The Green Way: The Impact of Technology-enabled Sustainability
ICT makes up nearly 2 per cent of global CO2 emissions today—about the same level as the entire airline industry—and is on track for a 50 per cent increase by 2020.
Private corporations and the public sector are facing increasing pressures to reduce their carbon emissions and energy bills, driven by enforced legislation and regulation, increasing energy costs, and, perhaps as important, a constantly growing demand from customers for more sustainable operations and products, according to a study by Booz & Company. In focusing on carbon reduction related to IT departments, many companies respond by attempting relatively simple fixes, such as reducing the number of PCs in the organisation. However, this is not nearly enough to create a sustainable environmentally conscious programme.
Instead, top corporate management working with CIOs should develop a robust, comprehensive, and holistic green IT model that leverages technology to minimise the carbon footprint of the entire organisation. “Such a programme would view environmental sustainability as a business strategy, driving eco-friendly approaches throughout the organisation to improve business operations, better preserve the environment, enhance productivity, and cut costs at the same time,” commented Ramez T. Shehadi, the Booz & Company partner leading the IT Practice in the Middle East.
Green Is the New Imperative
For most companies, going green is rapidly becoming an imperative, but as critical as green strategies are, many companies are unsure about how to begin.
“It’s clear that information and communication technology (ICT) usage by companies contributes significantly to the carbon footprint, making up nearly two per cent of global CO2 emissions today - about the same level as the entire airline industry,” commented Danny Karam, a Senior Associate at Booz & Company.
What’s more, the number of PCs worldwide is projected to double between now and 2014, and mobile voice and data traffic is forecast to rise fourfold by 2012. As a result, total ICT emissions are on track for a 50 per cent increase by 2020. Faced with these realities, many companies take a narrow view of the way IT can help reduce their carbon emissions. The approach they choose is what we call “greening IT” -carbon footprint reduction programmes focused solely on minimising energy usage and non-recyclable waste in corporate IT departments.
“However, with a macro, business performance–oriented strategy that can be termed ‘going green through IT’, IT innovation is leveraged to make the organisation’s operations as a whole more eco-conscious,” added Karam.
Going Green through IT
A host of activities unrelated to IT operations within an organisation can yield dramatic carbon reduction when green applications are leveraged in areas such as process and building automation, logistics, energy, motors and teleconferencing. In fact, IT advances targeted at low-carbon solutions could lower the global carbon footprint by as much as five times the emissions from ICT itself, according to Smart 2020, a report published by the Climate Group. Just as important, these applications not only substantially diminish environmental impact in an organisation, but also have a positive effect on performance by driving down energy and waste costs.
Operational process automation: This involves sharing databases, installing wireless data communication equipment and distributing portable computers, and integrating decision support tools so that aspects of management are decentralised.
Automating internal building operations with climate control equipment, motion and light detection and control devices, and temperature sensors: The reduction in carbon emissions in global facilities could be as much as 10 per cent by 2020.
GPS and other logistics technologies: These can help reduce travel time and lower vehicle emissions in companies that rely on transportation to conduct day-to-day business activities.
Upgraded industrial motors: Industrial activity uses nearly half of all the electrical power generated globally, with industrial motors contributing 65 per cent of that figure. With an increase in the efficiency of motor systems, potential emissions savings could reach 15 per cent by 2020.
Tele- and videoconferences: Long-distance meetings and telecommuting can significantly lower the amount of employee travel and measurably reduce carbon footprint.
Although it has limited value alone, a greening IT programme can have tremendous impact on reducing carbon footprints when it is integrated with a vigorous campaign of going green through IT. Among the possible facets of a green IT programme are consolidating data centres, adopting cloud computing, installing advanced cooling systems and power management software in data centres and deploying thin clients.
In addition, the relatively short life-cycle of ICT products, and the lack of thought given to dealing with end-of-life ICT assets, has led to a growing dispersal of toxic chemicals. Electronic waste contributes 70 per cent of all toxins to the waste stream. “Corporations, of course, are the largest users of ICT and hence are responsible for a significant portion of its overall carbon footprint. CIOs can work with ICT vendors to participate in - or establish - an asset recovery programme that can extend the life of systems, using strategies such as refurbishing equipment and extracting useful components and materials from recyclable systems,” commented Shehadi.
