Managing the company's carbon footprint - The emerging role of ICT A report from the Economist Intelligence Unit
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Managing the company’s
carbon footprint
The emerging role of ICT
A report from the Economist Intelligence Unit
sponsored byManaging the company’s carbon footprint
The emerging role of ICT
Preface
Managing the company’s carbon footprint: The
emerging role of ICT investigates the role of
information and communication technology in
lowering organisations’ carbon-dioxide emissions.
The report was commissioned by AT&T and Cisco. The
Economist Intelligence Unit bears sole responsibility
for the content of this report. The Economist
Intelligence Unit’s editorial team executed the online
survey, conducted the interviews and wrote the
report. The findings and views expressed in this report
do not necessarily reflect the views of the sponsor.
Richard Handford was the author of the report
and Clint Witchalls was the editor. Svetlana Issaeva
also contributed to the research. Mike Kenny was
responsible for layout and design. We would like to
thank all the executives who participated in the survey
and interviews for their time and insight.
February 2008
© The Economist Intelligence Unit 2008 1Managing the company’s carbon footprint
The emerging role of ICT
Executive summary
Climate change is a fact, and the scientific evidence of such consumption on climate change is important
so far seems to implicate greenhouse gases, such for consumers and businesses that use computing
as carbon dioxide, as the cause of climate change. equipment and servers. However, more importantly,
Since the industrial revolution, carbon dioxide it is a critical area for any company operating in the
concentrations in the atmosphere have gone from ICT field.
280ppm (parts per million) to 380ppm. Clearly, But the good news is that ICT companies have a
commerce and industry had a big role to play in variety of options for managing power consumption
this increase, so it is hardly surprising that, today, more efficiently, including such options as server
companies are under increasing pressure to clean up virtualisation and more energy efficient computing
their act. chips.
All industries are culpable, to some extent, for the The goal of this report is not to identify ways in
rise in greenhouse gases. At the moment, though, it is which ICT can become more energy efficient, but
the more obvious or visible offenders that are feeling rather to identify the variety of means by which ICT
the pressure to change—the oil industry and the can be used as a means to reduce carbon emissions.
airline industry to name a couple. But, as consumer For example, video and audio conferencing can
and regulatory pressure grows, all companies will be used to save on business travel, which in turn
be compelled to reduce their carbon footprint. Many reduces the potential of carbon emissions from
industries are already beginning to recognise the aeroplanes, cars and other modes of transport. In
need to manage their energy use as strategically as addition, the internet and digital collaboration tools
possible in order to reduce environmental impact. In make home-working a possibility for many millions
the information and communication technology (ICT) of employees, obviating their need to commute.
sector, for example, power consumption is high in Furthermore, scheduling software and radio frequency
areas such as data management and server demand. identification tags have made supply chains more
That means that understanding the implications efficient.
2 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
This global survey of 345 senior executives, this makes conferencing an attractive technology
conducted by the Economist Intelligence Unit on compared to other initiatives which may not deliver
behalf of AT&T and Cisco, aims to gain a deeper such direct benefits.
understanding of the how companies perceive and use
ICT as a tool for sustainability. The following are some Home-working is not widely adopted, despite the
of our key findings: tools being available to make it possible. However,
Braden Allenby, professor of civil and environmental
Despite the opportunities that ICT presents, only engineering at Arizona State University, found that a
36% of those polled said their organisation’s lot of home-working goes on under the radar. Home-
carbon-reduction strategy explicitly refers to the working is often ad-hoc and given as a perk to select
role of ICT in achieving targets. Clearly, senior individuals. Our panel is confident about the adoption
managers surveyed in this research do not yet of home-working and believes that many more people
appreciate the potential of ICT to help achieve carbon- will work from home in two years’ time.
reduction goals. Our panel believes that CIOs can play
a leading role in educating the board and other senior The CIO is underutilised as an agent for change.
executives about the use of technology in reducing With 39% of companies having a green strategy
CO2 outputs. in the pipeline, the CIO is uniquely positioned to
demonstrate the benefits—as outlined in this report—
Web and video conferencing are the most popular that ICT can bring to the table.
tools for reducing the organisation’s carbon
footprint. Part of the attraction of audio, video and
web-conferencing is that it is easy to measure the
resulting reduction in air or car miles following its
adoption. In terms of an internal environmental audit,
© The Economist Intelligence Unit 2008 3Managing the company’s carbon footprint
The emerging role of ICT
Introduction rewards can accrue from adopting greener policies.
