IT departments to lead organisations to sustainability

Green IT moving from reducing environmental impacts of IT itself to enabling sustainable organisations

A new research study, published today by Deloitte and CFO Research Services, shows how green IT is moving from a cost reduction initiative to an enabler of corporate responsibility and sustainability. It illustrates how some of the world’s leading organisations are deploying green IT strategies to reduce energy use, cut carbon emissions and mitigate exposure to risks associated with energy price volatility, pending regulatory demands, and increased transparency and reporting requirements.

The report,  The next wave of green IT, surveyed senior finance and IT executives at 353 large enterprises with revenues of $500 million to more than $10 billion throughout Europe, North America and China to explore how they view IT’s role in the future of enterprise sustainability. UK organisations include Lloyd’s of London, the Department for Environment, Food and Rural Affairs (DEFRA) and the John Lewis Partnership.

Key findings

• 32% of respondents have a formal green IT program in place, while 34 percent are planning to launch a green IT program within a year.
• 66% of respondents say their company has at least 5 percent of their IT budget set aside for green IT projects, 36% say they’ve allocated 15 percent or more, with 14% spending more than 25%.
• 67% of respondents say their company has a formal program in place for measuring, monitoring and improving its environmental performance.

John Winstanley, an Associate Partner at Deloitte and head of its green IT consulting practice said: “As a major consumer of electricity and producer of waste electronics the IT department was one of the first business functions to be scrutinised and then forced to improve its efficiency and lessen its environmental impact. IT typically produces 2% of an organisation’s CO2, now it will have to turn its attention to the remaining 98%.”

Other findings of the Deloitte/CFO Research Services report:

• In the last year, 48% of organisations surveyed made incremental efforts to reduce their impact on the environment. 43% have made aggressive efforts.
• 75% of respondents say a formal review of business impact on the environment has been conducted in the last two years.
• 46% charge the cost of electricity for IT directly back to departments thereby increasing accountability for its usage.

The writing is on the wall

The next wave of green IT in action. The next wave of green IT reveals how some companies are elevating green IT strategies to an organisation-wide level.

• Caterpillar, a manufacturer of earth moving and construction equipment, is using high-tech computer modelling to improve the efficiency—and thus reduce the carbon output—of their supply chain, manufacturing processes, distribution and transportation management.
• When improving data centre efficiency, Intel took the heat its servers produced and redirected it to warm the cafeteria and the restroom water supply, thus lowering the company’s total carbon footprint.
• HSBC examine their whole supply chain from procurement to disposal to get higher environmental performance from their partners. HSBC incorporates environmental elements into procurement criteria to ensure the equipment they buy is energy saving.
• The John Lewis Partnership is running Unix machines in production at circa 80% utilisation, this means they are using a half to a third of the number of machines to accomplish the same tasks as some other organisations.  The John Lewis Partnership has reduced its carbon emissions commensurately.   

John Winstanley said: “Leading companies realise they must begin to establish sustainability strategies in order to ensure their long-term viability. In the UK legislation in the form of the Carbon Reduction Commitment is coming that will legally oblige some companies to establish them.

“These strategies should include understanding of the cost of carbon and where to best deploy resources to reduce carbon outputs, facilitating compliance with regulations, managing risk by reporting accurately on sustainability initiatives to avoid penalties, making the company more attractive as a place of employment for environmentally sensitive employees, improving supply chain performance and better managing energy consumption.

“While broad-ranging, these strategies all share a common denominator: they are powered by information. IT will have to lead the way to help business understand its sustainability performance and how to improve it. Thus IT is being thrust to the fore as an enabler of corporate sustainability.” 

Winstanley concluded: “Pending regulations will make environmental and social performance integral with economic and financial performance and they will become major imperatives of global business.”

Ends

About the Carbon Reduction Commitment
The Carbon Reduction Commitment, the first wave of UK environmental legislation (CRC) that will regulate a broad range of organisations’ CO2 emissions will come into effect in April 2010. It will require some companies to deploy far more stringent carbon strategies and is expected to involve around 5000 large organisations including schools and local authorities and legally oblige them to participate in a revenue neutral carbon trading scheme.

The Carbon Reduction Commitment (CRC) is a proposed mandatory cap and trade scheme that will apply to emissions not covered by Climate Change Agreements or EU Emissions Trading Scheme (EU ETS) from primarily large non-energy intensive organisations (those with electricity use of 6,000MWh per year through half-hourly meters in Great Britain and 70kW metering systems in Northern Ireland).

About The Next Wave of Green IT Study
CFO Research Services (a unit of CFO Publishing Corp.), in collaboration with Deloitte Touche Tohmatsu launched a research program to explore senior finance executives’ views on how large companies around the world are changing their IT practices in an effort to save money, improve performance and lessen their impact on the physical environment.  Survey respondents consisted of senior finance, IT and business unit executives at companies in Europe, North America and Asia with annual revenues of $500 million to more than $10 million.  The recently completed survey yielded 353 responses and in-depth interviews of 23 executives companies around the world.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms.

The information contained in this press release is correct at the time of going to press.

Last Updated: