SEC issues guidance on climate change disclosure

On Wednesday the US Securities and Exchange Commission (SEC)voted (although apparently only with a 3-2 split along party lines) to provide public companies with guidance on SEC disclosures as they apply to climate change.  The SEC has not stipulated any new legal requirements but the guidance is intended to provide clarity and create consistency for public companies and their investors.

The guidance applies to existing rules that may require a company to disclose the impact that business or legal developments related to climate change may have on its business, i.e. risk factors, business description, legal proceedings and management discussion and analysis.  The SEC highlights the following areas as examples:

• Impact of legislation and regulation

• Impact of international accords

• Indirect consequences of regulation or business trends

• Physical impacts of climate change

The SEC is quick to say that "We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics," said SEC Chairman Mary Schapiro. "Today's guidance will help to ensure that our disclosure rules are consistently applied."

It’s an interesting situation.  Whilst this government body maintains it is not pronouncing on climate change, it has found it necessary to produce guidelines on company reporting, presumably in response to investor pressure.  So it’s effectively the stakeholders that have forced the move, rather than the the government itself.  This is likely to be the way corporate climate change action comes about in 2010, particularly in the US.

It’s also another step towards universal corporate carbon counting.

Intel plans eight new solar installations and gets staff on board

Intel is continuing its efforts to reduce its carbon footprint with the news that it plans to create new solar electric installations at eight of its US locations, generating around 2.5 megawatts of solar energy. 

The company has also increased its renewable energy credit (REC – the currency of renewable energy markets) purchases by 10%, covering more than half of the company’s estimated US electricity use in 2010.  As a result it has (again) been named as the largest voluntary purchaser of green power by the EPA.

Intel has a long-established commitment to increasing energy efficiency and reducing its carbon footprint and says it has spent $30m and saved more than 650 million kilowatt hours of electricity worldwide since the program started in 2001.

The company’s other actions include:

• Investments: Intel Capital, Intel's global investment organisation, has invested over $125m in more than a dozen cleantech companies.

• Renewable energy installations: As well as the US solar installations, Intel has a solar thermal installation in Bangalore, India and will shortly be opening the company’s first LEED-registered building in Haifa

• Employee Engagement: A portion of each employee's variable compensation is apparently tied to company performance against environmental metrics, which include reducing Intel's absolute carbon footprint growth. “As a key element of Intel's new solar installations, awareness kiosks will be set up in each site lobby to educate and engage employees in the company's energy efforts”.

Whilst Intel has clearly put a lot of money and effort into increasing efficiency and reducing emissions, I’m also impressed by the employee engagement part.  Educating and engaging employees will help spread the word beyond the company’s own operations, which must be a good thing.  Having compensation tied to environmental metrics is also great, providing employees are engaged and have some responsibility for achieving the goals.  (Tying compensation in with a scheme that employees are not engaged in and with which they have no meaningful input would be a potential disaster).

New UK government ICT strategy. Greening is still a mystery.

The UK government yesterday launched its new Government ICT strategy with the strap-line of ‘Smarter, cheaper, greener’ – the full document is here.  It applies to all of the UK public sector - central and local government, the wider public sector and devolved administrations.

Key measures include establishing a Government Cloud or ‘G-Cloud’, providing multiple services from multiple suppliers, consolidating data centres down from ‘hundreds’ to 10-12, creating a Government applications store and implementing a common desktop strategy. 

The overall strategy is divided into 14 strands of delivery, listed below.

 

In terms of greening ICT, there are various aspects of the above strategy that will help, as well as the specific Greening Government ICT plan which is already in place.  However, there is little in this document that adds to that Greening ICT plan, except the comment that it will be refreshed to reflect environmental and technological advances and include the following activities to take the plan through to 2020:

• the development of common measures of delivery

• work to be undertaken internationally to agree common product standards and requirements, and

• the development of mandatory minimum green standards for ICT products and services.

In fact the overriding goals for the UK government in greening its ICT are:

• Government ICT will be carbon neutral by 2012.

• Government ICT will be carbon neutral across its lifecycle by 2020.

The real ‘elephant in the room’ is how it expects ICT carbon neutrality to be achieved by 2012.  At least there is now a definition, published by the government last October; “Carbon neutral means that – through a transparent process of calculating emissions, reducing those emissions and offsetting residual emissions – net carbon emissions equal zero”.

The government’s own update of greening ICT progress relied on reporting the plans of departments and case studies of actions to indicate progress.  What it did not have was a total for government ICT CO2 emissions and details of the reductions made so far, probably because no such figures exist.

Even though offsetting is seen as the last resort in reducing emissions, ICT carbon neutrality cannot be achieved without it.  And if offsets are required, paying for them is going to take a sizeable chunk of budget going forward.  What will that do to government ICT and how will it impact the ability of ICT operations help the rest of government reduce emissions?

A week is a long time in climate change legislation

A week is a long time in politics, and it now also seems to be a long time in the area of climate change policy.  Anyone who has been following the news closely over the last week might think that we’re losing the battle, despite my comments just a week ago.  Here’s some of the bad news:

• The election of a Republican as Massachusetts senator (after more than 30 years of Democrats) is not only significant because of the change in political climate, it also means that the Democrats no longer have a commanding hold on the Senate.  Since support for climate change action is pretty much split down party lines, it doesn’t auger well for environmental legislation, which still has a long way to go to reach the statute books.

• A (Republican) senator from Alaska has said she is considering using an obscure process (a ‘resolution of disapproval’) to prevent any US administration (now or in the future) from using the EPA to control emissions and hence climate change.  (The EPA only recently declared greenhouse gasses to be pollutants, allowing potential ‘backdoor’ legislation to prevent emissions).

• In addition, the US Small Business Administration is arguing that the EPA did not consult a a panel of small businesses to review proposed legislation to prevent CO2 pollution, as required by federal law.

• A group of European manufacturing companies under the name of The Alliance for a Competitive European Industry (ACEI), sent a letter to the European Council, European Parliament and European Commissions, saying that they were opposed to any commitment to reduce emissions by more than 20%.  The EU’s stand is to reduce emissions by 20% (on 1990 levels) by 2020 and to increase the target to 30% if there are similar commitments from other developed countries.  That now seems unlikely.