In fact, 57% of our sample agreed that there are
commercial opportunities in having a carbon
The debate on climate change has moved beyond reduction initiative.
an argument about whether it is happening or not, Gary Hird, IT strategy manager at UK retailer, John
to a discussion about what can be done to tackle its Lewis, says an awareness of energy efficiency fits with
causes. Companies are conscious of their actions and the company’s ethos which emphasises responsible
many industries are working to address reductions capitalism and employee democracy. “I joined the
in environmental impact. Our survey reveals that the company in 1989,” says Mr Hird, “and one of the first
pressure on organisations to manage carbon more things I noticed was that every light switch had a
effectively mainly comes from central government sticker next to it, reading ‘switch off, you’re burning
(30%) and their own customers (25%). Local my bonus.’ It made pure sense to do that because we
government (20%) provides some impetus for change, all benefited as a result.”
well ahead of a company’s own employee base at a Jim Hagan, GlaxoSmithKline’s vice president
mere 9%. And, for all the talk of shareholder activism, for environmental health and safety, echoes this
only 8% of companies feel pressure from this corner. sentiment: “The fact that you can pursue programmes
While 56% of firms say that carbon reduction that cost less money, of course, is a prime driver. But
initiatives are a necessary concession to external if you can also consume less energy, reduce impact on
pressure, there is growing recognition that financial the environment and improve the work-life balance
of employees, well that all adds up to a richer and
Which of the following are the most important sources of
more persuasive context,” he says. “It helps people
external pressure influencing your organisation’s carbon- understand how beneficial these programmes are.”
reduction initiatives? Select up to two responses.
(% respondents) There are a number of ways for companies to reduce
their overall carbon footprint. They can offset their
Central/national government
30 own energy consumption by investing in renewable
Your customers
25
energy either directly by putting up a wind turbine or
Local governments a solar power on their premises, or indirectly through
20
Supra-national bodies (eg, the European Commission)
mechanisms such as carbon offsetting. Alternatively,
12 they can try to run their businesses more efficiently by
Non-governmental organisations
12
consuming less energy. How ICT can assist companies
Your board in this process is the subject of this report.
12
Industry organisations
11
Your staff
9 Developing strategies,
Your shareholders
8 setting targets
Your suppliers
3
None; we are not under external pressure to become greener
GlaxoSmithKline (GSK) has followed the
17 pronouncements of the Intergovernmental Panel on
Other
4
Climate Change (IPCC), since the mid-90s says Mr
Source: Economist Intelligence Unit survey, 2007.
Hagan. The IPCC has influenced GSK in its setting of
targets to reduce the company’s energy consumption
4 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
How would you describe the status of your organisation’s
carbon-reduction initiatives? The role of ICT
(% respondents)
We have a carbon-
According to research firm, Gartner, ICT accounts for
18
reduction strategy. the same level of carbon emissions as the aviation
A carbon-reduction 39 industry (about 2% of total global emissions).
strategy is in process
of being developed. However, while data centres are an area of concern
The organisation is 43 when it comes to energy efficiency, ICT can also
unlikely to have a
carbon-reduction be used to proactively cut carbon emissions when
strategy in the near
future. combined with changes in business practices and
human behaviours. For example, video and audio
Source: Economist Intelligence Unit survey, 2007. conferencing can be used to save on business travel.
The internet has made tele-working a possibility for
many millions of employees, obviating their need to
and hence its climate change impact. commute. Additionally, scheduling software and radio
“In 2007 the IPCC came out with a report that said frequency ID tags have made supply chains much more
‘we have been certain climate change is happening efficient.
but we also 90% sure it is due to human activity’. I In spite of the opportunities that ICT presents, only
took that to our corporate executive team and board 36% of those polled said their organisation’s carbon-
of directors and they approved new, more aggressive reduction strategy explicitly refers to the role of ICT
energy and climate change targets,” says Mr Hagan. in achieving carbon reduction targets. Clearly, senior
“Now we are saying we will reduce operational energy managers do not yet appreciate the potential of ICT to
consumption and related climate change potential by help achieve carbon-reduction goals.
20% per unit sales by 2010 and by 45% by 2015 from a
2006 baseline year.”
Our survey shows that the majority (57%) of Tele-working
companies either have a carbon-reduction strategy
in place or are in the process of developing one. While tele-working is one of the more established
However, 43% of those polled said their company was ways of reducing an organisation’s carbon footprint,
unlikely to develop such a strategy in the near future, it is still not as widely adopted as one might expect.
indicating that there is still substantial room for Fully 59% of the survey panel said that no one or
improvement. almost no one at their organisations works from home
Of those companies that have a green strategy, on a regular basis. Likewise, two-thirds (67%) of
13% aim to be entirely carbon neutral by 2012, respondents said no-one, or almost no-one in their
however, most firms have more modest targets in organisation, is given financial or material assistance
mind. to set up an office from home.
But Braden Allenby, professor of civil and
environmental engineering at Arizona State
University, argues that such findings actually mask
the full extent of home-working.
“This reflects both definitional and management
© The Economist Intelligence Unit 2008 5Managing the company’s carbon footprint
The emerging role of ICT
As of now, what proportion of your workforce...
(% respondents)
None one Almost no one Less than one-third About half Two-thirds or more Don’t know
Is given financial and material help by the organisation to set up an office at home?
40 27 16 5 11 1
Works from home on a regular basis?
