Environmental software company Village Green Global Inc is joining the dash in the market to track carbon footprints, partnering with software giant Microsoft Corp to capture the business of cities and local governments.

Carbon tracking is a small but fast-growing market with companies like SAP AG and Johnson Controls Inc among those offering tools to monitor environmental impacts.

With the formation of Village Green's U.S. unit this year, company Chief Executive Doug Smith said it plans to take 40 percent of the U.S. market for carbon-tracking software and become the market leader.

There's no point being second, Smith told Reuters in an interview.

Village Green started in Victoria, Australia in 2002 as an environmental consultancy and has done work in Malaysia, Ireland and the Middle East. Now it is now honing in on the United States.

If you look at the U.S. alone in relation to stimulus funding in the clean tech sector, auditing is worth $2 (billion) to $5 billion, Smith said.

The privately held company plans to become the U.S. market leader within two to five years, Smith said. It has an office in Palo Alto, California and is building a staff of 250.

Village Green expects the industry to create 68,000 jobs for environmental auditors who work with the public sector.

TEAM WORK

With the partnership, Microsoft agents will offer Village Green's software as a carbon tracking tool to its public sector clients through its indirect sales model.

Smith said by working the public sector, Village Green can also reach small business communities.

Local government potentially (will be) picking up licenses for their business customers and they're providing the tools for their small businesses, so they can go online and do it for themselves, Smith said.

Village Green's tool, called SMARTWeb, tracks electricity use, water consumption, transportation, natural gas, waste and other factors to find ways to save energy and money.

Village Green's customers save an average of 15 to 20 percent on their energy consumption without spending any money, looking solely at how the staff uses the equipment in the building, Smith said.

Two main factors driving the U.S. market are corporate social responsibility and government policy, Smith said.

A recent study by Groom Energy Solutions, a U.S. firm that helps companies reduce energy consumption, estimated that about half the Fortune 500 companies have calculated their carbon footprints, compared with just 4 percent five years ago.

In 2010, new federal environmental regulations will require large emitters of heat-trapping emissions to start collecting data on greenhouse gases, under a reporting system the U.S. Environmental Protection Agency finalized last week.

Matt Miszewski, Microsoft's general manager for its worldwide public sector, said the carbon-tracking market's growth depends in part what happens at the United Nations climate summit in Copenhagen in December.

We feel we're on the cusp of a very large market here that is about to be born in Copenhagen, Miszewski said.

We hope the current market size will be multiplying going forward and not only will we be working to protect the environment but also the global economy with sustainable green-oriented jobs, he added.

(Reporting by Laura Isensee; Editing Richard Chang)

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