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How IT Services Giants Manage Their Carbon

<p>A study of 14 of the top IT service firms found a range of approaches, but across the board from Accenture to Wipro to IBM, non-financial reporting is starting to look a lot like their financial reporting, with increased disclosure the norm.</p>

If you're curious about how sustainability reporting will evolve, the approach being taken by many large IT services firms may offer a clue.

These companies are beginning to standardize how they collect and process greenhouse gas emissions data. They are also disclosing more data for their global operations. In many ways, their non-financial reporting is starting to look a lot like their financial reporting.

This is one of many trends spotlighted in new research from U.K.-based Verdantix. Its report, "Carbon Strategy Benchmark: IT Services Sector," examined the energy and carbon disclosure and management traits of 14 companies in the space: Accenture, Atos Origin, BT Global Services, Capgemini, CSC, Fujitsu Services, Hitachi, HP, IBM, Infosys, Logica, Orange Business Services, TCS and Wipro.

Their impacts and approaches vary, but overall, this market segment is fairly mature in terms of carbon management and disclosure, said Verdantix Senior Manager Janet Lin. As such, it offers potential sustainability lessons for firms in and out of the industry.

"What we're seeing in the IT service provider space, and what may be the future of sustainability reporting at large, is the trend toward increased disclosure on three things: Scope, coverage and accounting method," Lin said.

There is an increased focus on Scope emissions -- Scopes 1, 2 and 3, meaning IT services firms are revealing more carbon data for each scope. In terms of coverage, IT services firms, which may provide things like computer networking or technical support, feel the pressure to report data for their global operations, rather than just at the facility or regional level. They are also using standard greenhouse gas accounting methods to collect, aggregate and process emissions data. The GHG Protocol Corporate Accounting and Reporting Standard is used by most of the 14 IT services firms.

Other highlights of the report include:

• Energy and carbon management strategies vary but generally include a mix of energy efficiency improvements, onsite renewable energy generation, purchases of renewable energy or offsets (including RECs, green tariff electricity), and using supply chain influence. Lin questioned the value of investing in carbon reduction strategies that fail to directly reduce energy consumption, such as RECs and offsets.

• The majority (72 percent) of IT services firms have set absolute emissions reduction targets for 80 percent of their operations or more. The targets range from 5 percent to 100 percent. Many were set pre-recession and aligned with the companies' environmental goals, but not necessarily their business strategies. "The takeaway is that although the sector overall is getting to be more mature in terms of carbon and energy management and reduction strategies, they are at different stages of maturity, reflected in the wide range of carbon reduction targets," Lin said, adding that this represents a huge opportunity to compete in this space.

• IT service firms use other vendors' carbon and energy management software or their own in-house software. "If firms are actually providing sustainability services for others," Lin said, "it's obviously important for them to keep their own house in order, which is also a driver for them to do well in their own targets and reporting."

Image CC licensed by Flickr user kennymatic.

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