24 35 24 8 80
Has broadband access to the organisation network from home?
14 18 27 14 26 1
Has an organisation PC or laptop for working at home?
8 13 38 15 25 1
Source: Economist Intelligence Unit survey, 2007.
issues,” says Mr Allenby. “What we found at many some companies are beginning to offer more
firms - including our own - is that occasional tele- environmentally-friendly alternatives to driving
work is quite common. Everything from nursing a cold to work. Microsoft, for instance, has financial
at home with a laptop, to taking kids to a doctor’s inducements for its employees to ride a bicycle, join a
appointment to bad weather was a reason. But regular carpool, use public transport or climb on board one of
tele-work or virtual offices are more difficult for the company’s new shuttle buses, which are equipped
managers to admit to because it may require more with WiFi so passengers can access their email and
paperwork, not least for legal reasons.” internet en route to the office. By 2015, Microsoft
On top of this, home-working is often awarded expects 40% of its workforce to have adopted more
by managers as an informal perk for high-achieving environmentally-friendly transport to work.
workers. In order not to induce jealousy among
colleagues, the home-working is not officially
recorded. Financial or material assistance to set up Kicking the flying habit
the apparatus for home-working only follows when
such an official policy is created. While some managers remain sceptical of the benefits
Our poll shows that over the next two years the of home-working, many are more sanguine about the
proportion of respondents who believe no-one or use of web and video conferencing to reduce business
almost no-one works from home on a regular basis, travel. When asked which technologies will prove most
falls dramatically from 59% to 33%. Likewise the beneficial in helping an organisation to reduce its
two-thirds (67%) of respondents who said no-one, or carbon footprint, web and video conferencing came
almost no-one in their organisation, is given financial top of the list.
or material assistance to set up an office at home is set Despite this enthusiasm for conferencing
to drop to 37% over the next couple of years. technologies, companies are reluctant to make their
But home-working is not without its doubters. For use mandatory. Less than one in ten respondents
instance, one criticism is that by working from home, (9%) thought a prescriptive approach the best one
employees are swapping an environmentally-sound for meetings with customers and partners, although
modern office for the badly-insulated older building, the proportion rose to nearly one in four (22%) when
namely their home. However, this is not so much an the choice was for virtual meetings with colleagues
argument against home-working as an argument for internally.
better insulated homes. Interestingly, the figures in favour of setting
For those who are wedded to the office, targets and incentives to encourage use of virtual
6 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
What mechanism, if any, does your organisation use (or plan to use in the near future) to encourage the following
activities by employees?
(% respondents)
Mandatory targets Voluntary targets/incentives Targets are not set
Reduction of document printing
35 48 16
Better co-ordination of logistics to reduce number/distance of deliveries
30 39 31
Better co-ordination of suppliers to reduce number/distance of deliveries
26 38 36
The use of virtual meetings with colleagues instead of physical meetings
22 45 33
Home working
14 43 43
The use of virtual meetings with customers and partners instead of physical meetings
9 46 44
Source: Economist Intelligence Unit survey, 2007.
meetings rise significantly for both internal and over climate change.
external meetings when it is done on a voluntary The attraction of conferencing as a CO2 reduction
basis—each rising to 46%. tool is increased because it is easily measurable in
Virtual meetings can take several forms. These terms of the resulting reduction in air or car miles
include audio or voice conferencing where three following its adoption. In terms of an internal
or more participants speak together via a common environmental audit, this makes conferencing an
telephone number. Web or data conferencing allows attractive technology compared to other initiatives
participants to follow a common presentation, but all which may not deliver such direct benefits.
accessing the same website. It is usually accompanied However, there are still some factors that limit the
by an audio conference. Web conferencing is the
fastest-growing of these services. In addition to audio In your view, what are the primary factors limiting the use of
virtual meetings to replace physical meetings at your
and web conferencing is videoconferencing, which organisation? Select up to two responses.
allows participants to see as well as hear one another (% respondents)
via a video link. The benefits of person-to-person interaction are too important to sacrifice
57
“The green issue is and will become more of a Inadequacy of video-conferencing technology
real factor for organizations in why they utilise 37
Employees’ lack of training in how to conduct virtual meetings efficiently
conferencing technologies,” says Richard Norris, 23
a consultant with Wainhouse Research, a US Concerns with security of data/confidentiality of discussions
17
consultancy that specializes in conferencing Perceived threat to organisation culture
technology, “partly because of their own corporate 14
Employee resistance
responsibilities but also because of legislative 8
Opposition from senior management
encouragement and, I think, for public image 7
reasons.” All of the above
3
Wainhouse’s own survey of European business Other
users this summer found that more than half (56%) 6
Don’t know
of respondents said their use of collaboration and 1
conferencing technology was influenced by concerns Source: Economist Intelligence Unit survey, 2007.
