California Greening

The World Resources Institute (WRI), a US environmental think tank and partner in the Greenhouse Gas Protocol Initiative, has announced the formation of the Green Power Group – California Affiliates. The idea of the partnership is to share best practices for purchasing and developing new sources of clean, renewable energy to help them meet green targets and reduce the risk from uncertain electricity supply and prices.

This is the third such partnership put together by WRI, but it’s notable for the participation of IT companies based in the state. The 14 prominent energy buyers that have formed the group include AMD, Apple, BT Americas, Cisco, eBay, Google, HP, Intel and Intuit.

This really is the way to go. One thing the IT industry is good at is partnering.

Canon Can’t

Just had a new personal printer from Canon delivered. It has a 20 page A5 Quick Start manual. Unfortunately, it’s bound up with the same information in 23 other languages – 480 pages of which 460 are total useless! How many trees is that in a year?

In the past I would have been tempted to shrug my shoulders and just say there must be a better way. Now I’m smug in the knowledge that this will come back and bite Canon if they don’t do something about it soon.

The time is now past when this sort of wasteful process is acceptable from a major IT supplier. All IT vendors need to address these issues now before public opinion (and bad publicity) forces a response.

US Commitment on Greenhouse Gas Reduction?

According to ClimateBiz.com the US government has effectively said that it would agree to binding targets for the reduction of greenhouse gas emissions as long as all major economies, both developed and developing, such as Brazil, China and India, did the same. The statement, at a press conference, in Paris, is ahead of an April meeting of 17 major economies that represent 80% of greenhouse gas emissions.

It’s the inclusion of developing countries that’s the crucial point. It’s the reason that the US is now the only developed country not to sign the Kyoto protocol. Certainly real federal government commitment in the US would help promote the cause globally, but in the US itself environmental awareness is currently being driven by the individual states.

California leads the way with the California Air Resources Board (CARB) which is developing regulations for 2012 that will reduce the state’s greenhouse gas emissions to 1990 levels by 2020. Other legislation is under discussion in California and a number of other state’s are introducing emissions control regulations. In addition, around 40 states have got together to form The Climate Registry to build and run a greenhouse gas emissions reporting system.

Fortunately, US corporations, including the large IT players, are particularly aware of CSR (Corporate and Social Responsibility) issues, which have universally expanded in the last year to encompass wider environmental concerns. This is driving much of the move to a greener attitude, although I suspect action is still influenced to some degree by the geographic location of the corporate HQ.

ICT Energy-Saving Legislation

According to EurActiv the EU is set to announce a range of Green ICT proposals. The commission feels (and I agree) that IT is not being used enough in the fight to reduce carbon emissions and increase sustainability, but the EU Commission is also looking to reduce the environmental impact of the use of IT itself.

Recommendations are likely to come out later this year, but Viviane Reding, Commissioner for Information Society and Media, is quoted as saying “if necessary, we can also consider mandatory public-procurement standards”.

Having met with the UK Cabinet Office this week I think this is probably a good move. The Cabinet Office is drawing up a short list of actions to reduce the power and waste generated by government IT use. The list of around 10 initiatives – including things like turning off PCs and a greater sharing of printers – is highly commendable but falls short of any direct impact on procurement, which falls within the OGC’s (Office of Government Computing) ‘value for money’ remit.

Any EU moves would speed up a move to greater environmental input to procurement in the public sector. But given the fact that PAC’s figures show that 20% of European software and IT services spend is in the public sector (and more than 30% in the UK) this will have a significant impact on suppliers (and not just prime contractors).

Opportunity Knocks

I’ve been out talking to a number of IT companies recently to find out how they are addressing green IT issues. There’s lots of interesting stuff going on, some of which I can’t report back yet, but hopefully will soon.

One thing has struck me more than any other, though. For most IT companies Green IT means that they have to reduce their carbon footprint (which in any case has financial benefits), recycle and be generally environmentally conscious (as indicated in the previous post about Green IT rankings). In this respect effort is becoming organised, co-ordinated and company-wide.

What is much less obvious is the extent to which IT services companies are grasping the opportunities that Green IT offers. This was put in context by a LogicaCMG presentation in which Tony Rooke, their Green IT champion, says that “This is a business change scenario with the effect of Y2K but without the end date”. I couldn’t agree more.

