Category Archives: sustainability

Business need for reduced costs drives Cleantech demand

Posted on 26/04/2012 | Leave a comment

By David Bicknell

New research from audit specialist Grant Thornton has highlighted the change drivers behind the growing demand for cleantech products to reduce business costs.

Grant Thornton’s third annual International Business Report (IBR) report on the global cleantech industry shows that in general the adoption of cleantech products and practices is motivated by the commercial need to reduce costs and increase profits. It is no longer about being ‘green’.

For example, despite short-term fluctuations, the trend for key commodity prices continues upwards for example, Brent Crude oil recently rose back above US$120 a barrel. The outlook for nuclear energy is unclear following the Fukushima disaster – Germany, for example, has opted for the renewables route – and partly due to this uncertainty, cleantech is emerging as a suitable alternative source of energy or a means of reducing  consumption of expensive resources.

Over half of the business practitioners surveyed for the IBR who choose cleantech options do so to reduce their costs (52%); with 45% making the choice as a way to increase profitability. Corporate social responsibility (CSR) requirements and environmental concerns also remain important, but are not the main reason for adoption.

This increasing maturity of the sector is filtering through to expectations of cleantech business for the year ahead creating a bullish outlook for 2012.

Compared with companies in other sectors, the Grant Thornton report suggests that privately held businesses in the cleantech sector are now among the most confident enterprises in the world when it comes to future prosperity, far outpacing the optimism found in most global industries – and with good reason.

64% of cleantech businesses interviewed expect revenue to increase this year, up from 54% the previous year. 64% of respondents also expect higher profitability this year compared to 42% in 2011.  Cleantech providers currently see the greatest demand from the developed economies of Europe (51%), and US and Canada (39%).

Nathan Goode, head of energy, environment and sustainability at Grant Thornton UK said: “Interest in cleantech is no longer just about environmental concerns, it’s about whether it offers solutions that can boost the financial performance of companies. What we’re seeing is the potential for these technologies to compete with traditional forms of energy and the expectation that over time, they should.

“Governmental support remains key in many sectors and jurisdictions for cleantech to be successful, and fluctuations in this support are causing short term volatility for the cleantech arena. The mood of optimism in the sector appears to be driven by fundamental trends and reflected in broader indicators such as oil prices.

“Cleantech is a sector on the road to commercialisation but it is not necessarily all the way there yet. We’re at a stage now where the value proposition for cleantech is to save money and consequently demand for cleantech is set to increase meaning we could be on the cusp of something very big indeed.”

Cleantech and IT

The Grant Thornton report demonstrates how the cleantech sector is in transition. There are more companies involved in R&D (42%) and IT (29%) than in previous years (31% and 22% respectively).

Goode said: “Judging by this analysis, cleantech appears to have parallels with the biotech industry in that R&D is being used to explore new concepts and applications for existing technologies. As a result, R&D and IT is receiving greater focus as companies exploit advances in areas such as storage and smart grid technologies. In addition, the sector is adopting a broader base on which to apply its learning, putting greater focus on areas such as waste and water.”

In contrast, manufacturing activity has become relatively more subdued. The number of businesses citing involvement in manufacturing of energy efficient products has decreased over the past year from 26% in the 2012 survey to 19% in 2011, although manufacturing of products for cleantech energy generation has increased marginally to 17%, up from 14% the previous year.

There could be a number of reasons for this, but the Grant Thornton report stresses that the issue of capital constraint represents a big challenge for the sector and as a result, governments.

Goode added: “Manufacturing items such as wind turbines and waste processing plants is an incredibly capital intensive business.  However, what we’re seeing is a slowing in the pace of growth as a result of constraints on raising capital.  This continues to be an issue, especially in European economies where credit is constrained.

“Governments must be mindful of acting as a brake on investment, as it will quickly become a barrier to achieving carbon reduction targets and the desire to supply businesses and households with alternative supplies of energy – and at a time when it’s really starting to compete.”

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Posted in Campaign4Change, change management, cleantech, Climate Change, cost reduction, CSR, energy change, energy efficiency, environmental, Green IT, greentech, sustainability

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Winds of energy change blow through Germany and China

Posted on 24/04/2012 | 1 comment

By David Bicknell

Change in government priorities and policies can drive structural change that generates significant investment and growth. That is now particularly the case in energy production projects in the aftermath of the Fukushima disaster.