© The Economist Intelligence Unit 2008 7Managing the company’s carbon footprint
The emerging role of ICT
Greater London congestion scheme’s day-to-day operations. The company has already decided that
Since then, technological developments it would introduce the Global Positioning
charging scheme looks have lead to improved accuracy and cost of Radio Satellite vehicle-tracking system
to new technologies to in-car transponders, radio communications for its support fleet, which will eliminate
improve efficiency and payment systems. Congestion schemes unnecessary mileage and use of fuel. Further
of Malta and Singapore, for example, already improvements are expected to come when
make use of in-vehicle units with embedded IBM takes over the scheme management in
smartcards, which are scanned by gantries November 2009. During the announcement
Congestion charging, which levies a road with built-in short-range communication of the new scheme managing contract in
usage fee in designated urban areas, is one technologies. Combined with flexible October 2007 TfL said: “We’re looking to take
of the best known transport initiatives to electronic payment for registered individual the congestion charge scheme further to
reduce traffic and encourage use of more users, these technologies provide for more make it more flexible, going into such areas
environment friendly public transport. efficient navigation and reduce incident- as automatic payment.”
According to Transport for London (TfL), an generated congestion. There are several reasons why further
organisation that manages the transport Already in August 2003, TfL stated that improvements of the London scheme will be
network of the London metropolitan area, it was investigating how new technologies important. First, there is desire to improve
cars are responsible for 47% of all carbon may provide more flexibility for paying its environmental impact: during the
dioxide (CO2) emissions in London, com- the charges, or which may reduce the scheme’s first year of operation, congestion
pared to 21% generated by public transport. operating costs of the scheme. It trialled a declined by 30 per cent and has since
Introduction of congestion charge large number of technologies and decided stabilised at 21 per cent below the 2002
scheme in Greater London in February to focus on the following three: Dedicated level. In 2006/2007, the scheme generated
2003 was a highly political move, and its Short Range Communications, which would provisional net revenues of £123m, which
success depended on such factors as ease allow tagging and scanning cars through will be spent on further improvements
and speed of implementation as well as a network of beacons; satellite navigation of London transport. Finally, the success
perceived fairness and effectiveness. The systems for distance-based charging system; of the scheme encouraged the launch of
rollout of the 8-square-mile congestion and smart electronic payment systems congestion charging zone in Stockholm in
zone would have been impossible for more efficient customer charging and 2006, and it serves as a benchmark for the
without advanced technologies. At the billing. Stage 2 trials of these technologies congestion zone planned in New York. But
time of launch, automatic license plate were completed in 2006, and TfL is now TfL does not plan to rest on its laurels. It will
recognition and electronic payment preparing for Stage 3, which will focus on continue exploring new ways to improve the
technologies were chosen to support the technology usability and operational issues. scheme’s efficiency and performance.
wholesale uptake of remote conferencing. The top
concern, according to our panel, is the loss of person-
Streamlining supply chains
to-person interaction. Meeting someone on a screen,
no matter how high-definition, will never substitute Less obvious than the reduction in CO2 emissions
for a handshake. But once someone has been met in that comes from cutting business travel, introducing
person and the connection made, there is no reason greater efficiency into a company’s supply chain or
not to make the next meeting a virtual one. logistics operations through increased use of ICT can
also generate environmental benefits. More astute
use of technology reduces the distance goods have to
travel and improves consolidation of shipments, thus
reducing the total number of trips needed.
8 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
Which of the following improvements in operations are likely to In your view, what are the main factors limiting the use of
make the greatest contribution to an organisation's carbon- automated supply-chain and logistics solutions to reduce the
reduction efforts? Select up to two responses. number/distance of deliveries? Select up to two responses.
(% respondents) (% respondents)
Increasing the use of virtual meetings and reducing employee travel Inadequacy of your partners’ technology
43 30
Reducing the amount of paper generated by employees Inadequacy of your organisation’s technology
32 27
Improving the efficiency of supply-chain operations and logistics Lack of strategic planning/ discussion of the issue
29 22
Enabling greater remote/home working by employees Security concerns with partners’ technology
28 19
Incorporating environmental efficiency/impact as a key criterion Level of training of your organisation employees
in awarding supply/service contracts 13
20 Personal co-ordination of shipments is too important to sacrifice
Using networks to improve energy efficiency at organisation sites 12
15 Level of training of partners’ employees
Shifting to 100% online invoicing 11
11 All of the above
Using enterprise applications to manage carbon-reduction programmes 4
9 Other
Other 5
2 Don’t know
Source: Economist Intelligence Unit survey, 2007. 13
Source: Economist Intelligence Unit survey, 2007.
Survey respondents selected improved efficiency For instance, GSK already has an electronic network
of supply chains and logistics as making the biggest established for communicating with its suppliers and
contribution to reducing their carbon footprint contract manufacturers. Normally, the network is used
(29%), behind reducing paper consumption (33%) for processes such as gathering request for proposals,
and increasing the use of virtual meetings (43%). but GSK has turned to it to gather emissions
Some companies are using their influence to information. The company sent a questionnaire to
improve the energy-efficiency of the entire supply suppliers and manufacturers asking for information
chain, not just their portion of it. Earlier this about the environmental impact of their work for
autumn, Wal-Mart announced it would ask its more GSK. The aim is to report the information gathered
than 60,000 suppliers to measure and report their alongside internal results for GSK’s own carbon
CO2 emissions. The retailer argues that becoming footprint. Combining the two sets of results—external
equipped with energy-consumption information fits as well as internal—will give company stakeholders a
with its wider strategy of driving down costs in its fuller picture of GSK’s environmental impact.
supply chain. The initiative is a partnership with the However, there are limits to what can be
Carbon Disclosure Project, a group of institutional accomplished electronically. Actual audits of suppliers
investors that approaches companies to publish their and manufacturers’ environmental performance still
emission figures. have to be conducted via a physical visit to their sites.
The first step to measuring partners’ carbon Feeling comfortable with a partners’ supply chain
footprints is to gather actual environmental was a key consideration for survey respondents. In
performance data from suppliers. This in itself is a fact, the inadequacy of partners’ technology was the
technical challenge given thousands of companies single most cited factor for why respondents had
might be involved in supplying a major corporation. It not made more use of automated supply chains and
is also a situation where ICT has a role to play. logistics solutions. The second most popular answer
© The Economist Intelligence Unit 2008 9Managing the company’s carbon footprint
The emerging role of ICT
was the inadequacy respondents felt about their own Which executives in your organisation are primarily responsible
for developing carbon-reduction strategy or initiatives and
company’s technology. overseeing their implementation? Select up to two responses.
Of course, when an organisation controls a (% respondents)
technical solution, end-to-end, then an innovation CEO/Managing director
41
aimed at reducing CO2 emissions is easier to
CFO/Finance director
implement. For instance, logistics group Deutsche 10
CIO/CTO
Post World Net—the parent company of DHL - is 13
looking at how to reduce the miles travelled by its IT director
8
worldwide fleet of 130,000 vehicles. HR director
Its DHL innovation centre is working on a fleet 7
CSR (corporate social responsibility) director
management system that will use satellite navigation 14
to plan more efficient routes for delivery vans. The Line-of-business heads
13
management system will plan the optimum route for Department heads
8
the delivery and collection of parcels. In addition
Other
to the shortest distance between destinations, the 10
None
system also takes account of other elements. In urban 15
areas, the system minimises the van’s left-hand turns Source: Economist Intelligence Unit survey, 2007.
across traffic since waiting to turn involves inefficient
fuel consumption (in those countries such as the
UK which drive on the opposite side of the road, the The CIO as an agent
system will minimise right-hand turns). for change
Each van will be programmed at the start of a
working day, and will then be fed new data on traffic
conditions continually during the day so the drivers ICT has an important role to play in managing
can adjust their plans accordingly. A further innovation and reducing the organisation’s carbon footprint
would involve the system arranging for two or more across all business process, says David Clarke, Chief
vans to meet up and swap packages where one could Executive of the British Computer Society. “Without
more efficiently fit a certain delivery into its schedule. an intimate understanding of what ICT can realistically
The delivery of timely data is crucial to the success deliver, however, decisions can have unintended
of the system. In addition to satellite navigation consequences,” he says. “This means that CIOs and
technology, DHL is also investigating whether cellular their teams have a strategic role to play in carbon
networks or even WiFi technology could relay data to reduction and management.”
the vans. Yet, according to our survey results, CIOs have yet
One possibility is a so-called meshed network to define a role for themselves in the climate change
where the vans themselves act as nodes in a wireless debate. Half our sample said that their CIO has little
network, as well as being the recipients of data. or no input in their organisation’s carbon reduction
Mesh networks are often used in locations where discussions. Perhaps this is because ICT is not yet seen
conventional network coverage is unavailable. as offering the solutions needed to reduce carbon
These technical innovations still being tested, but emissions. Yet ICT has huge potential, albeit largely
Deutsche Post says rough calculations indicate they might unexplored, to make a positive contribution to the
reduce the company’s carbon footprint by about 5%. greening of companies.
10 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
HSBC Takes Green IT Improvements in data centre design of the measures adopted across the HSBC
and operation became the first priority, group is a managed print service, which has
Strategy to the Boardroom with the focus on sustainability, green increased the number of shared printers.
design and improvements in efficiency. The subsequent paper consumption in the
At this time, HSBC is building three new UK is expected to reduce by up to 25%.