Those in the IT services sector at the time will know that Y2K generated the greatest growth the sector has ever seen – around 25% in the UK in 1998 as the deadline approached. Green IT will not have the same impact because it is open-ended, but it does have the potential to create the same sort of business opportunities over the longer term in things like carbon measurement and monitoring, energy management solutions, asset and property management, wholesale and retail, logistics, transport, travel planning, etc. Those companies who align themselves with the opportunities now – in an organised and co-ordinated way – stand to reap significant benefits, but few seem to have got their act together yet.

Green, Greener, Greenest

The analyst community loves ranking tables and positioning charts, although, to be fair, much of this is driven by customer demands and pandering to the industry press. Anyway, in the rush to list or map companies, too much emphasis is often made of the who, rather than why.

Inevitably the same will be true of the green IT market. Greenwash is already appearing to cover any cracks that suppliers want to hide, but it will also be down to the commentators to make sensible analysis.

Computerworld recently published a ranking table that listed the top 12 Green IT vendors. Suffice to say that IBM led the table, followed by BT, the only non-US company in the list. The judging was by three experts who developed a scoring and weighting scheme based around the motivation and organisation within the company, measuring energy use, recycling, and data centre and facility energy conservation.

The problem here is, how do you compare like with like? The different energy requirements of software supplier Microsoft (6th place) and hardware manufacturer Hewlett-Packard (7th place) make it difficult to compare the two in anything more than a simplistic way. It would be more meaningful to count carbon emissions to create a per employee or per $ revenue measure, but even that would only make sense when comparing similar companies, i.e. hardware or software or services.

Even then, comparisons can be difficult. Just comparing outsourcers, as the Brown-Wilson Group did last year, means that you are comparing infrastructure outsourcing companies such as EDS with applications and BPO specialists like Accenture. They have very different energy needs and it’s much easier for infrastructure outsourcers to reduce their carbon footprint than BPO companies (or project services players).

Arguably the Computerworld approach is more of an assessment of corporate responsibility. But CRO magazine has also recently completed its own ranking, covering all of CSR with particular weight given to climate change and environmental issues. In this list Intel came out as the number one company overall, with IBM the 4th IT company in the list, beaten by Sun (which was 12th in the Computerworld rankings).

So, readers of these rankings need to be circumspect about their meaning and value. That’s not to say that we shouldn’t attempt to produce the rankings, because, lets be clear, as of now IT companies will be judged by customers and prospects on their green credentials.

The War of Words

Inevitably there was going to be a war of words between IT companies claiming to be the greenest and it’s already started. HP sent out a press release yesterday reporting that the company has recycled nearly 250 million pounds of hardware and print cartridges in 2007, up 50% on 2006 (and also making the slightly bizarre comment that this is more than twice the weight of the Titanic!).

But the company couldn’t help pointing out that this was well ahead of Dell, who in July 2007 announced that it had ‘extended its leadership in global recycling’ by being on schedule to recycle about 275 million pounds of computer equipment by 2009.

There’s two points to make here. Clearly the marketing/PR battle lines are drawn. Companies in the hardware market in particular already recognise the need to demonstrate their green credentials to the market, so the next step is to be greener than the rest.

The second point is about how hard it is to compare ‘greenness’. For a start, Dell talks about ‘recovery’ which includes recycling and re-using, but it’s not clear whether it includes refurbishing for resale. HP says that it refurbishes another 65 million pounds of equipment, which makes the total even higher than Dell.

But the real difference is likely to be in the recycling of print cartridges. I’m no expert, but I suspect it’s much easier to recycle cartridges than computers (and less subject to government regulation, at least in Europe), and HP sells an awful lot of print cartridges. A computer hardware vs computer hardware comparison would be more meaningful.

Offshore Greening

As IT services companies look to reduce their carbon footprint, because of customer demands and/or legislation, the spotlight will inevitably also fall on the lower-cost offshore sites through which work is increasingly delivered. It’s good, then, to discover that some Indian facilities are actually leading the way.

Step up Wipro. Back in 2006 the company’s software development centre in Gurgoan, India, was awarded a Platinum Rating in the ‘Leadership in Energy and Environmental Design (LEED)’ category from the US Green Building Council (USGBC). It makes it one of the most energy-efficient buildings in the world.

