August 5, 2015

Green Kaleidoscope: IT Contributions to Environmental Sustainability

CIO Strategy Exchange, New York, 2007

“Nature, to be commanded, must be obeyed.”
-Francis Bacon, 1620

“Self-preservation, nature’s first great law, All the creatures, except man, doth awe.”
-Andrew Marvell


Every Mideast rumble, destructive hurricane, posturing dictator and local brownout heightens corporate concern about oil supplies. Meanwhile, the global demand for petroleum escalates relentlessly. This potent combination of potential supply shortages and price uncertainty, business pressures, environmental distress, grim science, and political clowning has morphed this issue from dull and marginal to cool and core in just the past year.

So your intrepid researchers launched an inquiry on energy conservation and environmental sustainability among CIOSE members. Thanks to all the clever CIOSE members who contributed their time – and that of colleagues as well – to provide the insights contained here. We couldn’t have written this document without your brilliance and judgment!

The first chapter considers the kaleidoscope of green business initiatives and energy scorecards on products, services and investments in our crowd. The next chapter focuses on the role of Information Technology in containing the voracious electricity appetites of hot boxes, blade servers, PCs and electronic gadgetry generally. The third chapter covers aggressive programs to reduce energy in offices and travel.

CIOSE companies in every sector are concerned about their greenness, as you’ll soon see. Many have launched broadly applicable initiatives that are surely worth understanding by you – their peer corporate officers.

Green is Good

Here are our eight favorite observations.

  1. Material Gain: Many CIOSE companies have realized improvements in resource efficiency of 20 percent – and more – in recent years.
  2. Multi-Solutions: Large collections of simple incremental steps implemented locally by operating units, manufacturing plants, distribution sites and branch offices have delivered impressive (and relatively immediate) payoffs. Additional gains require new manufacturing equipment and fundamental restructuring of production processes – and even different products.
  3. Informal Tools: Coordinating mechanisms certainly help. Teams are being formed to address specific problems and constituencies fostered to share best practices. Information Technology plays an important role: At [REDACTED], the IT organization gathers and publishes relevant statistics. [REDACTED] maintains a data base of energy utilization, recycling volumes and other environmental performance metrics at 16,000 sites in 100 countries. [REDACTED] data base of every step in its industrial processes directs management focus to the energy- intensive areas most susceptible to substantial improvement. Company-wide scorecards in many companies create healthy competition among business units, plants, and offices to improve their own energy efficiency.
  4. Bottoms Up: As with any sea change in business, leadership at the top and ongoing attention are powerful stimulants. But unlike executive drives for “process reengineering” (which often eliminates jobs), environmental sustainability programs draw active involvement from ordinary workers concerned about the health of our favorite planet for their children. “Sustainability programs are a huge motivator and morale builder,” observes the [REDACTED] CIOSE member.
  5. Renewable isn’t Refundable: Many CIOSE companies (like [REDACTED]) employ or experiment with cleaner energy sources like solar, ethanol and hybrid vehicles. Until these become truly cost-effective, however, success is measured primarily in terms of energy self reliance and reduced dependence on petroleum form volatile oil-producing regions.
  6. Energy Saved is Energy Earned: In the near term, conservation is more successful than conversion to alternate energy sources. Most striking is progress at manufacturing heavies like [REDACTED] or consumer product companies like [REDACTED]. [REDACTED] is resolutely partnering with its myriad suppliers to reduce packaging bulk; that has an enormous chain reaction on transport efficiency across many sectors. [REDACTED] unusually creative conservation efforts are first in line to be described.
  7. Accelerated Funding: Led by [REDACTED], venture capitalists are birthing early-stage technologies and nursing them with sizeable investments and dogged forays into government policy. Later-stage investments and much expanded portfolio commitments are coming from CIOSE members [REDACTED], among others.
  8. Green is Good: Recently, pressures to implement conservation measures have markedly increased. Sources of this pressure (besides erratic energy prices) include enterprise customers, probing checklists for vendors, consumer activists, mobilized employees, shareholders and idealistic campus recruits. “Companies will be forced to drive a Green policy which can survive careful scrutiny – if they aren’t doing so already,” reckons [REDACTED] CIOSE member.

All this is surely prompted by a desire to do the right thing. But self interest – and economics – point in the same direction. Lessons learned from across the range of CIOSE business sectors are illuminating and potentially helpful in framing or evaluating your own policies.