The global financial group, HSBC, has data centres in the UK, which are designed HSBC is also using energy-smart software,
emerged as an environmental front-runner in compliance with the Building Research which automatically switches off computers
in the financial services community. It was Establishment Environmental Assessment at night and over weekends and will be
among the first to announce the decision Method—the world’s most widely used further rolling out this software across the
to become carbon neutral, launch environ- environmental assessment method for group in 2008. By the bank’s estimate, its
mental and sustainability programmes and buildings. Investment into green design operations in Asia-Pacific have already
set up a dedicated group corporate sustain- is expected to have direct impact on the made a reduction of 90 tonnes of CO2 by
ability department that provides strategic bottom line, translating into future savings installing energy-smart software on new
direction with regards to sustainability. of approximately 20,000 tonnes of carbon computers. HSBC is also making changes
The company emphasises that it views dioxide per annum and £3.02m in costs to its IT procurement practices, prioritising
energy efficiency programmes as an invest- savings. purchases of IT goods and services from
ment rather than a cost, but its decision to The outcome of HSBC’s decision environmentally responsible vendors and
become carbon neutral will require some to minimise business travel was the checking that sub-components are sourced
tough commitments. implementation and application of IT accordingly.
The IT organisation emerged as the solutions, including the construction The final change will affect the company’s
most strategic among all internal functions of virtual boardrooms and telepresence IT procurement practices, prioritising
examined by HSBC for their impact on facilities. The upfront financial outlay purchases of IT goods and services from
carbon emissions. “The IT sustainability required for these is substantial, but the environmentally responsible vendors and
action plan highlighted those functions and costs of such high-quality telepresence checking that sub-components are sourced
activities that have the biggest impact,” facilities, currently in London, Hong Kong accordingly. This joined-up approach
says Matthew Robinson, Footprint Manager and New York, will pay back in less than three of HSBC’s Group IT and Group Corporate
at HSBC’s Group Corporate Sustainability. years. Sustainability departments will be continued
“As part of this strategy, HSBC decided to Equally noteworthy are the smaller with long-term IT planning that incorporates
develop a managed process that focused on initiatives that have a big impact and that the principles of sustainability and
data centres, video and audio-conferencing, can be replicated in other companies. environmental protection—the elements
as well as green hardware and software Office equipment, for example, is the of which will hopefully become “hygiene
procurement and support practices.” fastest growing area of energy use. One factors” for all companies in the near future.
© The Economist Intelligence Unit 2008 11Managing the company’s carbon footprint
The emerging role of ICT
Conclusion
Although companies are feeling pressure from various business rather than localised wins and losses.”
quarters to decrease their carbon footprint, few are The IT organisation is one of the few departments
doing so in a co-ordinated fashion. “Most businesses with a helicopter view of the company, both in
are not set up to understand the effects of carbon terms of systems and processes. And, as previously
footprint end-to-end,” says Mr Clarke of the British mentioned, the CIO can play a pivotal role in helping
Computer Society. “In many cases, costs of carbon to better inform the organisation’s green agenda.
footprint and benefits are felt in different parts of the With a large and growing number of companies
business. To join up what are in effect departmental having a green strategy in the pipeline, the CIO can
externalities requires a great deal of vision, leading all demonstrate the benefits—as outlined in this report—
concerned to work in the best interests of the whole that ICT can bring to the table.
12 © The Economist Intelligence Unit 2008Managing the company’s carbon footprint
The emerging role of ICT
Appendix: Survey results
In October 2007, The Economist Intelligence Unit surveyed 345 executives from around the world. Our sincere
thanks go to all those who took part in the survey. Please note that not all answers add up to 100%, because of
rounding or because respondents were able to provide multiple answers to some questions.
Please state whether you agree or disagree with the following statements:
(% respondents)
Agree Disagree Don’t know
Senior management at our organisation consider green issues a personal rather than a corporate concern.
45 50 5
Carbon-reduction initiatives are a necessary concession to external pressures.
56 35 9
We see a commercial opportunity in carbon-reduction initiatives.
57 31 13
Which of the following are the most important sources of Which department has the greatest level of awareness of your
external pressure influencing your organisation’s carbon- organisation’s environmental impact? Select up to three.
reduction initiatives? Select up to two responses. (% respondents)
(% respondents)
Operations and production
Central/national government 39
30 Research & Development
Your customers 32
25 Facilities management
Local governments 29
20 Marketing
Supra-national bodies (eg, the European Commission) 23
12 Human resources
Non-governmental organisations 23
12 Finance
Your board 21
12 IT
Industry organisations 18
11 Sales
Your staff 12
9 Procurement / Supply-chain management
Your shareholders 17
8
Your suppliers
3
None; we are not under external pressure to become greener
17
Other
4
© The Economist Intelligence Unit 2008 13Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
How would you describe the status of your organisation’s Which of the following improvements in operations are likely to
carbon-reduction initiatives? make the greatest contribution to an organisation's carbon-
(% respondents) reduction efforts? Select up to two responses.
(% respondents)
We have a carbon- 18 Increasing the use of virtual meetings and reducing employee travel
reduction strategy. 43
Reducing the amount of paper generated by employees
A carbon-reduction 39
32
strategy is in process
of being developed. Improving the efficiency of supply-chain operations and logistics
29
The organisation is 43 Enabling greater remote/home working by employees
unlikely to have a 28
carbon-reduction
Incorporating environmental efficiency/impact as a key criterion
strategy in the near
in awarding supply/service contracts
future.