On the up side:

• France is moving towards imposing a carbon tax on large industrial installations until 2013, at which time emission permits under the revised EU Emission Trading Scheme (EU ETS) will kick in.  It follows the failure of the previous proposal, which was thrown out by the courts on the grounds that it would impose an unfair burden on consumers.  The tax would not have been applied to 93% of industrial carbon emissions, with more than 1,000 of France's biggest polluters avoiding it.

• In an open letter to European Commission president, the EU Corporate Leaders Group on Climate Change called for the EU to submit an ambitious EU GHG reduction plan by the 31st January deadline (as agreed at Copenhagen).  The letter called for the EU to stick with the 30% by 2020 ‘in tandem with similar commitments by other developed countries’.  The EU was expected to revert to the 20% target (see above).  There were 20 signatories, including Deutsche Telekom, Telecom Italia and Vodafone, but IT companies are conspicuous by their absence.

 

What does it mean?  Well for the last 12-18 months it has looked like 2010 would be the year that green ICT would really take off.  What with the Copenhagen conference and a new US administration introducing its own legislation, the pressure to manage emissions seemed likely to reach boiling point this year.  But whilst growth in the market will remain very high (compared with almost every other aspect of ICT) it’s not going to be the boom time that many (including me) expected.

It’s likely to be a long struggle to get a global commitment on emissions reduction targets and much will depend on what happens in the US.  It now seems that corporate stakeholders – customers, shareholders and employees – will continue be the ones creating the pressure for companies to conform.  The most enlightened corporations will also join the calls for action, which is why it’s disappointing not to see more ICT players lobbying for climate change legislation – particularly since most will benefit from it.

State of the data centre

A couple of weeks ago Symantec published a report called 2010 State of the Data Centre.  It’s based on telephone interviews with 1780 respondents from all company sizes in 26 countries.  The full report is here.

There are limited references to green, environment or sustainability and in fact ‘Green IT efforts’ ranks tenth out of twelve key objectives in 2010.  But then that’s not really surprising.  In the current climate, saving money is a key objective, rather than the more nebulous idea (at least to many data centre managers) of green IT. 

In an economic downturn, reducing costs, with power consumption a prime target, is a the big issue and that certainly is a focus – it’s a key objective in 2010 by some margin.  A total of 54% of respondents said it was an absolutely important target.

However, the following chart substantiates the view that operational security overrides most other considerations, taking the top three places in terms of the importance of new initiatives in 2010.

Almost 70% of respondents pointed to energy savings as an absolute or somewhat important area for new initiatives, with similar figures for various activities that help achieve it; server virtualisation, server consolidation, storage virtualisation and data centre consolidation.

The detailed breakdown seems to be confined to IT infrastructure initiatives, so there’s no reference to the cooling systems, data centre layout or building efficiency.  It will come.

New green standards – do we need them?

Last week the GHG Protocol Initiative announced that 60 companies had started measuring the greenhouse gas emissions
of their products and supply chains by testing a new global framework, part of the Greenhouse Gas Protocol Initiative.

The two new GHG Protocol standards – the Product Life Cycle Accounting and Reporting Standard and the Scope 3 (Corporate Value Chain) Accounting and Reporting Standard – provide a methodology to account for emissions associated with individual products across their lifecycles and of corporations across their value chains.

To date most companies have been focusing on their Scope 1 and 2 emissions, i.e. in-house generation and electricity use.  Scope 3 has tended to be confined to business travel.  This new standard will allow companies to look comprehensively at the impact of their corporate value chains, including outsourced activities (particularly useful in the IT industry), supplier manufacturing, and the use of the products they sell.

More than 20 industry sectors from 17 countries are represented.  Participants from ICT include Autodesk, Belkin International, BT, CA, Eclipse Networks, IBM, Lenovo, and SAP.

The draft standards were developed over the last year with participation from over 1,000 volunteer representatives from industry, government, academia and non-governmental
organisations.  The final standards are scheduled to be published in December 2010.

This is a real step forward in emissions calculations.  With the GHG Protocol setting the standard for emissions calculations around the world, this addition is also likely to become the de-facto standard for more comprehensive evaluation of scope 3 emissions.  It’s going to be in all emissions calculating software solutions very soon (if not already).

Whilst the extension of the GHG Protocol standard is to be welcomed, the same cannot be said for a new green electronics standard from an organisation called the Sustainability Consortium, which is co-administered by Arizona State University and the University of Arkansas.

The organisation is apparently working with companies including Best Buy, Dell, HP, Intel, Toshiba, and Walmart to research and publish findings on the lifecycle environmental and social impacts of electronic products.  The findings will be used to support efforts to identify products as sustainable or ‘green’. 

The press release goes on to say that; “The information is designed to reduce consumer confusion and help standardise product claims” and that the Sustainability Consortium “is investigating how to collaborate with standards and programs with which consumers are already familiar, such as EPEAT and ENERGY STAR, and standards set forth by the Electronic Industry Citizenship Coalition”.  If they’re trying to reduce confusion, why introduce another assessment alongside the “already familiar” standards available?

I’ve said before that what’s needed most is to provide clear information to companies and consumers to help them manage their emissions.  The new GHG protocol does that, the Sustainable Consortium just muddies the waters.

In France it’s eco-ICT

GreenIT.fr has reported that France Terme, the official arbiter of correct French language usage (on behalf of the Minister of Culture and Communications) has determined that what everyone else calls green IT should be known as eco-ICT (éco-TIC) in France.

Well, hopefully, actions will speak louder than words.

Ten smart grid companies to watch

Smart Grid News in the US has been running a feature on the Smart Grid Companies to Watch in 2010, as voted by its readers, and the results are here. 

Here’s the headline top 10 companies with a very brief description of what they do:

Ambient - designs, develops and markets communications technologies and equipment.

Beacon Power - designs and develops products and services to support electricity grid operation.

Consert - designs and implements intelligent energy distribution and management networks.

GRIDiant – provides real-time and historical intelligence software systems and services for the electric power grid.

PowerIt Solutions - provides intelligent energy management systems for industrial facilities using demand response and demand control.

REGEN Energy - works with resellers and engineering consulting firms to deliver solutions for demand management and demand response.

SmartSynch - a Smart Grid infrastructure company enabling utilities to communicate with any device on the grid.

Tropos Networks – supplies IP broadband mesh networks used to build foundations for smarter utilities and communities.