From this article on Business Green, it appears that Germany  is set for a significant investment in wind power with the setting up of a number of offshore wind farms with new hydroelectric power plants in the offing too.

German energy companies and investors are ready to plough up to €60bn into overhauling the country’s power infrastructure, following the government’s pledge to phase out nuclear reactors.

The energy and water industry association BDEW issued a report on the first day of the Hanover industrial fair revealing that plans are underway to build or modernise 84 power stations with a combined capacity of 42GW.

As Business Green says, the report also provides one of the most detailed insights to date on how the German energy sector plans to cope with the government’s commitment to phase out nuclear capacity in the country post-Fukushima.

Another recent article shows that China is making similar investments in wind energy, spending the equivalent of £4bn in the North-Western Gansu region.

As Jonathan Watts reports, “Wind turbines, which were almost unknown five years ago, stretch into the distance, competing only with far mountains and new pylons for space on the horizon. Jiuquan alone now has the capacity to generate 6GW of wind energy – roughly equivalent to that of the whole UK. The plan is to more than triple that by 2015, when this area could become the biggest wind farm in the world.

“Although it is the world’s biggest CO2 emitter and notorious for building the equivalent of a 400MW coal-fired power station every three days, it is also erecting 36 wind turbines a day and building a robust new electricity grid to send this power thousands of miles across the country from the deserts of the west to the cities of the east.

“It is part of a long-term plan to supply 15 per cent of the country’s energy from renewable sources by 2020. Most of that will come from nuclear and hydropower, but the government is also tapping the wind and solar potential of the deserts, mountain plateaus and coastlines.”

Meanwhile, Britain could pump £13bn into the economy and create up to 10,000 jobs by upgrading its power distribution network with smart grid technology, according to a Reuters report.

The technology has the potential to transform the way electricity is generated, distributed and consumed just as the Internet transformed the way the world communicates.

The idea is to create a communication network to maximise efficiency in supply and demand and to cut costs for homes and businesses.

Related Reading

UK smart grid could create jobs, help economy

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Posted in Climate Change, energy change, government, Green IT, greentech, project management, sustainability

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How a Dutch SME is helping make software energy efficient

Posted on 02/03/2012 | Leave a comment

By David Bicknell

It may take a little time, but in the future organisations will be able to track the energy efficiency of their software and know how much it is costing them to run.

It follows an idea developed by a Dutch SME that specialises in the quality of software. Amsterdam-based Software Improvement Group (SIG) has partnered with the nearby Hogeschool van Amsterdam (Amsterdam University of Applied Sciences)  to create the Software Energy Footprint Lab (SEFLab).

SEFLab is now setting out to establish how the quality of organisations’ software code affects their energy consumption. The work will couple SIG’s knowledge and expertise in software monitoring  with the enthusiasm and technical expertise of the local university students.

Campaign4Change asked Dr Joost Visser, SIG’s Head of Research how it is going about tackling the energy efficiency of software, and what elements of the problem it needs to examine.

Joost Visser: There are basically two types of this problem that you can break this down and look into. One is across the software lifecycle. So just as with software defects where the later you find them the more expensive they are, so with energy efficiency, if you try to optimise your software once it’s already in production, you may have to make an explicit investment that might not provide an adequate payback. But if you already know what requirements you need to keep in mind at the design stage for energy efficiency, then, for example, you might actually choose a different communication protocol which can improve your efficiency. At each of the development process, there are things to do: in requirements, in the coding and in the testing.

Another issue is the hierarchical level of software. The thing you might see as the consumer is the application. But actually that’s not the first level that impacts energy efficiency. The first level is the user themselves. In a car, the person that is actually touching the accelerator has a lot of influence on how much fuel you would use. To reduce your fuel usage, you may need to change your (driving) behaviour. The same thing applies with users of software. If they know what the consequences are of clicking here and searching there, they might behave slightly differently and it might have an impact on energy efficiency. If you give people feedback, they will behave differently.

C4C: What sort of user feedback have you had?

JV: We did a survey around 9 months ago where we asked a lot of users about these types of things and the overwhelming conclusion of that survey was that, ‘Yes, we would like to change our behaviour but at the moment we have nothing to go on. We don’t know how to make that change.’

There is a premium on green products. People want to be green – but they have to be able to make a meaningful choice. There are various elements to consider. First there is the application layer. Then we have the various components from which the software application is built: a database; a runtime environment framework, and Java as a virtual machine. Then underneath there’s the operating system. Microsoft has made a big effort in its operating system to take energy efficiency into account but I think there are many more steps to be made there. Then there is communication. You have to think about your mobile device uses radio to communicate when you’re browsing. You may have to make an explicit switch to a Wi-Fi network which might be more energy efficient. Is it more energy efficient than 3G? We don’t know yet. That is one of the things we’re going to find out.

C4C: One of the areas that many organisations are talking about is the impact of consumerisation and the use of touch devices creating a new user interface that organisations’ applications will have to be rewritten for. What does than mean from an energy efficiency perspective?

JV: One of the very very real challenges now is that we want to go to those new devices with mobile strategies but time to market dictates how we think about energy efficiency. So you might choose to do develop once on different devices but on many devices, there’s no accounting for the energy consumption. You might go to HTML5, for instance, but it might consume much more energy than when you create a native application. I think by making the choices visible, we will enable people to choose. We will take away the time-to-market issue and people will be able to say,’ OK, we can have this a couple of weeks later and still make things provably more energy efficient’, which consumers will appreciate.

C4C: Will we get to a stage where the consumer will think about the energy efficiency, or are they really only going to be thinking about the coolness of the product i.e. I want an iPad and I don’t really care what the energy efficiency is?

JV: Let’s be realistic about this. Consumers want to get hold of new things. They’re right – they’re consumers. So the coolness of the device has to incorporate the energy efficiency. It’s a lifestyle product. If you offer that, they’ll want it.

C4C: But in the corporate world previously, the IT department would buy the product. Now the user, the consumer, is buying the product and he or she wants a cool devices and they don’t really know about the energy efficiency side of things.

JV: If you compare it to other types of products, fridges, for instance, suppliers do compete on energy efficiency. They all want to be rated A, and that’s partly to do with regulation and partly to do with the demands of the customer. But an essential thing to make that work is that there is a measurement, a consumable rating, that’s meaningful. And now with software, we are developing the science behind it.

Is it about green hardware? Or is it using an energy efficient battery? Or just using a bigger battery? It gives you as a consumer the incentive to use it.  There is also the recycling of the batteries to be taken into account, of course.

C4C: Going back to the way the user is using the software. If you take the car analogy, ultimately there is a cost for you if you’re not driving efficiently. How do we portray those costs in terms of energy efficiency of software?

JV: Maybe you should get feedback about your consumption, not in terms of the litre of fuel you used, but in terms of euros. You want to make that last step. Similarly in software there is a lot of knowledge about CPU cycles and megabytes. But in the end you want to know what is the calorific value of what you’re doing. And that has to be put into some perspective.

C4C: If you were to take it to the nth degree, would you be able to get an idea of how much electricity or energy you had used in your browsing session?

JV: If you keep all your tabs open, do you as a user know if that has any impact, or is that negligible? If you knew it was consuming energy, maybe you’d take the trouble of closing them because it has value for you. Energy consumption goes further than simply your own device. If you’re browsing, you’re pulling information in, and the server starts doing things for you and data starts being generated. It might be stored, consuming energy, for the next 50 years. And it makes a difference how it gets archived or stored. All of this has to be made simple for the consumer to comprehend. Then there’s the organisational side, those organisations that have bespoke software built for them.

They might be interested in ‘green’ from the idealistic point of view. Their clients are interested too and they want to be socially responsible. But those organisations are also very much interested in the cost aspect. Energy costs are rising and it’s not just costs, but scarcity too. If more work implies more energy, at some point you may not be able to get it as easily as before. Either you will get it back in higher energy costs or it just won’t be there.

C4C: Is there any way you can create a benchmark or figure that talks about how much inefficient software usage can cost?

JV: Not yet. For data centre efficiency, there is the PUE. It has lots of drawbacks as well. But is has had a good impact and made choices more clear. We are working on it. We have some development of KPIs. But it’s hard. There’s a real research challenge here. One reason is the mapping of software applications to hardware. It’s not one to one. We may have one software application running on many pieces of hardware and due to virtualisation and other techniques, we have many applications running on the same hardware. With the hardware you can map how much energy goes through it. But how do you map that to the consumer of the energy i.e. the software? That’s a very difficult puzzle.

Another thing is that we’d all like to have a benchmark. To have a benchmark, you need comparable things. But think about it. You have online payments for a bank versus using a browser. The type of work you do with the software, the user transactions, so to speak, is completely different.  If one consumes a certain amount of energy and the other consumes double that, what does that mean? Does that mean the one that consumes more is worse? Not necessarily. It may simply be doing more work. So we have to develop KPIs that allow meaningful comparison. One suggestion is to how much energy per function point. That sounds good, but actually it’s completely wrong, because a function point is about functional size and how many features you offer.  Yet it doesn’t have anything about the workload in it. You have to involve the workload into the KPI otherwise it cannot work.

Now workload is something that’s completely different between different vendors and operations systems and end users. Comparing an operating system to an end user application will not work. That’s why we’re trying to build these up through the lab.

C4C: You could end up having two years of discussions between vendors over what would be an appropriate standard for energy efficient software, couldn’t you?

JV: The way to make these protracted processes shorter is to have people with lots of initiative who just go for it in their own sphere of influence, and show that it can be done, and create a reality that others can follow. International standardisation processes take a long time, but you shouldn’t wait for it. You should go for it.

Links

Software Energy Footprint Lab

8 ways to make your software more energy efficient

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Posted in Campaign4Change, Climate Change, energy efficiency, greentech, sustainability, virtualisation

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Environment Agency publishes Carbon Reduction Commitment league table

Posted on 08/11/2011 | Leave a comment

By David Bicknell

The Environment Agency has published the initial league table for the Carbon Reduction Commmitment (CRC) Energy Efficiency scheme.

As the Agency puts it, the Performance League Table (PLT) ranks organisations participating in the CRC on how well they manage their energy efficiency. PLT positions are based on a participant’s changes in energy use against a baseline and not their total emissions. As a result the PLT should motivate organisations to improve their energy efficiency.

The 2010/11 PLT recognises those organisations who have already taken action to monitor and reduce their carbon emissions and is based on information supplied by participating organisations.

The Agency’s website is already under pressure from the number of hits on the site, but the table is available as an Excel file here

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Posted in Campaign4Change, Climate Change, CRC, sustainability

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CRC (Carbon Reduction Commitment) league table now expected in November

Posted on 28/10/2011 | Leave a comment

By David Bicknell

It seems that the league table associated with the Carbon Reduction Commitment (CRC) energy efficiency scheme is now expected to be published in November.

This blog post on Local Energy suggests that a November date is expected. That could mean the table will be out next week or alternatively,  it may still be a month away.

Local Energy quoted Carl Sweeney the Operations Manager of the CRC Energy Efficiency Scheme at the Environment Agency, saying:

“At this time, we anticipate that the PLT will be published in November. We have agreed with DECC that we will notify participants of the publication date one week before release. There is much ongoing work in the background to review and produce the PLT as accurate as possible, so at this stage I can’t be more specific as something unexpected could delay us.”

Third parties familiar with the situation say that the Environment Agency is getting ‘a lot of calls’ on when the table will be published. 

What does the league table mean? The Carbon Trust, a not-for-profit company that provides specialist support to help business and the public sector cut carbon emissions, puts it like this:

“A publicly available CRC performance league table will show how each participant is performing compared to others in the scheme. If your organisation is a good carbon performer, the league table will help give a significant boost to your organisation’s reputation, demonstrating its success in cutting emissions. Please note, however, that because of the changes announced in October 2010, there is likely to be no direct financial benefit under the CRC from an improved position in the league table.Your organisation’s league table position each year will be determined by performance in three metrics:

  • Early action metric: 50% of your score is based on what percentage of your organisation’s electricity and gas supplies is covered by voluntary automatic meter readings (AMR) in the year to 31 March 2011. The other half is based on the proportion of your CRC emissions certified under the Carbon Trust Standard or an equivalent scheme. Visit www.carbontruststandard.com to find out about achieving the Carbon Trust Standard.
  • Absolute metric: The percentage change in your organisation’s emissions, compared to the average of the previous five years (or number of years available until 2014/15).
  • Growth metric: the percentage change in emissions per unit turnover, compared to the average of the previous five years (or number of years available until 2014/15).