20
Using networks to improve energy efficiency at organisation sites
15
Shifting to 100% online invoicing
11
What cuts in carbon emission does your organisation intend to Using enterprise applications to manage carbon-reduction programmes
make by 2012? 9
(% respondents) Other
2
We do not have precise 24
reduction targets
Cuts of 1-10% 11
In your view, which of the following technologies will prove
Cuts of 11-20% 26 most beneficial in helping an organisation to reduce its carbon
Cuts of 21-30% 10
footprint? Select up to two responses.
(% respondents)
Cuts of 31-40% 5
Web conferencing
Cuts of more than 40% 8
31
We plan to be entirely 13 Video conferencing
carbon neutral by 2012 28
Don’t know 3 Logistics routing/planning systems
27
Wireless devices and applications
17
Software for calculating carbon footprint
15
IP VPNs (virtual private networks)
14
WiFi / WiMAX broadband-wireless-enabled devices and networks
14
Instant messaging
13
Voice over Internet protocol (VoIP)
13
RFID (radio-frequency identification)
3
Other
3
Don't know
3
14 © The Economist Intelligence Unit 2008Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
Please state whether you agree or disagree with the following statements on ICT and carbon-reduction strategy:
(% respondents)
Agree Disagree Don’t know
Senior management is aware of the potential of ICT to help achieve carbon-reduction goals but has not defined this in any detail.
51 30 19
Senior management does not yet appreciate the potential of ICT to help achieve carbon-reduction goals.
41 43 16
Our organisation's carbon-reduction strategy explicitly refers to the use of information and communications technology (ICT) to help achieve its goals.
36 32 31
As of now, what proportion of your workforce...
(% respondents)
None one Almost no one Less than one-third About half Two-thirds or more Don’t know
Is given financial and material help by the organisation to set up an office at home?
40 27 16 5 11 1
Works from home on a regular basis?
24 35 24 8 80
Has broadband access to the organisation network from home?
14 18 27 14 26 1
Has an organisation PC or laptop for working at home?
8 13 38 15 25 1
As of now, what proportion of your workforce...
(% respondents)
None one Almost no one Less than one-third About half Two-thirds or more Don’t know
Is given financial and material help by the organisation to set up an office at home?
20 17 24 14 19 6
Works from home on a regular basis?
11 22 32 16 16 3
Has broadband access to the organisation network from home?
5 8 20 20 43 3
Has an organisation PC or laptop for working at home?
4 8 26 23 38 2
If your organisation has employees who work from home on a
regular basis, does your organisation give advice on reducing the
carbon footprint in the home office?
(% respondents)
No 67
Yes 21
Don’t know 12
© The Economist Intelligence Unit 2008 15Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
In your view, what are the primary factors in your organisation In your view, what are the main factors limiting the use of
limiting the use of home working schemes by employees? automated supply-chain and logistics solutions to reduce the
Select all that apply. number/distance of deliveries? Select up to two responses.
(% respondents) (% respondents)
Loss of perceived benefits of face-to-face contact Inadequacy of your partners’ technology
60 30
Concerns with potential loss of worker productivity Inadequacy of your organisation’s technology
42 27
Perceived threat to organisation culture Lack of strategic planning/ discussion of the issue
39 22
Security concerns Security concerns with partners’ technology
39 19
Inadequacy of technology (eg, network speed) Level of training of your organisation employees
21 13
Opposition from senior management Personal co-ordination of shipments is too important to sacrifice
18 12
Costs of providing home workers with access to organisation network Level of training of partners’ employees
17 11
All of the above All of the above
8 4
Other Other
5 5
Don’t know Don’t know
2 13
In your view, what are the primary factors limiting the use of Which of the following statements about measuring the ICT
virtual meetings to replace physical meetings at your impact on carbon-reduction efforts do you agree with?
organisation? Select up to two responses. Select all that apply.
(% respondents) (% respondents)
The benefits of person-to-person interaction are too important to sacrifice We have established a system of metrics to measure how employees’ use
57 of ICT decreases (or increases) our organisation’s carbon emissions.
Inadequacy of video-conferencing technology 24
37
We have established a system of metrics to measure the increase or
Employees’ lack of training in how to conduct virtual meetings efficiently decrease of carbon emissions of our own ICT infrastructure.
23
23
Concerns with security of data/confidentiality of discussions
17
Perceived threat to organisation culture
14
To your knowledge, which of the following are the most
Employee resistance
8
important ways that your organisation plans to reduce the
carbon footprint of its own ICT infrastructure?
Opposition from senior management
7
Select up to two responses.