Viridity Energy - provides large energy consumers with tools to increase energy efficiency and create energy revenues.

VYCON - a manufacturer of flywheel energy storage systems.

There’s more information and links to these companies in on the Smart Grid News site (which I would recommend to those interested in the market).

I don’t know these companies but I suspect a few will become familiar in the coming years.  ICT suppliers will be looking for alliances and acquisitions in the sector as the market takes off and some of the main targets may well be in this list.  On the other hand, readers votes may not necessarily reflect the best there is …

New sustainability analytics from SAP

Continuing its push into the sustainability market (see our report in December) SAP has released a new package of sustainability solutions under the name of Best Practices packages for sustainability. 

There are three elements; Best Practices for Analytics in Health and Safety, aimed at helping businesses identify operational risks through monitoring health and safety activity, Best Practices for Analytics in Product Safety and Stewardship, and Best Practices for Analytics in Environmental Compliance, which covers emissions and environmental management metrics.  They all have pre-defined operational analytics, together with enterprise dashboards and reports.

There’s more on the SAP Sustainability web site and if you’re interested in links to the green portals of other IT suppliers there’s a list of links on the web site.

Amazon.com is using EPEAT labelling

We reported earlier in January about the on-going success of EPEAT, the green electronics rating system, and the fact that it had tightened up of its registration process.  Now, though, it has made another breakthrough with the announcement that Amazon.com has begun to use EPEAT to identify greener electronic products on its website. 

It means that the 51 environmental criteria that the three EPEAT ratings (Bronze, Silver and Gold) are based on can be an element of IT product selection in Amazon.  EPEAT has ratings for more than 800 environmentally preferable IT products.

To date EPEAT has had most success in the business-to-business sector, mainly because it is a purchasing requirement for US Federal Agencies and is being adopted as a standard by other governments around the world.  In the consumer world it has been mostly restricted to the IT companies themselves promoting the ratings of their products on their own web sites, so this is a significant break through.  The value will increase as EPEAT expands into consumer products over the next year.

It’s a great move, but currently restricted to Amazon.com in the US, and not yet adopted by local Amazon sites such as Amazon.co.uk.  That may be because EPEAT only created an international registry in August last year (covering 40 countries) so as yet products may be limited.  Lets hope it expands soon.

My other concern is that, having just looked at the web site, it’s not that user friendly.  To find EPEAT-registered products you have to scroll down to the ‘green’ menu item on the first electronics page to find a link to products within the three registration levels.  Individual products are marked as EPEAT-registered, but not whether they are Bronze, Silver or Gold.  It would be much better to have all the information, and its meaning, was available to those who are just browsing.  But it’s a start.

Emerging leaders in Enterprise Carbon Accounting

Groom Energy Research has released a report into the Enterprise Carbon Accounting (ECA) software market.  The report says that more than $46m in venture capital was invested in ECA start-up companies, with big-name players such as Computer Associates and Microsoft entering the market as well as several acquisitions, including SAP (Clear Standards) and IHS (ESS).

The report cites three main factors in the ECA market growth:
• Increased pressure from customers and investors for companies to create a ‘greener’ public image.  This was found to be a more important driver than pending GHG regulation;
• Cost and energy savings from sustainability investments;
• Mandates from buyers, like the Walmart Supplier Sustainability Assessment Program that was implemented to measure the environmental impact of supplier operations.

The increased pressure on companies to report emissions is clear and is demonstrated by the number of companies reporting to the CDP, which increased over 50% last year, as the chart below shows.

“In light of the economic climate, sales growth for ECA software shows the importance of this emerging category,” said Paul Baier, report author and vice president of consulting
services for Groom Energy. “Our on-going customer and vendor research reinforces our belief that the ECA market will see explosive growth in size and global importance in 2010 and 2011.” The number of organisations using ECA software is expected to increase five fold by 2011.

This is the third report on the subject from Groom Energy.  In 2008 the company identified 40 vendors in the market but that has increased to 60 this time round, which the report splits into four categories: environmental health and safety vendors (EHS), new products from large firms, start-up companies and energy management firms.

Eight companies are highlighted as 2010 ECA Emerging Leaders, based on number of customer deployments, technology features, market vision and financial stability. These are:

• Enablon
• Enviance
• Hara
• IHS
• Johnson Controls
• PE International
• ProcessMAP
• SAP.

This very much supports the views expressed in this blog over the last year.  Carbon accounting software (which comes under a variety of names, including Carbon Emissions Management Software – CEMS) is perhaps the most visible new market opportunity in green ICT.  Eventually almost all companies will be obliged to report emissions – even if legislation is slow stakeholder pressure is growing by the minute – so it has huge market potential. 

The vendor landscape is following the usual trajectory of a new ICT market, with small start-ups having paved the way and the big players, seeing the opportunity, have now weighed in.  The number of vendors may grow this year, but this is a market not that far from maturity.  Features and functions are pretty much known and innovation is slowing.  I would expect significant consolidation to start by the end of this year, with the lucky start-ups finding a big-name buyer.

Post-Copenhagen pressure pushes green ICT

Copenhagen may not have been the success hoped for, but that doesn’t mean that there is any less pressure on governments and companies to address their carbon emissions.  The following activities have been reported since the start of the year:

• This week several investor groups, representing $13 trillion in assets, came together to issue a statement urging a legally-binding agreement this year, including a global emission reduction target of 50–85% by 2050.  “While we will continue to press for an international agreement, we come to the United Nations today to collectively say that investors, businesses, and governments cannot wait for a global treaty before taking action”.

The group urged governments to adopt short- and long-term emission reduction targets, to put an effective price on carbon, instigate energy and transportation policies, introduce financing mechanisms to mobilise private-sector investment, provide financing to support climate change adaptation and to force corporations to disclose climate-related risks.

• Billionaire investor George Soros came out for a US cap-and-trade bill at a recent UN-backed Investor Summit on Climate Risk.  His reasoning was that without some carbon pricing the US clean tech sector would lose out.

Soros’ support may not be entirely altruistic, though.  He has previously critical of a cap-and-trade mechanism because it creates a market that can potentially be manipulated.

• Adding to corporate pressure, Reuters reported earlier in the year on renewed calls my the Aldersgate Group of UK firms, green groups and MPs for the government to force companies to report their greenhouse gas emissions.  (The group has been making the demand since June 2008). 

A letter was sent to business minister Peter Mandelson signed by WWF and Friends of the Earth and over 50 MPs including Liberal Democrat leader Nick Clegg and Conservative shadow environment minister Greg Barker.

• In France, Carbon Tax legislation fell at the last hurdle at the end of last year, primarily because it was aimed at households and did not include significantly polluting businesses.  However, new legislative proposals are expected shortly which will impose the tax on companies.

• It’s not all good news, though.  In his annual speech to the Chamber of Commerce in the US, Thomas Donohue, President and CEO, criticised US legislative plans on climate change; “The bill passed by the House last year would tie economic activity in knots and eliminate jobs from one end of the country to another”.  “They (businesses) see a climate change bill and potential EPA regulations that could significantly raise energy prices and impose new layers of bureaucracy on their organisations”.

Several companies have left the Chamber because of its stance, including Apple.

 

The point is that whilst a global agreement at Copenhagen would have accelerated international legislation and hence corporate action, there is still significant pressure on governments to introduce national laws and on companies to act now  This year may not be the sudden boom time for green ICT that was expected, but it will still see significant growth to address these pressures.

Copenhagen wheel – green, but is it practical?

One news item I missed from the Copenhagen meeting in December was the Copenhagen wheel, from MIT, which was launched at the conference.

The wheel is an electronic bicycle add-on based round a Kinetic Energy Recovery System (KERS).  When you brake the kinetic energy is recovered and stored in batteries in the wheel for use later.  The sort of things it can power are a Bluetooth connection to a handlebar-mounted iPhone, travel data such as speed and distance, how close friends are, and air pollution levels.  It can also send you an SMS message if the bike is stolen (which seems very likely, given the obvious, large wheel hub).

The idea of an incentive scheme, whereby people can collect green miles, has also been discussed with the City of Copenhagen.

 

 

The wheel is expected to go into production this year, but it does raise a number of questions, such as ‘Does it make it harder to pedal?’ and ‘Why only iPhones?’.  Anyway, it’s a novel green ICT application, see what you think in the video above.

Apple moves into smart energy management

ICT companies have been seizing on the opportunities in the smart meter/grid market over the last year.  Examples include Google’s  PowerMeter energy management software, Microsoft’s Hohm energy management tool, Intel, which demonstrated the concept for a home energy management dashboard at the Consumer Electronics Show this year, and many other devices and solutions have started to appear. 

(Google has even gone one further by stepping into the energy market.  It was reported at the beginning of January that the company had set up a subsidiary called Google Energy and had applied to the Federal Energy Regulatory Commission to be allowed to buy and sell electricity on the wholesale market).

Anyway, Apple has now joined the energy management fray.  According to Patently Apple, the company has filed a patent for a Smart Home Energy Management Dashboard system.  It’s based on HomePlug Powerline networking, which turns power outlets into a conduit for audio, video and data.

Apple’s patent adds a means to manage the power that goes to individual devices, so that equipment can be turned down or off when not in use.  The flowchart below gives an indication of how it would work.

This is becoming an increasingly competitive market with lots of companies clearly recognising the opportunities for home energy management solutions.  It must be a good opportunity for Apple, given its growing reputation beyond IT into entertainment and hence a better claim to manage a range of home power requirements. 

Given the size of the market opportunity and the class of companies competing we’re bound to see more patents in what will be a fiercely competitive space.

Green IT 2.0 – people, not technology

Don’t you just hate the jargon and TLAs (Three Letter Acronyms) that the ICT industry seems unable to do without? 

I guess most of us have come across one TLA we didn’t recognise at some time.  Try looking it up in Wikipedia and you’ll discover there are 10 or 20 possible meanings.  Why didn’t they just make it clear in the first place?

So it is with green IT 2.0.

What they mean is that green IT is starting to move outside the ICT department itself, specifically the data centre, into the other areas of the organisation where the application of ICT can reduce emissions.

You can see the logic – it follows on from web 2.0, where the internet itself entered a different phase of adoption and use.  But in the case of web 2.0 there were specific technologies behind the move.  The appearance of wikis, blogs, social networks, podcasting, RSS, multimedia sharing, online collaboration tools, etc, all supported by the rapid growth of broadband, created a new internet environment.

In the case of green IT, nothing has changed.  The means to help reduce emissions across an organisation has always been there.  It is not the ICT that’s changing but the external pressures on companies.  As we come out of recession, as carbon legislation bites, as carbon costs increase and as society as a whole puts pressure on companies to reduce emissions, so green ICT will grow rapidly.  It’s starting to happen now.

There is new technology that will help green ICT, but growth is much more dependent on people.

Oracle smart water meter report released

On Monday Oracle released the results of a survey into the perception of, and future plans for, smart meter technology in the water industry in the US and Canada.  The report “Testing the Water: Smart Metering for Water Utilities” (available from here) included the views of more than 1,200 water consumers and 300 water utility managers.

The report revealed that there are concerns among water customers:

• 76% recognise the need to conserve water.

• 69% believe they could reduce their personal water use.

• 71% believe that having more detailed information on their water consumption would encourage them to take steps to lower their use.

At the same time, water utility managers showed commitment to promoting water conservation:

• 73% say their utility actively promotes water conservation.

• 68% believe that adopting smart meter technologies is critical, although only one-third are currently considering or implementing the technology.

 

 

The most significant benefits of smart meter technology were cited as enabling early leak detection (62%), followed by supplying customers with tools to monitor/reduce water use (35%).  Inhibiters to implementation are lack of cost recovery or measurable return on investment (46%) and upfront utility expenses (42%).

It’s a reminder that smart grids are not just for energy providers.  The power companies get most coverage because the drivers are clearer and there are more of them; greenhouse gas emissions, energy costs, carbon costs, renewable energy integration, energy security, micro generation, etc.  And these drivers are pretty much universal.  In the case of water, there is concern around the world about future shortages, but in many countries it is a less urgent issue, with less invested interests in pushing the issue.  In the UK we don’t even have universal coverage of any sort of meter – water is often charged on a flat rate.  (Maybe that will help a jump to smart meters).

Smart water meters are certainly coming and will be inevitable in the long run.  It’s another green ICT opportunity for those players that have a utilities sector focus.