The weighting of these three metrics will change over time. In the first year, early action will count for 100% of your organisation’s league table score. Over the first few years of the scheme, the early action metric will gradually fade in importance until the absolute and growth metrics receive 75% and 25% weightings respectively in 2014/15 and thereafter.

As the Carbon Trust points out, if an organisation is a good carbon performer, the league table will boost its reputation, though there will be no direct financial benefit under the CRC from an improved position in the league table.

However, when the results come out, you can well imagine a few marketing departments either keen to trumpet their organisation’s performance or, conversely, trying to shore up their company’s ‘green’ reputation.

See later story: Environment Agency publishes CRC league table

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Posted in Campaign4Change, Climate Change, energy efficiency, greentech, sustainability

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What sustainability – and business – leaders should learn from Steve Jobs

Posted on 19/10/2011 | Leave a comment

By David Bicknell

It’s a couple of weeks since Steve Jobs left us. Many tributes have been paid. With sustainability in mind, I liked this blog post from Andrew Winston entitled ‘What Sustainability should learn from Steve Jobs.’

It’s not so much about Apple and sustainability. But it’s about Steve Jobs’  eye for innovation and one important lesson that sustainability-minded leaders can learn from Jobs’ legacy: you should lead your customers and show them a better way.

Winston, who writes regularly for the Harvard Business Review, suggests that most large companies today are “fast followers” –  with ‘fiscal and strategic conservatism breeding a culture where execs prefer to wait and talk to customers before doing anything drastic. Of course customer (and other stakeholder) perspectives are critical. But as with tablet computers, when it comes to sustainability, often the customers don’t really know what they need.

“Companies often gather data on what their business customers think a sustainable product should be, and the survey might show that including recycled material is important, even if that’s a tiny part of the real footprint story. Nobody knows the value chain of your product and service as well as you do (or if someone else does, get them in the room pronto). So figure out where the impacts really lie and what you can do to reduce your customer’s footprint in ways they hadn’t considered. This might require asking heretical questions about whether the product should even exist in its current form or should be converted into more of a service.” 

Winston believes the next generation’s Steve Jobs is likely to focus on sustainability since that’s where the largest challenges and business opportunities lie.

I like Winston’s thinking on “fast followers.” It’s far easier to be a follower  than to take a lead, get out there, take a risk and make a market. That’s fine, as long as second place is somewhere, and not nowhere.

As well as sustainability and business leaders, maybe there’s also a lesson here for those who aspire to create public sector mutuals: to take a lead and show that there’s a better way.

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Posted in Campaign4Change, change management, managing change, mutualisation, mutuals, public sector, public services, sustainability

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Why the public sector must stop buying printers

Posted on 04/10/2011 | 1 comment

In the first in a series of Campaign4Change guest insights, Tracey Rawling Church, Director of Brand and Reputation at Kyocera Mita UK explains what steps the public sector needs to take to transform its procurement of printers and make its ITTs more cost efficient and low-carbon friendly

To cut its costs and carbon emissions, the public sector should stop buying printers. That may seem a ridiculous statement, coming from an imaging company executive, but actually there’s a serious point here. Most ITTs are written around a notional product – calling for a certain number of machines of a certain specification. And the tender process is quite rigid, so companies invited to tender are forced to propose a solution that fits the criteria in the ITT.

But in many organisations, the number of devices has crept up over time and device to user ratios are unnecessarily high – so replacing machines on a one-for-one basis only perpetuates a system that has become bloated and inefficient.

Sometimes the decision is made to consolidate devices, replacing desktop printers with shared multifunctional devices and an ITT is written on that basis, but to achieve real efficiencies that could reduce costs by typically 30% and carbon by as much as half, a detailed print audit should be undertaken to determine precisely what hardware is needed at which locations to support business processes.

However, even this approach misses the opportunity to obtain a solution that is properly optimised not just at the point of implementation, but into the future.

In the private sector, there is a growing trend towards managed document services, a holistic approach that encompasses every aspect of the printing and imaging needs of an organisation.

A managed document service project begins with a detailed audit of both the machines currently in place and the document flows through and within the organisation. Then a solution is designed that aims to reduce reliance on hard copy by combining document management software with a fleet of machines that have exactly the right functionality to support the document flow.

In most cases, this results in a much smaller number of devices, usually with more extensive functionality than those they replace. A bespoke service contract is crafted that includes remote monitoring of device states, service support to agreed service levels and detailed reporting of device use that can be segmented and analysed in a myriad of ways. And using the business intelligence gained from the reporting suite, the service can be continuously optimised to ensure it remains efficient, accommodating changes in the organisation over time.

For example, the managed document solution provided for insurance giant RSA has reduced paper consumption by 21% in just one year – despite the fact that their product depends on having a printed certificate. And energy consumed by imaging devices has been reduced by 55% with resulting savings in both electricity costs and CRC levies.

As you can imagine, this type of service doesn’t fit easily into a device-centric ITT. So vendors who know they could save cash and carbon through applying a managed document service are forced to respond with a ’round peg, square hole’ solution that is less than ideal, simply because the tender process focuses on products rather than outcomes.

Concerns about carbon emissions and resource scarcity are driving the evolution of innovative business models that overturn conventional norms and challenge the status quo. But unless procurement processes keep pace with these changes, the benefits of this fresh thinking won’t be realised.

To really drive through change, let’s have ITTs written by commercial managers and procurement departments that focus on objectives and targets rather than feeds and speeds. Throw down a challenge to reduce paper consumption by x, cut energy use by y% and drive down costs by z and see what the industry comes up with. I guarantee it will deliver solutions that are more resource efficient, productive and economical.

Events: http://www.kyoceramita.co.uk/index/events.html

MDS in the public sector http://www.kyoceramita.co.uk/index/mds/mds_in_the_public.html
RSA case study
For more information on the full results of the latest independent research into printing attitudes and behaviour,  email Tracey Rawling Church: trc@kyoceramita.co.uk

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Posted in Campaign4Change, environmental, greentech, printers, procurement, public sector, sustainability

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Letter to No 10 opens up energy prices and climate change policy discussion

Posted on 06/09/2011 | Leave a comment

By David Bicknell

It seems as if with the party conference season not far off, discussions are taking place around the edge of government over energy policy, which may have some implications down the line as far as business energy costs and climate change legislation are concerned.

It follows a leak to the Daily Telegraph of a note to David Cameron  discussing the impact of energy and climate change policies on energy prices, Although the focus of the letter is on consumer energy prices, it is possible that a wider review may also need to examine the effect of government policies in the form of climate change legislation on businesses.

The letter suggests that four policies stand out as having the most significant impact on household energy bills: carbon pricing (both the carbon price floor and the EU emissions trading scheme), the new Energy Company Obligation, the Electricity Market Reform package and the Renewables Obligation.

The letter goes on to ask whether policies can be opened up, particularly support for relatively high-cost technologies such as offshore wind, in a way that minimises cost and disruption to investment.

It’s possible that, as the Guardian suggests, the leaked letter is part of a sabre-rattling exercise ahead of the conference season. On the other hand, with consumers strapped for cash, energy prices on an ever upwards spiral, and businesses struggling in a stagnant economy, a healthy debate over energy policy is  perhaps not a bad idea, though, as the Guardian headline puts it, that risks pitting fossil fuels against renewable energy.

There is some more background to the story here:

http://www.businessgreen.com/bg/james-blog/2106683/10s-criticism-decc-lacks-credibility-energy-ideas

http://www.guardian.co.uk/environment/damian-carrington-blog/2011/sep/05/greenpolitics-energy

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Posted in Campaign4Change, Climate Change, environmental, greentech, sustainability

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Why corporate sustainability strategy is now part of the CFO’s role

Posted on 30/08/2011 | Leave a comment

By David Bicknell

The organisational politics around sustainability are an ongoing issue. So far the need for a  sustainability strategy has touched those responsible for corporate social responsibility (CSR),  marketing (because of the brand and reputation implications of Carbon Reduction Commitment (CRC) league tables) and IT and Facilities who are having to manage and measure energy usage.