With lots of new development of IT facilities going on in India and a general awareness there of the need to be environmentally friendly, it’s quite possible that offshore players could gain an advantage in the Green IT services supplier stakes.

How Green is Green?

Following on from the previous post, one of the most difficult aspects of reporting on the environmental performance of IT and SITS (Software and IT Services) companies is how to measure their ‘greenness’. It’s a subject we will visit in some detail in a report in the coming months, but one way to judge how serious companies are is to look at their involvement with the Carbon Disclosure Project (CDP).

This not-for-profit organisation basically gathers greenhouse gas emissions data and other information from the world's largest companies on behalf of a group of institutional investors. It’s not the only organisation doing this sort of thing, but it is the largest and its methodology has become something of a standard. Anyway, referring to the previous post, both Microsoft and EDS made disclosures to the annual CDP survey in 2007, although whilst Microsoft has done it for four years (it’s an annual survey) EDS didn’t respond in 2006.

The list of companies that did answer the CDP questionnaire last year is encouraging. Looking at the 20 or so global players that were surveyed only two didn’t take part in 2007. One was Tata Consulting Services (TCS), which hasn’t respond to the questionnaire for the last two years (the only times it has been asked). The second is a bit of a surprise – Apple. It appears the company declined to participate in 2005, responded in 2006, but didn’t respond in 2007. One would have expected more.

By the way, The Green IT Report and Review works closely with Pierre Audoin Consultants (PAC), the leading European IT analyst firm. PAC focuses on the global Software and IT Services Industry (SITSI® is the company’s trade mark) and any references to the SITSI market size and rankings are based on PAC’s research.

Greenwashing

There was an article in the Wall Street Journal the other day about how companies are (or are not) becoming more environmentally aware. It used the word greenwashing. It’s a useful term to describe companies that are making exaggerated claims for their environmental attitudes and initiatives in order to impress their customers, shareholders, employees, etc. (it’s not just customers that will be significant in this respect).

It’s unfair to pick on any one company since many are guilty, but it just so happens that a press release from Microsoft passed our way this week which falls into this category. Microsoft seemed to be claiming some Green credibility simply through association with a client that produces environmentally friendly household and personal care products. It went on to make other claims such as the fact that the drill-down features in the reporting part of its solution to the client was more environmentally friendly because it meant fewer reports are printed. Now ask yourself, is this feature there because it’s Green?

EDS also sent round an email this week pointing out that it has added an Environmental Sustainability section to its web site (it’s here). Not greenwashing, but you could easily jump to the conclusion that it’s the sum total of EDS’ environmental awareness. In fact, as usual, the company is moving in the right direction but left behind by the mighty IBM PR and marketing machine.

Disaster Strikes

I guess you’ll have heard about the broken submarine cables that are causing mayhem to internet traffic in the Middle East and India. (By the way, there’s a great diagram of all the world’s undersea internet cables in The Guardian today).

Whilst not directly the fault of global warming (although since it was caused by a ship trying to anchor of the coast of Egypt in bad weather, who knows) it is a warning of the disruption that could be caused by bad weather and other impacts of climate change.

By coincidence it came just three days after we commented on an EDS press release about its Global Services Network. Sure enough EDS has followed up with another press release saying that the company has had no known interruptions of service to any of its clients around the world as a result of the cable break. A good advert.

More significantly, though, is the impact that this is having on business in India. As the country that has dominated the offshore development, outsourcing, support and call centre markets, having online communications dramatically impacted in this way is quite a blow. Again, it highlights the vulnerability of global business to a hostile climate.

UK Emissions Down (?)

According to Defra (The UK government Department for Environment, Food and Rural Affairs), total greenhouse gas emissions were down 0.5% in 2006, although carbon dioxide (CO2), which makes up about 85 per cent of the UK’s total greenhouse gas emissions, stayed virtually the same (a 0.1% fall).

Whilst the UK is still on track to achieve the Kyoto agreement targets, the figures are not good enough to achieve the UK government’s own emission reduction goals written into the Climate Change legislation currently going through parliament.

But in any case, all these targets exclude the emissions from international air travel and shipping, which still seem to be growing. Doesn’t make much sense does it?

I can also see the possibility of a loophole here. In a previous post I mentioned a US start-up company that plans to launch a fleet of ship-based data centres based in ports around the world. Suppose these ships actually put to sea – does that mean that they disappear from the carbon radar?