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Forrester Research's strategy for delivering research and services has changed to a role based strategy. All of the research and website design is focused on client roles. Therefore we are transitioning the bloggers on the Green IT Sourcing blog to “The Forrester Blog For Sourcing & Vendor Management Professionals,” and will no longer post content on this blog.
Fujitsu-Siemens has been working on Green IT issues for years, with its green thin clients, professional PCs, workstations, energy efficient servers and displays. However it has recently released a new green product aimed at consumers.
Amongst the "green certified" products, the first consumer orientated one has appeared on the market, as desktop PC named "SCALEO Li 2405 green edition". It is designed using components based on environmentally friendlier compounds (halogen-free mainboard) but also takes into consideration many other steps of its lifecycle. Transportation is minimised - with production and assembly sites in Europe. 90% of each PC is recyclable, the consumption figures are 20-27% lower than a "standard" PC and hold the Energy Star v4 Label from the EPA, which was previously mainly used on computers in the business world.
The introduction of the SCALEO Li 2405 marks a shift from the focus on end of life recycling or disposal to a more complete life cycle management approach in the IT consumer goods… Expect an increase of products in this space… With tangible benefits of lower power bills and “guilt free” disposal, home consumers increasingly have the appetite to purchase these greener alternatives despite initial upfront added costs.
On October 25th, the Grenelle Environment Forum, a political meeting held in Paris, emphasized France’s growing awareness and ambitions on environmental concerns. France wishes to set the standard and lead the way on matters of sustainable development. The Grenelle is said to be a beginning, but considerable steps taken seem to be encouraging, such as following, to name a few:
•The “carbon cost” of any major public project will now be studied, with a warning that projects with excessive environmental costs will be rejected altogether.
•From now on, non-ecological projects will have to prove they cannot be carried out any other way.
•Waste management is to be enhanced, with focus on design, packaging and recycling.
•Energy requirements are to be reduced (by 20% by 2020)
•95% of energy production is to be without carbon emissions by 2020
•Transportation is to be rethought to minimize cars, encourage pubic transport, bicycles, fast trains, etc.
•All new buildings built in France should comply with the so-called "low-consumption" standards by 2012. By 2020, all new buildings should be energy positive and produce more energy than they consume.
Regarding electronics and household appliances, measures will also be taken to counteract the exponential increase in energy budgets. One of those is to phase out appliances that consume the most energy (through their prohibition), as soon as alternatives become available at a reasonable price. This rule will start being applied by 2010 with the banning of incandescent light bulbs and single-glazed windows, for example. Energy efficiency labeling of electronic appliances is also to be generalized.
The current taxation system is also said to be rethought. One of the ideas is to make sure that when a clean product is available, it will be less expensive than a polluting alternative. The creation of a lower VAT rate on all ecological products that protect the climate and biodiversity is being considered to those effects.
Although the Grenelle Environment Forum was seen as merely a political show by some, with other political parties remaining dubitative overall, it seems fair to point out the increasing importance of environmental concerns in general. With time, both businesses and households will have to evolve and follow the Green trend. Businesses will have to re-think their environmental policies, focus on sustainable development issues to abide by the new laws to be established in the near future. Environmental matters will clearly also have to be considered in general procurement decisions.
These initial steps are encouraging and mark the growing awareness and ambition of environmental concerns across Europe.
Latest estimates calculate that
energy consumption globally from IT accounts for 2% to 4% and in the UK between 10% and 12%. IT definitely
has a role to play if the UK Government has any chance of hitting its ambitious
climate change goals. CIO’s must work to reduce the environmental impact of
computing right through the business from back office data centers to the
corporate desktop. Carbon audits, reconfiguring data-centers, deploying
equipment with power consumption sensors, upgrading power supplies all help but
only scratch the surface of what needs to be done however. Long term goals
around server/infrastructure virtualization, data-center outsourcing,
thin-client computing, tough supplier benchmarking and even building incentive
schemes that reward IT for low energy consumption should appear on the CIO
agenda. The UK government has
a role to play however and perhaps follow the US (yes, the US) where state
tax incentives for example, encourage the procurement of energy efficient
hardware.
Forrester has been exploring some of the fiscal incentives to drive Green IT behavior. Initial desk-research findings suggest a stark difference between North American and European countries in this space.
While Europe appears out in front with legislative directives such as WEE, ROHS, EuP, etc., it has not yet implemented attractive economic incentives to further motivate IT purchasing behavior of traditionally low emitting business. North America appears slightly ahead of the game here, with tax incentives and utilities rebates on-line or in place for the greening of IT. For example, PG&E — a Californian utility company — offers rebates from $300 to $600 for each server eliminated through the use of Sun or VMware virtualization products. However, the overall impact of current European government measures will hardly influence the behaviors of IT end-user businesses in the near future if the focus remains that of restrictions and not incentives.
It will be interesting to see how the European situation changes in the next year, what various governments will focus on, and whether Europe will be following the US Environmental Protection Agency’s steps on tax incentives.
While the Carbon Disclosure Project (CDP) praised low carbon sector industries for the nuance of their responses to the CDP5 questionnaire, many of these responses appear rather shortsighted or incomplete in nature.
One FT 500 company in the IT sector had an almost apocalyptic response to the CDP’s question to what commercial risks climate change present to the company: “Losses could also be caused by power shortages, telecommunications failures, water shortages, tsunamis, floods, typhoons, fires, extreme weather conditions, medical epidemics, and other natural or man-made disasters, for which we are predominantly self-insured.”
