Green Report Cards - A Glance

JUNE 4, 2010: ENVIRONMENT is a word that has clearly etched its place in corporates now. Whether it’s a lip-service they have to endure, or fake corporate responsibility garb they need to wear; whether it’s the law-maker’s whip they are worried about or the customer’s image of their brands; or as in some few and far between cases, where thankfully green responsibility is something they seriously care for; ‘environment’ matters.

And one small but strong sign of that is way ‘Sustainability Report’ cards have started flashing from many industry majors. Not only that, even analyst eyes are taking an incisive look at the way green miles are being clocked in business.

Green Accounting — Paper, Flights, Cars, Data Centres et al

BT, a name to reckon with when it comes to communications solutions and services, has recently opened the doors for the world to have a peek inside its sustainability performance.

The BT Sustainability report 2010 shows how Co2 equivalent emissions have come down from 1.6 Mtonnes CO2 to around 0.8 Mtonnes in 2010.

It tells in the report that BT closely monitors energy consumption from electricity, gas and fuel oils across our estate.

“Using extensive electricity and gas meter reading systems we collect and analyse data at half-hourly intervals from over 6,000 meters. The system includes a network of nearly 9,000 electricity sub-meters that allow us to accurately monitor electricity consumption at its point of use, enabling us to identify waste and give users detailed feedback about their electricity use.”

Energy consumption for BT (excluding metered tenants) in UK network and estate decreased 2.3 per cent during the 2010 financial year to 2698 GWh compared to an increase of 2.5 per cent in the 2009 financial year.

The report also highlights some trends in energy use at BT. Its electricity consumption reduced by 2.4 per cent in the UK compared to 2009. The reduction was largely achieved through energy efficiency measures and capital investment programmes in its networks, data centres and offices, as the report reveals.

SAP, the enterprise software major too came out with a report card on sustainability. In conjunction with its Q1 earnings report on April 28 2010, it offered preliminary insights into the company’s greenhouse gas (GHG) emissions for the quarter. 

The SAP Sustainability Report, in SAP’s own words, illustrates the company’s sustainability commitment. It also shows that sustainability has a sound business case and can pay significant returns to businesses, according to the company.

When it comes to green bean-counting, SAP acknowledges carbon emissions as a proxy measure for inefficient operations and excess spend.

It says that during 2009, it has reduced overall carbon footprint by 15 per cent, well ahead of targeted goal of five per cent. “This performance was achieved through internal measures and was also impacted by the economic crisis on our business.  We did not buy off-sets.  Our performance generated bottom-line savings of about €90 million.”

SAP’s figure-watch spells out the various ways it is attempting to cut carbon flab.

Business flights are a significant contributor to SAP’s carbon footprint, and it set a goal of reducing the number of flights by five per cent compared to 2008.  In 2009, it achieved this target by delivering a 30 per cent reduction in the number of flights, lowering emissions from business trips by 54 kilotonnes.  “We partially achieved this goal by revising our global travel policy. Employees are advised to avoid travel and travel by train where possible.   Additionally, we expanded our virtual meeting capabilities by installing high-resolution teleconferencing solutions and encouraging virtual meetings and conferences. We include both stationary and mobile energy sources to account for likely shifts in energy usage.  We did not have an overall goal for reduced total energy consumption in 2009.  However, a series of related efforts enabled us to reduce energy consumption by eight terajoules from 2008 to 2009.”

The energy dashboard was not limited to flights in 2009. It covered on-ground fleets, as the company shared.

“SAP operates a large fleet of 17,815 corporate cars, including 11,386 leased and company owned vehicles in Germany.  We established a target of reducing fuel consumption from our German company cars by 2.5 per cent. However, our German car fleet grew by about nine per cent as employees hired in 2006 became eligible for a company car.  As result, we fell short of reaching our goal. In 2009, corporate cars caused 105 kilotonnes of emissions, representing 25 per cent of our overall carbon footprint.”

It set a 20 per cent paper reduction target as an important metric for engaging employees. By the end of 2009, SAP achieved a 25 per cent reduction in printed paper, exceeding our target and reducing emissions by 1 kilotonne.

HCL, another IT major, is using its Green DC Services that has impacted cost savings for the enterprise by saving power to the tune of 11334 KW in a year which is equivalent to 22,500 cars off the highway, 300,000 trees planted, 133,140,990 lbs reduction in carbon emissions, reduced 15000 Servers through virtualization and annual Energy cost savings of $ 10 million.

Future guidelines

Companies have also started chalking out clear, numbers-laden, specific roadmaps on the green journey.

In the report card BT says that improving the energy efficiency of our buildings and equipment is our highest priority. “Next we look for opportunities to generate renewable energy, for example we plan to generate 250MW of wind power by 2016. We have long-term goals to reduce our energy use and impact on climate change by improving energy efficiency and using more renewable energy."

SAP also notes in its report card, “Across the next three quarters we will continue to work towards our established GHG emissions goals through on-going efforts including: improving energy efficiency in our buildings and in our data centers via virtualization, the purchase of renewable electricity, limiting paper waste, and initiating strategic partnerships."

In terms of its long-term commitment SAP highlights intent to lower  total carbon emission to the level of 2000 by the year 2020. This represents an overall reduction of 50 per cent compared to the peak year 2007. “We do not plan to apply carbon offsets to reduce our scope 1 and 2 emissions. Our annual targets are to reduce our carbon emissions by five per cent compared to the previous year’s target.”

HCL plans to differentiate its Tier 3+ equivalent New Jersey Data center by offering value add services such as industrialized delivery services, shared storage and backup, shared networks and security services and also cloud based services.

No doubt Environment industry was pegged some time back to reach Rs 207 Billion by 2013 as per Frost & Sullivan.

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But, but, but…..

The efforts may be worthwhile, but experts have started questioning the very direction of environment-oriented corporate endeavours.

“Most CIOs have looked at sustainability through the narrow lens of ‘green IT’ — the energy consumption and CO2 emissions directly tied to computing and communications. What they’re missing is the critical role that IT can play in supporting green practices across the entire organization.” feels Warren Wilson, Ovum’s senior analyst based in Washington

His argument is cogent enough. Coming to ‘sustainability’, most companies have not given serious thought to sustainability policy across the business have to yet see closely their energy usage patterns and study them in a fine-grained way as what process can cause green issues.

Green IT, as we tag it is about the two per cent of energy/carbon directly attributable to computing and communications. As soon as “green IT” is mentioned, people automatically think of the conventional definition and have difficulty holding onto the notion that it’s “the other 98 per cent” — the energy used / carbon emitted by manufacturing, buildings, logistics, etc. — that offers the larger opportunity for IT. Yes, we need to make computing and communications more efficient, but we have to focus on the big energy consumers / carbon emitters to find the big cost savings and carbon reductions.

He advises that there are many areas like manufacturing, vehicle fleets etc where energy gets used and ERP, BI, SCM etc can provide a lot of visibility into that area of operations where one is spending large.