(% respondents)
All of the above
3
Recycling programme for paper and toner cartridges
Other 38
6
A printing policy, advising staff on how to reduce printing
Don’t know 37
1
An energy policy ensuring that PCs are turned off when not in use
33
Server virtualisation, to improve energy efficiency
28
Data centre server consolidation, to improve energy efficiency
26
Revised data centre design, to improve energy efficiency
16
Other
2
Don’t know
4
16 © The Economist Intelligence Unit 2008Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
What mechanism, if any, does your organisation use (or plan to use in the near future) to encourage the following
activities by employees?
(% respondents)
Mandatory targets Voluntary targets/incentives Targets are not set
Reduction of document printing
35 48 16
Better co-ordination of logistics to reduce number/distance of deliveries
30 39 31
Better co-ordination of suppliers to reduce number/distance of deliveries
26 38 36
The use of virtual meetings with colleagues instead of physical meetings
22 45 33
Home working
14 43 43
The use of virtual meetings with customers and partners instead of physical meetings
9 46 44
Which executives in your organisation are primarily responsible In your view, which executives in your organisation are best
for developing carbon-reduction strategy or initiatives and placed to lead the development of carbon-reduction strategy?
overseeing their implementation? Select up to two responses. Select up to two responses.
(% respondents) (% respondents)
CEO/Managing director CEO/Managing director
41 50
CFO/Finance director CFO/Finance director
10 11
CIO/CTO CIO/CTO
13 15
IT director IT director
8 11
HR director HR director
7 9
CSR (corporate social responsibility) director CSR (corporate social responsibility) director
14 17
Line-of-business heads Line-of-business heads
13 17
Department heads Department heads
8 9
Other Other
10 9
None None
15 3
© The Economist Intelligence Unit 2008 17Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
Which of the following statements best characterises the role of
your organisation’s CIO in senior management discussions on About the respondents
carbon reduction? Select one response only.
(% respondents)
The CIO is actively 18
involved in setting our
carbon-reduction
strategy.
In which region are you personally based?
The CIO is consulted on 33 (% respondents)
carbon-reduction
initiatives and is given Western Europe
responsibility for 34
specific targets.
Asia-Pacific
The CIO has little or no 49 29
input to this process. North America
17
Middle East and Africa
10
Latin America
Which of the following would be the most beneficial ways in 6
which the CIO should involve himself/herself in the Eastern Europe
organisation’s carbon-reduction efforts? 5
Select up to two responses.
(% respondents)
Focus management responsibility on the technology
components of the firm’s carbon-reduction strategy. Which of the following best describes your job title?
32 (% respondents)
Take responsibility for educating the board and executive suite
on the potential role of technology in carbon-reduction efforts. CEO/President/Managing director
28 44
Insist on a “seat at the table” along with other senior executives CIO/Technology director
in setting the organisation’s carbon-reduction strategy. 25
28 CFO/Treasurer/Comptroller
Volunteer to lead the development of the organisation’s 13
carbon-reduction strategy. Other C-level executive
27 11
Volunteer to manage the implementation of the organisation’s Board member
carbon-reduction strategy. 8
21
Take prime responsibility for educating the board and executive
suite on environmental impact issues in general.
20 What are your company’s annual global revenues in US dollars?
Other (% respondents)
2
Don’t know
6
$500m or less 64
$500m to $1bn 17
$1bn to $5bn 12
$5bn to $10bn 3
$10bn or more 4
18 © The Economist Intelligence Unit 2008Appendix: Survey results
Managing the company’s carbon footprint
The emerging role of ICT
What are your main functional roles? What is your primary industry?
Please choose no more than three functions. (% respondents)
(% respondents)
Financial services
General management 19
49 Professional services
IT 15
36 IT and Technology
Strategy and business development 13
36 Manufacturing
Finance 11
26 Healthcare, pharmaceuticals and biotechnology
Marketing and sales 6
14 Energy and natural resources
Operations and production 5
11 Construction and real estate
Information and research 4
10 Consumer goods
R&D 4
8 Transportation, travel and tourism
Risk 4
7 Entertainment, media and publishing
Customer service 3
6 Telecoms
Human resources 3
6 Education
Legal 3
5 Logistics and distribution
Supply-chain management 2
3 Retailing
Procurement 2
2 Government/Public sector
Other 2
2 Automotive
2
Chemicals
2
Agriculture and agribusiness
1
© The Economist Intelligence Unit 2008 19Whilst every effort has been taken to verify the accuracy
of this information, neither The Economist Intelligence
Unit Ltd. nor the sponsors of this report can accept any
responsibility or liability for reliance by any person on
this white paper or any of the information, opinions or
conclusions set out in the white paper.
20 © The Economist Intelligence Unit 2008LONDON NEW YORK HONG KONG 26 Red Lion Square 111 West 57th Street 6001, Central Plaza London New York 18 Harbour Road WC1R 4HQ NY 10019 Wanchai United Kingdom United States Hong Kong Tel: (44.20) 7576 8000 Tel: (1.212) 554 0600 Tel: (852) 2585 3888 Fax: (44.20) 7576 8476 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: london@eiu.com E-mail: newyork@eiu.com E-mail: hongkong@eiu.com
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