Yes, natural disasters could increase with continued Green House Gas (GHG) pollutants, but such an offhanded, sweeping laundry list of natural disasters serves only to minimize the commercial and environmental impact of this phenomenon.
At a time of increasing energy prices and a rise in environmental consciousness, vendors certainly need to talk the “green” talk, but help is needed to link these words to reality and a framework that connects with its targeted audience, i.e. IT and sourcing professionals, who while socially responsible, are charged with delivering business solutions that enhance their company’s market position and financial performance.
In lieu of platitudes, discussion of potential commercial risks brought on by climate change must be framed in the context of its material impact to business continuity and those solutions currently available or in development by ICT vendors to help mitigate those risks for itself and its customers.
The US Environmenatal Protection Agency noted recently that servers and data centers in the US accounted for 1.5% of the country's electricity consumption in 2006. This amounted to around $4.5bn worth of electricity, more than double that consumed in 2000. Survey respondents put the blame partly on the lack of visibility about the issue. Around two-thirds said that an industry standard on energy efficiency for IT equipment would prompt them to change their procurement policies.
My take - we need supply chain benchmarks which are trusted and respected by both vendors and customers...
Computer, Telecom, and IT Services providers make the Climate Disclosure Leadership List.
The Carbon Disclosure Project (CDP), an association 315+ global institutional investors with over $41 trillion in assets, released its 5th annual report on corporate Green House Gas (GHG) Disclosure last week in New York amidst the fan fare of speakers such as Harold Ford the former US President Bill Clinton.
A notable observation in this year’s report was the increase in reply rate from businesses in low carbon sectors such as banks and computer and IT related firms. This group in fact led the pack in the nuance of their responses, frequently citing opportunities to capitalize on going green, with Sun Microsystems going a step further in its well timed launch of its OpenEco.org site — a web community offering tools for businesses to better manage its green house gas (GHG) emissions.
Key observations on the 61 IT product and services firms invited to participate:
- 80% participation rate
- 44% acknowledged a commercial opportunity
- 34% have an emissions reduction program implemented
- 11% made the coveted Climate Disclosure Leadership List — a distinction given to companies that exhibit keen awareness of the risks and opportunities of climate change.
Full report summaries can be found at http://www.cdproject.net/cdp5reports.asp
An interesting brief from Sun at Forrester’ London office led to the question "who'll control green IT?" The answer given was Finance rather than the CIO.
Increasingly IT operations reports to Finance and Finance takes care of building facilities and governance—three things that play strongly on the green agenda. Finance will see green IT in terms of cost reduction gained through energy efficiency. A green IT strategy must therefore pull facilities into the mix as these are the guys that sign off the power bill each month and are acutely aware (or should be) just how much money is spent every quarter on energy.Facilities understands the impact that desktop computing and desktop gadgets will have on the energy bill and will need to work with sourcing for example, to deploy the right procurement framworks. But with an eye on green governance and upcoming legislation (check out the UK Energy white paper for an example) Finance has a key role to play in making green IT happen. Does our research and the way we position it recognize this? .
North America and the EU aren’t the only regions seeing Green. In an era of global trade that exports corporate regulations and social consciousness, almost as seamlessly as it does physical commodities, all regions are potentially impacted by the green growth spurt.
In a conversation with the Australian Global Technology Services (GTS) group at EDS Euan Davis, Tim Sheedy, and I had an opportunity to gain some incite into how and why EDS would “go Green” in Australia.
The initiative:
The EDS GTS-Australia goal is to reduce its carbon usage by 25% over the next three years by:
- Developing global initiatives to increase productivity and efficiency
- Providing mechanisms to address employee carbon usage, and
- Developing a set of service offerings that will allow EDS’ customers to reduce their impact on the environment.
This is a regional, not a global initiative for EDS, driven seemingly by the share will of its Australian GTS Managing Director, Chris Mitchell. When asked for the rational or business case made to fund this initiative, Chris replied by stating it was something he believed in, “something that was going to affect us all, and something that is very much in the minds of the next generation”. For him, driving an eco-sustainable business was “about driving change”.
While commendable, and socially responsible; such initiatives, with a huge upfront outlay of costs, are not likely to be funded, yet alone be successful, without a sound business case to drive stakeholder buy-in and create value in the space. Thus it makes sense these first steps be championed by individual drive. Besides, containing these initial efforts could make sense to EDS as a whole by serving as a proving ground for the green IT Services market.
EDS GTS-Australia has already launched a somewhat aggressive Green campaign, with advertising spots in National Geographic and
Sydney’s Earth Day sponsorship (complete with conciliatory displays of 70% lights out on the day). However, its green credentials are not yet established and offer little material difference from the actions of shrewd firms that actively pursue means of reducing energy costs – a very fiscal motivation.
EDS has moved its Australian HQ to a 5 star energy building and installed new video conferencing systems which it hopes will reduce its domestic air travel by 20 – 30%. It is currently working with a 3rd party organization to help it identify its baseline carbon emissions, and partnerships with carbon offsetting firms in Australia and New Zealand to reduce net carbon emissions, a scheme they intend to extend to employees with a $ for $ matching incentive.
And while EDS indicates it is working with its Agility Alliance partners to introduce more green offerings, it has not yet begun to take the eco-sustainability story to its clients. Interestingly, Chris points that it is still early days for that with clients not ready to pursue such efforts until the economics are in place.
However, if this is indeed about changing behavior (at both the individual and business level), EDS will have to begin taking, selling even, their story to their client base. And there is a story to sell here.
After all, as outsourcers, all EDS internal green efforts effectively become the green efforts of their clients. Promoting that outsourcing externality could and should create a rather lucrative market for the Green IT Service provider.
