualization and modeling, could result in dramatic benefits for customers’ IT departments. Specifically, these technologies enable IT departments to further drive down operating costs, focus their spending on systems that differentiate the business and ultimately enable IT to become a more strategic asset.

I am pleased that ESS continues to be at the forefront of technology innovations that offer the potential to provide new benefits to our customers including those mentioned above. You can be assured that the software development and product management teams at ESS are evaluating these new technologies carefully against our product solution roadmaps for the company’s GHG and carbon management, environmental compliance, health & safety, corporate responsibility reporting and crisis management software solutions.

First of all, there is now a widely-accepted framework for sustainability reports created by the Global Reporting Initiative (GRI) that enables the reader, or investor, to compare common data. GRI guidelines call for measurement and monitoring. Now in its third generation, companies have had a chance to get comfortable with them and stakeholder input has made the process much more user-friendly.

Nearly 200 leading global organizations comply with GRI guidelines, and that number is expected to grow rapidly. GRI compliance is “voluntary,” but it’s really not. You get the drift. Your company’s investor relations and corporate communications people already know that investors and customers are closely examining these reports…or the lack thereof.

The important takeaway about GRI guidelines is that it drives companies to watch what they’re doing in relation to their footprint, collect data about it and make that data transparent. Exactly how does a particular company emit greenhouse gasses? Through its product? Through its manufacturing process? Can that process be changed? Can equipment be retrofitted, or new equipment purchased that is more energy efficient? Answers to those questions are now available for public examination.

I’m going to guess that many corporate executives were only summarily aware of their unsustainable operating processes or the non-sustainable ingredients in their products, before that information became accessible for public viewing. It’s possible that decision makers at the head of the enterprise were not getting accurate, adequate and actionable data from their facilities. Furthermore, the data, and its implications, were difficult to comprehend. Once executives became aware of the implications of the data, they demanded appropriate action, as did their stakeholders.

In every report I’ve read, companies have reduced emissions and waste since they starting measuring. Almost all of them have set goals to continue on a more sustainable path. Some of them have established BHAGs (big, hairy audacious goals) like WalMart’s goal of zero waste, and equally ambitious target dates and accountability for executing them.

But here is something more important. Companies that execute on their sustainability goals are also reducing their operating costs. This is crucial because in business, at the end of the day, the goal is to reduce costs and make profits. Sustainability goals are not just nice, feel-good items; they’re necessary. Cutting costs, especially in these tough times, is a must.

He has called climate change “one of the greatest moral challenges of our generation,” and proposes cutting carbon emissions 80 percent by 2050 by implementing a cap-and-trade system.

Efforts to craft a more ambitious successor to the Kyoto Protocol, which expires in 2012, has been stalled by a standoff between the United States and developing nations. Obama — in his election manifesto, has pledged that his administration will take a more active role engaging with other nations to find climate change solutions.

In addition, Obama promised an “Apollo project” that will generate jobs and provide energy security through a new alternative energy economy.

“That’s going to be my number one priority when I get into office,” Obama has said of his “green recovery” plan. “We’ll invest $15 billion a year over the next decade in renewable energy, creating five million new green jobs that pay well, can’t be outsourced and help end our dependence on foreign oil.”

To marshal support for his plan, Obama argues that investment in renewables will create a significant number of new jobs. He also emphasizes that energy efficiency is linked to national security, weaning the U.S. away from imported fossil fuels.

The process of putting a new administration in place while securing support for emissions curbs isn’t going to be easy — especially when millions of Americans are worried how the plan will impact the nation’s sick economy. Then there is the mammoth challenge of getting a carbon emissions bill through Congress – not expected until 2010 at the earliest. We’ll be watching closely as the incoming president’s new direction takes shape.

Increased demand for water and electricity is driving plans for expanded power generation and treatment plants, which are likely to drive higher utility costs. However, what alternatives are available if there’s no money to build new power plants or water desalinization facilities? It’s time for the enterprise to harness its collective ingenuity to develop improved resource management practices.

