Sustainability has climbed up the corporate agenda in recent years as a result of increasing calls from stakeholders for more socially responsible and environmentally friendly businesses. Under the premise that what is good for the environment may also be good for business, a number of visionary organizations have already responded with ambitious green initiatives.
Programs like British Telecom's
Climate Stabilization Intensity Target and Wal-Mart's
Sustainability 360 have positioned their sponsors as sustainability leaders in their industries. Many more businesses are now embracing sustainability as it not only exercises good corporate responsibility, but also make sense from a financial and enterprise risk management perspective.
Information Technology is central to every aspect of business today and it is becoming an ever-greater contributor to global carbon dioxide emissions. To illustrate, in the U.K., the IT and Communication sector has a carbon footprint equivalent to the aviation industry. Yet, at the same time IT also has the potential to be a significant part of the solution.
As the most technologically savvy C-level executives in their business, CIOs have the relevant credentials to tackle the technical complexity and to take the lead on this issue for the whole enterprise. Although they may not think to take leading roles, a core responsibility of CIOs in this era should be taking the initiative in setting a green agenda for their businesses.
A recent survey conducted by Forrester found that just 20 percent of U.S. corporations currently have a green IT plan and another 25 percent are developing one. The implication here is that many CIOs could potentially push their business further ahead of their competitors with a successful green IT program today. Putting it differently, continued inaction by CIOs could create a competitive disadvantage for their businesses.
It is no surprise that Gartner called green IT
the number-one priority for CIOs in 2008. Gartner also predicts that by 2010, environmental-related issues will be among the top five IT management concerns for over half of public organizations in developed markets.
Look beyond cost-saving energy efficiency
Leading IT research organizations often describe Green IT as a set of cost-saving energy efficiency initiatives. While they make good starting points, we recommend that CIOs take a more holistic approach to Green IT. CIOs should view Green IT as an IT-enabled business strategy to weave CES practices into the business.
We envisage an organization maturing through three stages -- eco-efficiency, eco- innovation and eco-collaboration -- to become a CES leader. The following diagram illustrates the concept:
When an organization first embraces CES, they often focus on internal eco-efficiency activities. As they gain organizational capability and confidence in greening their operations, their growing aspiration often leads them to the eco-innovation stage. There, they begin to develop innovative, greener versions of their product and service offerings.
Successes in the marketplace eventually lead to their repositioning as a sustainability partner and leader. In the eco-collaboration stage, they work closely with their partners to pursue greening opportunities across the entire value chain in an iterative process that may revisit each stage as the organization matures in its sustainability. Every step along this journey reduces the organization's environmental impact, and enhances their stakeholders' involvement and shareholder value.
Make IT the center of excellence in eco-efficiency
Typically, energy efficiency activities are the starting point for a Green IT program. The good news is there are many greening opportunities to pursue within IT. Low-hanging fruit that produces a visible difference, such as powering down inactive machines at the end of the day and double-page printing, can get IT departments to start thinking and practicing green.
From there, CIOs can establish more comprehensive guidelines -- for instance on reducing energy consumption, managing hazardous materials and minimizing resource usage and waste -- with a clear goal on achieving both bottom line and environmental benefits.
Greening corporate data centers will likely produce the most energy reduction in IT. However, CIOs should carefully evaluate cost-benefit of different options. Retrofitting existing data centers could achieve almost the same energy efficiency as building new greener ones but at lower cost. Similarly, virtualization also offers huge potential benefits in energy efficiency, in addition to contingency management and application management.
Amidst the many greening options, it is imperative for CIOs to steer IT toward a subset of best-ROI activities. Evaluation and selection of green initiatives require CIOs to incorporate environmental impact into existing financial metrics like return of asset and total cost of ownership.
Many CIOs will find that quantifying the environmental values of their Green IT initiatives is more difficult than quantifying financial values. This makes measuring organizational environmental footprint an indispensable element of Green IT. A well-established reporting tool like the
WBCSD/WRI GHG Protocol is useful to establish the baseline. However, on-going recording, reporting and monitoring will be a major undertaking for the whole enterprise. This can be facilitated by the CIO but will need top management buy-in to deliver and to make the necessary investment.
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PA's eco-innovation helps significantly reduce environmental impact and manufacturing costs |
Advanced computational chemistry modelling tools to predict solvency for compound development are increasingly important in pharmaceutical and biotech research. These tools can considerably reduce the volume of solvents consumed and disposed of during manual experimentation, and avoid unnecessary environmental and human exposure to hazardous chemicals. However, when the tool is not intuitive to use, uptake by scientists will be low, and few of the desired benefits will be realized.
Recognizing the eco-innovation potential of the tool, PA worked with the R&D and IT department of a leading pharmaceutical to design and build an intuitive web-based interface that significantly increased usage of the modelling tool. The new system included a 'green ranking' of solvents so that scientists could pick solvents to minimize environmental impact. Deploying the system on virtual servers and grid computing resources further improved performance and reduced energy consumption.
Multiple benefits were realized by successfully adopting this eco-innovative solution. It greatly reduced solvents and materials consumption, minimizing both environmental and human exposure to hazardous materials. Productivity increased by eliminating at least one week of scientists effort per project, reducing the time and cost to develop a drug. Within the first year, the Return on Investment (ROI) was approximately $4MM. Greater ROI may be possible if the tool was used within other business units. |
Enable business eco-innovation
As IT establishes itself as the center of excellence for green practices, CIOs can turn their attention to assist the business in reducing its environmental footprint. A short list of potential cost-saving opportunities include greening business facilities, improving logistics, reducing operational wastes and minimizing commuting and business travel. With IT efficiently and effectively measuring and monitoring the carbon emissions of the enterprise, the business can communicate credibly to both internal and external stakeholders on its overall corporate environmental sustainability progress.
CIOs should not lose sight of tremendous revenue growth potential with IT-enabled eco- innovation opportunities. Here, CIOs need to challenge IT to think outside the box and facilitate close collaboration between IT and internal business partners to develop and service the next generation of "green" products and services. A case in point is DHL's GoGreen innovation, an IT- enabled product that offers a carbon neutral package shipping option in the European and Asia Pacific markets.
Enable value chain eco-collaboration
The next wave of green innovation will require CIOs to reinvent themselves as thought leaders and visionaries for their respective businesses and industries. CIOs can help their business explore and identify greening opportunities with upstream and downstream partners in the value chain. In the case of Wal-Mart, this means partnering with their extensive network of suppliers to co-design greener products and supply chain processes. As a critical enabler, IT will facilitate information flow from one business partner to another.
Final Thought
As CO2 becomes a line item on the corporate balance sheet, managing the carbon emissions of the business is no longer an after-thought. CIOs should recognize their technical credentials and strategic position, and seize the opportunity to put IT in the forefront of sustainability changes in their organization with a well-designed green IT program.