Apple rejects green disclosure

Apple may have made progress in Greenpeace’s rankings (see Greenpeace – latest green electronics guide) but the company is still inexplicably resisting publishing its overall GHG emissions and targets.

Thanks to the US EE Times on Tuesday for pointing out that the company is opposing calls from shareholder groups to increase the company's environmental efforts.  The resolutions will be voted on at the company's stockholder meeting in February 25th.

The proxy statement for the meeting lists the resolutions, one of which, from As You Sow, an organisation that looks to increase corporate accountability and is acting on behalf of a group of shareholders, calls for the publication of a sustainability report.  The report should “.. describe corporate strategies regarding climate change, specifically to reduce greenhouse gas emissions and address other environmental and social impacts such as toxics, recycling and employee and product safety”.

Apple opposes the resolution (as it does another resolution asking for a Board Committee on Sustainability to be set up).

The Company points out that it does do a lot around sustainability and publishes detailed information.  It concludes that “the level of transparency far exceeds that of other companies in the industry. The Company is already substantially fulfilling—and in many respects exceeding—the request for information in Proposal No. 6”.

But, as far as I’m aware, nowhere does the company give its overall emissions figure and targets for reduction.  In the latest CDP response (2009), for example, the company coyly says that ‘Apple has reduction targets, although it is generally not our policy to trumpet our plans for the future’.

It is a very odd stance and differs from all other major IT suppliers.  Let’s face it, Apple has made it’s name from being different from the rest, but in this case it must be damaging both the company and the green ICT efforts of the industry as a whole.  If the company is serious about addressing climate change why not publish the information requested?

It’s a serious issue because to make sense of green claims we need to have clear and transparent reporting.  Without that there is no realistic way to judge and compare.  And if a company like Apple ducks the issue it opens the door for others to follow.

Adobe installs wind turbines

Adobe has installed 20 vertical wind turbines at its San José HQ. 

It sounds like a big deal, but the figures suggest its not going to make a big impact.  The company estimates that it can get about 2,500 kWh per year per turbine and the US Department of Energy estimates that a typical US home consumes ~11,000 kWh per year.  So the turbines will generate enough electricity to power about 5 typical US homes, which I guess is not going to make much of a dent in Adobe’s HQ emissions.

On the other hand, the wind is there and micro-generation is the way of the future, so it’s all worthwhile.

In fact Adobe has initiated quite a number of energy and conservation projects in recent years to improve the HQ site's environmental sustainability.  The company reports that it has reduced:

• Indoor water use by 22%

• Landscaping water use by 76%

• Electricity use by 35%

• Natural gas use by 41%

As a result the site has earned three Platinum-level LEED certifications from the US Green Building Council.

There’s a lesson here.  Many companies are going for the headline big projects that achieve significant improvements in energy efficiency or use of renewable resources.  But that’s not always possible and there is a lot that can be achieved through taking smaller bites at all available alternatives.

Let’s face it, cherry picking the easy solutions only takes you so far.  To achieve the level of emissions reductions we need in the long term will require continued incremental improvements when the big bang approach has been and gone.

Oracle’s green transport solution

Not really a new solution, but Oracle has announced a new release of its transportation management software which has a distinctly green flavour.

There are a number of new features in Oracle Transportation Management 6.1.  Oracle Fleet Management has been expanded to include planning scenarios to help equipment utilisation and reduce costs and there are also new business intelligence capabilities and dashboard reports that help measure and monitor green metrics.

The company says that the software helps clients meet sustainability objectives in several ways:

• It includes a new mobile communication platform to capture information about shipments and communicate with drivers in real-time.

• The communication platform can also improve efficiency by automatic shipment monitoring to see whether any additional action or support is required.

• The software has additional support for the US Environmental Protection Agency (EPA) SmartWay Transport Partnership, with the green dashboard that also incorporates SmartWay emission factors.

The SmartWay Transport Partnership, launched in 2004, is a partnership between government, business and consumers designed to reduce fuel consumption.  The aim is to develop strategies, financing and advanced technologies to help the freight sector reduce emissions.

All good stuff from Oracle and shows how the industry is converging on green solutions, or at least adopting green aspects alongside efficiency and process improvement capabilities.  It’s companies like Oracle and SAP, with their extensive enterprise solutions, that will push the incorporation of green metrics, although it often needs something like SmartWay to set the agenda.

SAP has also been putting out sustainability messages, particularly around the supply chain, ahead of the National Retail Federation (NRF) 99th Annual Convention and Expo in the US.  However, Peter Graf, the chief sustainability officer for SAP, is quoted in ComputerWorld as saying “I find [green IT] a little bit exaggerated. Green IT is usually positioned as reducing the energy consumption of the data centre.  I'm not dismissing it, but the real opportunity is in logistics, production, in distribution and production."

Seems an odd comment.  I think most people in the ICT industry have accepted for some time that ICT’s primary role is in reducing emissions outside the data centre.  It’s true that much of the business to date has been in reducing data centre energy, because it reduces costs, important in the current climate, but perhaps that’s because companies such as SAP have not been pro-active enough.  Readers will know that I have had reservations about SAP’s green stance in the past, but hopefully that’s over.

Green communications initiative

Alcatel yesterday launched a communications industry consortium with the aim of dramatically reducing the energy used in communications networks.

Called Green Touch (and with its own web site – www.greentouch.org), the group aims to deliver, by 2015, the architecture, specifications and roadmap — and demonstrate key components — needed to reduce communications energy consumption per user by a factor of 1000 from current levels. The initiative also offers the potential to generate new technologies and new areas of industry.

The problem is that today’s networks are optimised for performance.  To be optimised for energy efficiency implies a different design and architecture and that’s what the consortium plans to address.

Alcatel believes the target is achievable because a fundamental analysis by Bell Labs of the underlying components of ICT networks and technologies (optical, wireless, electronics, processing, routing, architecture, etc.) and a study of their physical limits has shown that today’s ICT networks have the potential to be 10,000 times more efficient.

There is certainly scope to make considerable energy savings.  ICT accounts for around 2% of global greenhouse gas emissions and of that fixed-line telecommunications account for about 15%, mobile contributes an additional 9% and LAN and office telecommunications about 7%.