As a result, a growing number of companies are looking to save money by minimizing use of water and electric utilities. I got this idea from an article in Scientific American that shows how water and energy management are interconnected. Communities need water to produce electricity, which is needed to treat water.

The article says communities need to solve both of these problems at the same time. More businesses are contributing to the solution by developing programs that emphasize better resource stewardship.

Investing in EHS technology can empower your company to improve energy efficiency by cutting waste. EHS software can pay for itself in lower energy costs and lower compliance costs and risks. Companies would reap immediate ROI, improve environmental performance plus help defer the need for new utility plants, pushing potential cost increases further into the future.

Which leads me to another timely adage: You can’t manage what you can’t measure. Companies can’t efficiently manage their resources unless they have accurate and actionable information from an EHS software platform.

According to the study, Herman Miller has reduced landfill waste by 80 percent, hazardous waste by 91 percent, overall emissions by 87 percent and water usage by 67 percent. During the same period, sales doubled to more than $2 billion.

Herman Miller has maintained sustainable business practices for more than 50 years. It has been known for its audacious environmental goals and for transforming its organization, design, manufacturing processes, marketing materials and customer relationships.

The company uses techniques such as lean manufacturing and the Cradle to Cradle Design Protocol to reduce costs and improve overall manufacturing efficiency. It is aiming to be carbon-neutral by 2020.

Herman Miller’s CEO Brian Walker recommends that companies wanting to green their supply chains should design products with sustainability as a core principle, put the goals on paper and embrace transparency and meaningful metrics that can be efficiently measured and communicated to stakeholders and investors.

This is an example of how companies can leverage EHS management to improve performance and generate measurable benefits. In this case, Herman Miller identified process improvements that enabled the company to meet its sustainability goals, increase operational efficiency and earn a solid return on investment. It’s a reminder that EHS management is no longer just about compliance.

This development could even drive a new trend that combines standard financial data with sustainability data in a single annual report. A handful of companies already do this, according to CFO. Eric Israel, a managing director at KPMG, believes more will follow.

“There is a serious need for IT support to make this happen,” Israel says. “It’s missing now, but as expectations change and sustainability reporting becomes less about PR and more about satisfying investors’ need for data, more automation will become essential.”

Half of the S&P 500 released Corporate Social Responsibility reports last year, according to SIRAN, the Sustainable Investment Research Analyst Network.

Corporate decision makers would be well advised to consider making investments in CSR information management software now. The pressure is on. Companies that delay will find they are unprepared when CFOs will be accountable for CSR reporting in the future.

Companies like industry leaders Intel and John Deere are examples of organizations participating in the National Environmental Performance Track program. Sponsored by the U.S. Environmental Protection Agency (EPA), the Performance Track competition encourages organizations to develop programs that reduce emissions is excess of EPA-regulated limits for air, water and land pollution. For example, another noteworthy participant, the City of Dallas, has pledged to reduce water consumption at city-operated sites by 49 million gallons over 3 years, a 5 percent reduction.

Performance Track participants are encouraged to develop measurable emissions reduction goals that drive improvements to air, water and land quality. Since the program launch in 2000, more than 500 Performance Track member organizations have established in excess of 4,000 goals, resulting in a reduction of 310,000 metric tons of GHG emissions, 13,000 tons of nitrogen oxide and 52,000 tons of hazardous waste from being released into the environment.

Your organization still has a few more days to submit a 2008 Performance Track application. If your organization or government entity would like to join the competition, applications will be accepted through October 31. Members can obtain annual performance reports and renewal applications starting February 1, 2009. Submission deadline is April 1.

Needless to say, ESS can help Performance Track participants monitor progress against EPA and corporate benchmarks. ESS’ integrated EHS platform and powerful software tools, including our Environmental Compliance and GHG/Carbon Management solutions, help organizations streamline collection, processing and communicating emissions information to reduce complexities and risks and costs associated with generating both mandatory and voluntary reports.