Now, an Ernst & Young report recommends, it is the CFO’s turn to pick up the baton.  As this piece suggests, sustainability trends are shifting the role of the CFO in three key areas:

  • Investor relations:  “Shareholders are speaking much louder and much more stridently than they did just a few years ago.  During the 2011 proxy season, 40 percent of shareholder resolutions were related to ESG issues. And over a quarter of ESG-related resolutions gained a 30 percent “Yes” vote, which Ernst & Young describes as a critical threshold (other observers say anywhere from a 10 to 20 percent vote can motivate companies to rethink their policies).  Mutual fund companies are paying more attention to sustainability related issues, and the rating companies (which have received, ahem, a fair bit of scrutiny lately) are directing more focus towards ESG matters as well.  All this leads to a shift in the duties of companies’ investors relations staffs; and CFOs, according to Ernst & Young, will lend more than a few hands with the demands placed on IR departments.
  • External reporting:  More than 3000 multinationals issue sustainability (or CSR or ESG) reports, and many of these companies now provide more than static or trite glossy PDFs.  Companies including UPS, Timberland, and Microsoft are raising the bar in offering frankness while encouraging increased stakeholder engagement.  To that end, more companies are having their sustainability reporting audited by third parties (such as the Carbon Disclosure Project for carbon emissions performance).  And that experience with third party performance falls into the CFO’s lap because they know how to balance the challenges and opportunities that arise from third-party verification.
  • Operational controllership and financial risk management:  Early last year, the Securities and Exchange Commission issued guidelines to companies on how to disclose risks possibly related to climate change.  Carbon data, and more frequently, water data, is becoming financial data because of these resources increasing price.  What was once tangential to the costs of running businesses has and will be central to the financial risks that come when running a company.  Whether evaluating the costs of large capital projects or ascertaining the reliability of sustainability data, CFOs and the departments they head will be careful when ensuring that all this data is accurate.”

Admittedly, currently this is probably a more US-focused development. But then it’s probably only a matter of time before CFOs here have to start considering the sustainability implications of their job, if they are not doing so already.

Here are five immediate actions CFOs can take to enhance corporate value through sustainability:

• Actively pursue a sustainability and reporting program.
• Ensure that those responsible for sustainability matters do not operate in isolation from the rest of the enterprise — especially the finance function.
• Enhance dialogue with shareholders and improve disclosure in key areas, particularly those related to social and environmental issues.
• Ensure that directors’ skills are relevant to the chief areas of stakeholder concern, including risk management tied to social and environmental matters.
• Consider using nontraditional performance metrics, including those related to environmental/sustainability issues.

Ernst & Young report: How Sustainability has Expanded the CFO’s Role

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Carbon Disclosure Project report discusses energy saving and low carbon benefits of Cloud Computing

Posted on 31/07/2011 | Leave a comment

David Bicknell

One of the most informed and engaging writers around sustainability and business is Andrew Winston, who writes a blog called Finding the Gold in Green and writes for the Harvard Business Review as well.

His blog discusses  a new report from the Carbon Disclosure Project about the sustainability benefits of Cloud Computing

Here’s the intro to the report:

Across business, executives are looking for ways in which they can operate more sustainably and thereby increase their competitive edge. Information Communications Technology (ICT) is seen as a key area of focus for achieving sustainability goals. This report shows that business use of cloud computing can play an important role in an organisation’s sustainability and IT strategies: improving business process efficiency and flexibility whilst decreasing the emissions of IT operations.

This study used detailed case study evidence from 11 global firms and assessed the financial benefits and potential carbon reductions for a firm opting for a particular cloud computing service. It also demonstrates how projected cloud computing adoption could drive economy-wide business benefits from a financial and carbon reduction perspective in the US.

The results show that by 2020, large U.S. companies that use cloud computing can achieve annual energy savings of $12.3 billion and annual carbon reductions equivalent to 200 million barrels of oil – enough to power 5.7 million cars for one year.

The report also delves into the advantages and potential barriers to cloud computing adoption and gives insights from the multi-national firms that were interviewed.

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Posted in Climate Change, Cloud Computing, sustainability

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