 

It’s not a huge amount, but ICT usage is expected to expand rapidly over the coming decade, especially in developing countries, and communications will be a major contributor to growth.  Just think about the expansion of the internet to manage rapidly expanding high-bandwidth traffic, software-as-a-service, additional mobile functionality, videoconferencing (replacing travelling), and the possible exponential growth of machine-to-machine communications through smart meters and the Internet of Things.  There is a danger that energy use could spiral if unchecked.

In addressing the issue the Green Touch consortium is bringing together industry, academia and government labs.  Founding members include:

• Service Providers:  AT&T, China Mobile, Portugal Telecom, Swisscom, Telefonica

• Academic Research Labs:  The Massachusetts Institute of Technology’s (MIT) Research Laboratory for Electronics (RLE), Stanford University’s Wireless Systems Lab (WSL), the University of Melbourne’s Institute for a Broadband-Enabled Society (IBES)

• Government and Nonprofit Research Institutions: The CEA-LETI Applied Research Institute for Microelectronics (Grenoble, France), imec (Headquarters: Leuven, Belgium), The French National Institute for Research in Computer Science and Control (INRIA)

• Industrial Labs: Bell Labs, Samsung Advanced Institute of Technology (SAIT), Freescale Semiconductor

Membership in the forum is open with no conditions – all ICT companies are encouraged to join.  The first meeting of the consortium will take place in February.

This sounds like an ambitious but necessary (and perhaps inevitable) initiative.  Whilst ICT’s most valuable role will be in helping the rest of the economy reduce greenhouse gas emissions, there is the danger that it’s own energy use will also spiral upwards.  If ICT is going to help re-structure the economy then it would do well to start with its own industry, which is what the consortium is trying to do.  It needs more IT/networking companies by the look of it, though. 

Join up now.

DoE energy efficiency grants

PC World has reported some of the winners of the grants from the US Department of Energy (DOE) for green ICT projects that were awarded last week.

A total of $47m of grants were announced for 14 projects as part of the American Recovery and Reinvestment Act.  The federal funds will be matched by $70m in private funding and will go to projects focused on improving equipment and software; minimising the power loss and heat generation in the power supply; and research on cooling equipment.

Projects included:

• Yahoo, which received $9.9m to design a data centre that will use outside ambient air for cooling.

• HP was awarded $7.4m to test a new data centre design.

• Alcatel-Lucent received $1.8m to test and develop heat-sink structures and device-level liquid cooling technologies.

• IBM benefitted from two grants, $4m in all, for projects to develop liquid metal thermal interfaces for data centres and to develop software-based cooling tools.

Great news for the companies involved and a productive use of the stimulus package funds.  It may not be much, but it’s more than seems to have been made available in Europe.  Certainly in the UK and France no such money has gone towards developing green ICT, which is very short-sighted.  The UK government seems to see ICT much more as part of the problem than a potential help with the solution.

Greenpeace – latest green electronics guide

Greenpeace has released the 14th edition of its Guide to Greener Electronics.

Nokia remains in the top slot and Sony Ericsson has moved into second place as the result of Samsung having a penalty point deducted for ‘backtracking on its commitment to eliminate brominated flame retardants (BFRs) in new models of all products by January 2010 and PVC by end of 2010’.  Samsung is one of four companies that now have a penalty point deducted for similar reasons, the others being LG Electronics, Dell and Lenovo.

In terms of score change since the last edition, the three biggest changes were:

• Samsung down 1.8 points and seven places in the rankings due to the penalty point and a lack of a methodology for further restrictions of hazardous substances.

• Dell down 0.8 points and two places also due to commitments on hazardous materials and also for not verifying its 2009 greenhouse gas (GHG) emissions from global operations and not supporting global calls for emissions cuts.

• Fujitsu up 0.8 points and one place mostly for supporting the call for reductions in GHG emissions.

Lenovo, Microsoft and Nintendo now bring up the rear of the table.

On the whole I support Greenpeace’s electronics guide, although how you judge companies is very subjective – Greenpeace focuses very much on the use and disposal of hazardous materials.  The chart below gives some indication of how companies are scored.

 

What I particularly like is that the criteria are updated from time to time, which means it’s something of a moving target for vendors, but then you can say that about the green ICT market as a whole.  For this edition, for example, criteria have been amended to reflect the latest Energy Star requirements and actively lobbying for the restricted use of specific chemicals has been added as a scoring factor.

What I don’t like is the way that some of the scores are reported.  The penalty points, for example, continue to be the headline factor for some companies every month.  It’s disingenuous to say that ‘Dell’s score has plummeted due to the penalty point imposed’ two months in a row – it was only deducted once.  It’s more interesting to know what led to the additional fall in score.

In fact what would be useful is for Greenpeace to show the companies’ scores over time, so we can see what progress they’ve made.

EPEAT ups the pressure

EPEAT (Electronic Product Environmental Assessment Tool) the green electronics rating system from The Green Electronics Council in the US, has ratcheted up the Energy Star requirement for registered products.  It’s the result of a revision of the underlying IEEE 1680 standard and will be permanent.  Any EPEAT registered products that do not meet the current ENERGY STAR 5.0 standards will be ‘archived’.

EPEAT originally allowed a listed product to remain on its registry for up to six months following a new Energy Star specification. But as of now all EPEAT products must meet the most recent Energy Star specification immediately to remain on the registry.

EPEAT has made a lot of ground in the last year and is the clear leader in assessing how green IT products are.  The program evaluates computer desktops, laptops and monitors on 51 environmental criteria.  Thin client devices and workstations were added in 2009 and new standards for printers are being developed.  EPEAT now covers 41 countries and includes over 40 manufacturers and more than 1,000 registered products.

But EPEAT’s real strength is that it’s a purchasing requirement for all US Federal Agencies, which has resulted in other governments following suit.  The standard has been integrated into hundreds of government, education, health care and enterprise IT contracts worldwide.

Green ICT is an area crying out for standards so that ICT users can confidently adopt the best processes, practices and technologies.  EPEAT has certainly achieved that around the products it evaluates.  It’s good to see the rules getting stricter.  It just needs to be expanded to as wide a product base as possible and as soon as possible.

Green business process simulator

Lanner, a company that provides technology to support business process improvement, has added sustainability parameters to simulation software

The company has launched a new edition of its Witness ‘Power with Ease’ software, its flagship process simulation solution.  It’s designed to help businesses simulate options and make operational decisions to maximise performance levels whilst reducing energy consumption and carbon emissions.

The Witness solution apparently allows users to choose the most relevant metrics for modelling, be it emissions levels or energy type, in whatever units are required.  The results can be compared with business performance to create the optimum balance with environmental impact.

Basically, this is a stand-alone product aimed at the top end of the Carbon Emissions Management Software (CEMS) market.  This is the green ICT sector that is coming increasingly into focus and expecting dramatic growth in the next few years (as my last two blogs indicate).  It’s no real surprise, then, that we will see a short-term fragmentation of the market – Lanners solution is part of that fragmentation.

CEMS covers a multitude of capabilities, from carbon counting, monitoring, managing, modelling through to trading and offset management, with variations for company sizes.  There will be different flavours for different industries and solutions will come as stand-alone packages, modules for enterprise solutions and in a software-as-a-service form.  Fragmentation is inevitable as companies fight for a slice of the action in a new market, but with rapid adoption, particularly if driven by legislation, it will mature and consolidate fairly quickly.  It’s going to be quite a battle ground for suppliers.

CEMS market forecast

Pike Research has published a report on the carbon management software and services market, which highlights the expected growth in the sector in the coming years.  Full details are here.

The report estimates that the market was worth more than $380m worldwide in 2009, but will grow at a compound average growth rate (CAGR) of 40.2% between now and 2017.  In the short term, i.e. 2010, the market is expected to grow 73% worldwide.  Western Europe has the largest slice of the action with estimated spending of $297m expected in 2010 and an annual growth rate of 37% (I think from 2008 to 2017, but the Management Summary is not clear).  By 2013 North America is expected to become the leading marketplace.

According to the report, two thirds of the market is services and the rest software.  The software market reached $132m in 2009 and will grow to over $1.2bn in 2017 (a CAGR of more than 37%), whilst the services market - consulting, implementation and outsourcing – was worth $248m in 2009 and will grow at a a CAGR of 41.5% to reach over $3bn in 2017.

The increasingly tough regulatory environment is seen as a significant market driver, particularly in Europe and Asia/Pacific.  Whilst every industry is impacted, the report finds that the energy, manufacturing, government, and retail sectors have come under most pressure to manage their emissions as the result of  a combination of regulatory, supply chain, brand equity and cost efficiency factors.

Most of this is as you would expect.  It’s a small market, but growing rapidly for lots of good reasons and becoming a significant part of the green ICT sector.  Nor am I surprised that two thirds of the revenue is services in 2009 – there are lots of large companies out there that really don’t know how to set about counting and managing emissions and need help.  Beyond that, though, I think the ‘services’ aspect will be primarily software-as-a-Service (SaaS).  This is an ideal market for an online solution, given the various regulatory environments, reporting standards, methodologies, conversion factors, etc. that companies will have to use and adopt.  Using an online service takes away a lot of the complexity and hassle and most main offerings are SaaS solutions. 

I suspect that the consulting element will fall away as companies become aware of methodologies and use increasingly sophisticated software not only to count and manage emissions, but to model business changes and different emissions scenarios.

C3 - heavyweight CEMS start-up

US blog GreenBeat has reported that a new start-up software company, known as C3, has brought in $26m of an anticipated $43.4m third round of venture funding, according to a filing with the SEC.

C3 is apparently developing enterprise software to help companies keep track of and reduce their carbon emissions, which means it’s joining an increasingly crowded Carbon Emissions Management Software (CEMS) market.

What’s different is the people behind it.  The company was founded by Thomas Siebel, who sold Siebel Systems to Oracle for $5.7bn in 2005, and it has former US Secretary of State Condoleezza Rice and former Secretary of Energy Spencer Abraham on the board.

What’s really intriguing is that this is a very conservative cast list.  As well as the Republican politicians, Siebel himself was apparently a major supporter of Sarah Palin during the election.  But the Republicans in the Senate are against any cap-and-trade system, which is the major driver for the CEMS market.  So even those who have reservations about climate change legislation recognise the business potential in the green ICT!

Of course the CEMS market covers a lot of flavours, from simply carbon counting through to managing emissions, scenario testing, trading, ensuring security, etc. so maybe C3 will carve a particular niche in the global market.  With that sort of backing I guess it won’t be long before we hear more.

LG’s green fortunes

It’s challenging times for an electronics conglomerate in an increasingly green world, as two recent stories about Korea’s LG Corp reveal:

• LG Electronics became the first company to be awarded the UL Environment Sustainable Product Certification (SPC) for high tech equipment, thanks to the LG E2350VLED LCD computer monitor, which is to be launched at the 2010 International Consumer Electronics Show in Las Vegas this week.

It’s the first product to complete UL Environment's independent, third-party certification for meeting the IEEE 1680 environmental performance benchmark for consumer electronics, which includes Energy Star requirements.

UL Environment (ULE), is a subsidiary of Underwriters Laboratories focused on developing standards and independent third-party assessment and certification.  Underwriters Laboratories has apparently been testing products and writing standards for more than a century and ULE is pushing those standards into the environmental arena.

• The bad news is that the US Department of Energy (DoE)plans to remove the Energy Star label from some LG fridge-freezer models.

It seems that the DoE has been bearing its teeth recently in terms of enforcing Energy Star accreditation and some LG fridge-freezers have been banned from using the label as a result.  This seems to be a long-standing issue, but the DoE proceeded after “ … multiple independent labs have confirmed that when certain LG French-door refrigerator-freezers are tested using existing DoE test procedures, they do not qualify for the Energy Star program”.  In response, LG is now suing the DoE.

• But in the dynamic green market, where there are challenges there are also opportunities, and LG is going for it. 

At the end of December the company announced the launch of a new business initiative with the unveiling of a solar cell production line capable of delivering around half a million solar modules a year with a total capacity of 120-megawatts (MW), the equivalent energy needs of 40,000 homes annually.  A second line will follow in 2011.

“LG intention is to become a global player in the world’s solar industry through a combination of our mass production expertise and strict quality control system,” said Kwan-shik Cho, vice president of Solar Business Team at LG Electronics.  The solar market is estimated to be worth around $11bn, 80% of which are the crystal-line solar cells that LG will be manufacturing.