Green IT Governance
For strategies of greening IT or going green through IT to be effective, IT governance has to reflect sustainability on an ongoing basis with clear steering mechanisms and key performance indicators (KPIs). Typical governance considerations are:
Management processes: What are the oversight requirements for green IT practices? Which executives and which departments are required to do which activities to make sure that the green IT programmes and policies are implemented well?
Organisational structures and footprint: What is the appropriate operational model to deliver the green IT programmes?
Architectures: Which technology solutions should be adopted for green IT?
Policies and controls: What are the measures and rules used to monitor the environmental impact of green IT?
Supplier management: What types of incentives can suppliers be given to embrace the organisation’s green IT approach?
“Creating a successful green IT strategy is extremely challenging, but the effort is well worth it, particularly when the green IT programme delivers cost savings, an enhanced global reputation and even new potential revenue streams,” commented Shehadi. On the basis of its findings during the study, Booz & Company has developed a four-phase framework to keep a green IT programme on course and overcome the obstacles to its implementation.
Phase 1: Diagnostic/Baselining
Baselining consists of bottom-up data collection and a top-down visioning process. The bottom-up aspect involves assessing a company’s carbon emission footprint currently and in previous years in (a) the IT function and (b) the organisation’s entire business operations. In this step, the goal is to delineate and quantify the carbon footprint of high-emitting activities, such as production facilities or travel, by using available data including electricity bills, travel and purchasing records, energy usage data and waste reports. These baseline results are compared with benchmarks available from other organisations of similar types and sizes, in part to identify where improvement opportunities exist.
At the same time, the top-down process involves interviewing and surveying senior stakeholders about their level of satisfaction with IT and their expectations for sustainability in both the IT group and the overall business. The key is to align the organisation’s sustainability targets with the company’s aspirations for its green programme.
Phase 2: Opportunity Assessment
Based on the results of baselining, top company stakeholders meet in a series of workshops to identify and prioritise IT and organisational alternatives for reducing carbon footprint and energy costs.
In preparation for the workshops, appropriate green strategy benefits to focus on are culled from these sources:
- Databases of companies that have successfully implemented green IT strategies to find possible areas of savings
Review of processes and practices in the IT group or throughout the organisation that could be improved.
Phase 3: Target State Definition/Blueprinting
Based on the prioritised initiatives and opportunities, recommendations for a green IT strategy are offered. Among the detailed aspects of the blueprint:
The landscape of future applications needed for the going green through IT programme; such things as videoconferencing facilities, energy consumption dashboards and building automation systems are likely candidates.
The planned technology infrastructure for greening IT—e.g. cloud computing and the future landscape for desktops, servers, printers, data centres, wireless communication devices and networks.
The governance and organisational processes to manage and measure the performance and delivery of the green IT strategy.
Phase 4: Green IT Road Map and Business Case
The green IT strategy is translated into a master plan with a short and long-term project road map. For each prioritised initiative in the plan, KPIs are established. Ongoing programme assessment transparency and organisational change management procedures are also defined in this phase.
In addition, an overall business case is developed that balances carbon footprint reduction goals for both greening IT and going green through IT with a self-funding implementation plan when possible. To achieve such a plan:
Projects are phased in, starting with anticipated quick wins and using generated savings to fund more capital-intensive parts of the road map.
External funding, such as from government incentive programmes, is sought for initial seeding.
When possible, equipment is phased out at the end of its useful life with savings from this effort transferred to the green IT campaign.
Finally, there should be a robust change management function incorporated in a green IT programme. Successfully adopting green IT approaches is not achieved without substantial behavioural change, and such a cultural shift is impossible without visible management support.
For most companies, going green the right way remains a mystery or a problem too daunting to tackle in a fully-fledged approach. But avoiding this issue in the hopes that it will resolve itself via half measures is not acceptable anymore, as many organisations are learning; this can result in continuing inefficiencies, expensive energy costs, wasteful processes and less than stellar relationships with potential customers. “The four-phase approach for a holistic green IT strategy takes a longer-term vision to implement, but the sustainable results over time will more than pay for the effort it took to reach them,” concluded Karam.