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MIT Sloan Management Review

How AT&T developed a scorecard to monitor water and energy use

<p>Here&#39;s an inside look at how the telecommunications company frames sustainability in a business case.</p>

Editor's note: This interview excerpt is adapted from “Making Data Visible So You Can Act On It,” an article originally published Dec. 11, 2012 by MIT Sloan Management Review. It is reprinted with permission.

As part of AT&T’s corporate sustainability group, John Schulz works closely with several business units on integrating sustainability into their operations. He talks with MIT Sloan Management Review about managing water and energy use, and how AT&T frames sustainability in a business case.

Nina Kruschwitz: Are you focused partly on making AT&T’s own operations more efficient, and partly on making large customers’ data usage more efficient and useful?

John Schulz: Yes. Let’s start with the first part, our own operations. We manage thousands of facilities across the nation. They’re made up of tall administrative buildings in downtown areas like Dallas and Chicago — there are a great number of those.

Those facilities make up a little less than 50 percent of AT&T’s energy usage. So we did your classic Pareto analysis to figure out which 20 percent of our facilities were representing 80 percent of the usage. We needed to get more visibility to data that was useful for those 1,000 facilities — so we developed a scorecard that included questions such as: What types of projects do you have funded for that facility? What have you completed? Have you done Energy Star training? Do you have renewable energy at these facilities?

We ended up getting these very direct, I would say pretty efficient in terms of the information that they use, scorecards that grade these facilities, A through F.

The visibility of that data is what really drives behavior, because it’s shared with their peers -- who the facility managers want to do well among -- and with upper management. We found the scorecard model to be very useful, both for choosing the right points of data and then for making them visible. That was a real turning point for us.

NK: I love the connection between making something visible and then being able to do something about it. Until it’s visible, what were they supposed to do? They could go off on their own and try X, Y and Z, but they wouldn’t necessarily be the most high-leverage actions, or what senior management would want.

JS: Exactly. We looked at water, too. People might say, “Why is AT&T talking about water?” but while we recognize that we are not water-intensive like the food and beverage industry or heavy manufacturing or processing or agricultural, we do use a fair amount of water.

But we didn’t know how that broke down — where or in what kind of buildings we were using water or for what purposes. So we did a similar evaluation as we did with energy and what we found was that about 125 of our buildings represented half of our water use.

That’s a nice targeted collection of buildings, and so we dove into those buildings to find out what was going on in each facility, what kind of awareness there was for the water use, what kind of water use efficiency efforts were in place. What we found was, and I think you’ve probably guessed it, was that these buildings had cooling towers that use water to cool the environment, and they were either heavily populated with people or they were a technical space, like central offices or data centers that needed that constant cool temperature for the equipment.

So we focused on water efficiency in that cooling process. Earlier this year, we announced that we’re working with the Environmental Defense Fund (EDF) on some pilot projects at a collection of these sites to get even more detail at that level and really build the business case. The business case for water efficiency is very challenging, because water is cheap in the United States.

NK: Right now it is, yes.

JS: It’s undervalued right now. The cost of it is so low, it’s difficult to justify an investment in water efficiency. And that was the challenge that we and EDF decided to take a look at.

What we found was that you needed to marry this together with the entire cooling process. You’ll notice I didn’t say water efficiency, or water process, or cooling tower process even; it’s the whole thing. And then you can integrate energy savings related to the chiller, you can integrate potential chemicals reductions and chemical savings, because you use chemicals to treat the water. If you can reduce your chemical use, you’re not blowing those chemicals down the drain to the sewer, and also there’s savings.

So if you look at the whole process holistically, suddenly it becomes more compelling from a business case perspective. And that’s the nut we’re trying to crack with EDF.

Read more about how EDF Climate Corps worked with AT&T to reduce its water use here.

Photo of a smartphone in water provided by Evgeny Korshenkov/Shutterstock

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