This is a competitive market, but then again the long-term opportunities are huge and LG is the sort of company that can carve a slice of the business.

 

LG’s fortunes show how companies (of all sizes) have to fight on a number of fronts to maintain their green credentials and take advantage of the opportunities.  Anyone who thought the issues of climate change and sustainable business boiled down to ticking boxes and a different marketing focus is down for a rude awakening over the coming years.  It’s probably more true of the green ICT market than anywhere else.

France’s carbon tax falls at the last hurdle

It did seem that France would buck the trend by opting for a national carbon tax, an idea strongly supported by French President Nicolas Sarkozy.  But the law was judged unconstitutional just two days before it was due to come into force on January 1st 2010.

France’s Constitutional Council found that the law was unfair because it would have penalised households, particularly those dependent on cars, but did not include many industrial polluters – 93% of emissions from industry would not have been taxed.  However, many of these high-emissions businesses are already included in the EU cap-and-trade Emissions Trading Scheme (EU ETS).

The proposal was for a tax of €17 per tonne on oil, coal and gas consumption, although green groups wanted it to be higher.

The tax was expected to raise €1.5bn in 20101 for the French state coffers, which may be one reason why the French government has said that it would put a revised version of the legislation before parliament next month.

The bill will be reformed, particularly as it applies to industrial sectors.  The implication is that some of the business exemptions will be removed, but the expectation is that a lower tax will be applied to businesses to ensure their continued competitiveness.

It’s a good example of the shifting sands of national legislation (and why Copenhagen was so important).  I guess the tax was aimed at households in order to ensure that businesses remained competitive internationally.  That’s the issue that only a strong global agreement can resolve.

I may be biased, but it does seem to me that something more like the UK’s Carbon Reduction Commitment, aimed at businesses with a specific level of emissions, would be more effective in the long run.

If the new version of the French solution does end up being more aimed at business then it’s likely to give a boost to the green ICT sector.  Companies will be looking to greater business efficiencies, carbon counting solutions and more energy efficient hardware to reduce their liability under the law, although much will depend on the tax level.

Jimjams flim-flam*

Audio conferencing provides opportunities for people to work from home and take part in meetings without colleagues knowing where they, what they’re doing or how they’re dressed.

According to a survey from BT Conferencing, more than 68% of us have dialled into a conference call at home wearing pyjamas, almost half of us called in our undies and, apparently, 20% just didn’t bother with clothes at all. With BT handling 15 million audio conferences a year in the UK alone, involving 60 million participants, that’s an awful lot of conversations between barely dressed people.

That’s not all, there were also some bizarre locations for calls. The most popular place is actually from bed (which explains the jimjams) followed by (and I kid you not) the toilet. Outside the home a train or a car is common and the ski slopes or the beach are not unusual. While you’re on the call you may also be cooking, changing nappies, feeding babies, shopping, painting the ceiling, getting waxed, having a massage or getting your feet done at the chiropodist.

It does, though, go to show that some green ICT benefits are unexpected. We know audio- and video-conferencing can cut down on the emissions from travel, but who would have thought it would also reduce the need to wash clothes?

Finally, as someone who has spent a large part of my life working from home, I just want to reassure colleagues and clients that this is not a scenario I recognise (and frankly, I don’t really believe it). Those I speak to on the phone, conference call or otherwise, can rest assured that I’m fully dressed and at my desk (unless, of course, it’s on the mobile …).

But it might all be changing anyway. The use of high quality video conferencing, where you can see the other participants as if they were in the same room, is growing fast. Ovum expects 26% of conferences will be held by video by 2012.

(*Jimjams – Child’s word for pyjamas in the UK. Flim-flam - ‘Talk that is confusing and intended to deceive’.)

Smart grid forecasts

• A report from Pike Research forecasts that worldwide revenue from smart grid infrastructure (that’s primarily what will need to be invested on the energy providers’ side) will grow from $10bn in 2009 to reach a peak of $35bn in 2013. Overall the market will attract $200bn in investment between 2008 and 2015.

The chart below shows the company’s projections of where the money is going and the report points out that although much of the market attention has been on metering infrastructure, this is a relatively small part.  Grid automation initiatives will capture 84% of investment through 2015, compared with just 14% for advanced metering infrastructure (AMI) and 2% for electric vehicle management systems.

 

The report also makes the very pertinent point that ultimately the success of smart grids is dependent on consumer behaviour, government policies, financial stability of utilities and energy suppliers, cooperation between industries and also between technologies.  On the other hand, there are also a lot of momentum behind the initiatives.

The motivators cited include: improved reliability and security, improving operating efficiencies, balancing power generation supply and demand and reducing the environmental impact.  What’s holding things back is a lack of common vision and standards, inadequate business and regulatory models and lack of public awareness and acceptance. 

• A report from Zpryme takes a broader view of the market and provides more detail of the ICT element.  It predicts an overall smart grid market growing from $69.3bn in 2009 to $171.4bn in 2014, a compound growth rate of 14%.  The US market is expected to grow from $21.4bn in 2009 to $42.8bn in 2014 (14.9% growth rate).

 

It concludes that in 2014, 89% of the market ($152.3bn) will be comprised of devices, hardware, software and communications equipment.  These are the products needed for the infrastructure and communication systems which will build, link, monitor, manage and secure the smart grid.  IT hardware and software and integrated communications are expected to be worth $66.8bn in 2014, that’s a compound growth rate of over 21% between 2009 and 2014.

Given the investment going into the market around the world, the report makes the point that hardware and software company with the resources and a flexible knowledge base should explore product opportunities in the smart grid sector.  Can’t argue with that!

 

 

So it’s hard to be precise about what the smart grid market is, let alone how big it is and how fast it’s growing.  But it’s fair to assume, based on the above reports (and I see no reason to doubt it), that the ICT element in smart grid implementation is growing at an annual rate of 20% plus, and likely to continue at that rate for five years or more.

That makes it a very attractive market for any ICT company coming out of a recession and one that few should ignore.  Even if there seems like no opportunities now, looking at the long term implications of smart device infrastructure and communications opens up endless possibilities for the future, which need to be investigated by any enterprising ICT company.  It’s certainly the best long-term green ICT market, as many of the large players have realised.  Those with relevant specialist experience in the market, such as Logica, will reap the benefits.