Reports early in 2009 about theICT sector's carbon dioxide emissionsmust have
caused embarrassment to senior board members. In one case, it was
suggested that a North Americandatacentrebelonging to a major search engine might
need as much power as all the homes in Newcastle, UK. So the rapid
development by several ICT companies of a whole range of software
with an environmental theme has come not a moment too soon.
The new products are not about fun, eco-friendly features built
into the latest PC, nor about their own
carbon footprint. They aim to address customers' administrative
headaches. Companies such as Carbonetworks, SAP and Logica claim
that a new range of environmental management software could help
clients
slash their emissions.
By applying its SIRA (Sustainability Indicator Reporting
Application) software tool to its own corporate operations, for
example, software firm Logica says it has cut its travel
expenditure by sliced £7m, or 30%, by extricating deeper,
previously inaccessible information about staff travel patterns.
Logica says there is an accompanying cut in greenhouse gas
emissions, as well as an overall reduction in the travel and
communications budget.
Logica is not the only company developing these kinds of tools,
although it focuses more on sustainability than on greenhouse gas
management alone. Carbonetworks, IBM, SAP and one or two other
software developers have also created carbon or environmental
management systems that they say go well beyond existing corporate
environment, health and safety (EH&S) software or carbon
footprint calculators, in that they are sold as decision-making,
rather than inventory-building, tools.
Emerging
technology
But Michael Meehan, chief executive of Carbonetworks, admits it
is early days. Most carbon management tools have only been emerging
in the past year or two.
John Winstanley, technology integration partner in Deloitte's
consulting division, sees this trend as an exciting new phase in
the
development of green IT. "Phase one was the growing awareness
of the power IT uses and the need to make hardware more energy
efficient. Suppliers have been alive to that for the past
two-and-a-half years."
Phase two relates to the IT networks - "the distributed
environment" - which goes beyond the datacentre, servers or
individual computers, he says. "Green IT, in the sense of
energy-efficient computers, has not really opened up new revenue
streams for IT companies. It needs to be more software-based than
hardware-based."
Making informed
decisions
Detailed analysis throws up all kinds of surprises for companies
trying to manage and cut emissions, and this can help them make
more cost-effective decisions. For example, Logica's analysis of
its travel behaviour revealed some unexpected data that changed its
previous assumptions about how and where to spend its money.
"We were considering investing in a video conferencing room to
cut down on flying and assumed we should put it in the offices
where the largest number of people are working and therefore flying
from," says Tony Rooke, head of environment and sustainability at
Logica. "Instead, we found people were flying more to and from two
other locations." This information led the company to site the
conference room at a different office, cutting more airline travel
in the process. These are the kinds of findings his team is making
with its clients, he says.
Previously, analysis software served the accounts department and
only showed the financial cost of travel rather than the origin and
destination of flights. "Current reporting systems are financially
based. We drill down to the deeper data to acquire better knowledge
of what is going on," states Rooke.
Deloitte's Winstanley says, "These IT suppliers [provide]
systems that assist clients to work out the carbon cost of the
transaction as well as the business cost. It helps them decide
where to spend their money to ensure the maximum return."
Counting carbon
emissions
Most of the suppliers say they integrate their own software into
clients' existing systems in logistics, accounting, personnel and
other corporate departments. "The system is a data layer that sits
on top of existing data," explains Carbonetworks' Meehan.
The complexities of everyday corporate business provide a maze
of data to get their teeth into. For example, most companies have
previously not been aware of which business process
consumes the most energy because data is aggregated into
utility bills. In addition, utility bills are not yet framed in CO2
terms.
"What is clear is that this is a dimension to the companies'
business that hitherto they have not had to consider; carbon
produced had no cost associated with it and hence no real
attention," says Winstanley.
He says that will change once
legislation such as the
Emissions Trading Schemes deepen their roots in Europe and the
USA. According to Winstanley, these kinds of software products
could be applied in a range of systems, such as vehicle routing and
style of driving, dynamic building management, modelling of
air-conditioning use to lower demand, monitoring energy use in
industrial processes, and gathering data on carbon in the supply
chain.
Focus on business
processes
Carbonetworks offers a software platform which aims to solve
similar problems. "At the moment, people are using different
software for each cost centre, but there is nothing tying it all
together," says Meehan. "Companies are beginning to realise that
carbon dioxide is not an environmental problem, it is a business
and financial problem, but they do not have the tools to evaluate
it."
He says companies may be pleased, rather than disappointed, when
they rake through the carbon embedded in their everyday routines.
"One of the biggest lobbyists against
cap and
trade came to us. When we ran our system through it, we found
it had a carbon asset rather than liability. Clients think they are
sitting on risk, but they don't know the inventory."
SAP is another player in the field, already widely used in
corporate networks and systems. According to sustainability
operations manager Daniel Schmid, 60% of worldwide transactions in
finance or logistics are run by SAP systems, although he emphasises
(as do his competitors) that the company also adapts its
sustainability products to other systems.
When developing client systems, Schmid says SAP considers
regulations and compliance, impact on the brand, and how the
business's expenditure in this area is linked to the volatility of
resources and prices. Eco-efficient computers are the tip of the
iceberg, he says. "We are targeting the emissions produced outside
the IT hardware a company uses, supporting companies in being
sustainable. Our strength is that we look at the business process,
which crosses silos."
Each supplier claims that clients are crying out for this
wizardry - or will be once they find out what is required by
looming legislation such as the
carbon reduction commitment in the UK and the cap and trade
scheme in the US. Certainly, companies which have been looking to
improve
CO2 emissions management, such as
Tesco, are interested.
Sustainability and profitability
At a most basic level, the IT services provided by Logica, SAP,
IBM, Carbonetworks and the few others in the market are
housekeeping devices. Companies differ in their emphasis; some
suggest they are a tool for board-level decision-making, others
that they help cut the drudge out of carbon management. They all
aim to create a product that can be used online. The basic
principles of carbon emissions reduction are no mystery - if a
company has a policy of continually investing in the most
energy-efficient, low-carbon products and educates its staff, it
will minimise its footprint.
Where this new breed of software may come in handy is when
trade-offs have to be made, or cost-effectiveness measured. "We are
helping customers connect sustainability with profitability, or
they will not invest," says SAP's Schmid.
To be credible, the systems need to be fully auditable.
Suppliers suggest that the way round this problem is to build
evolving carbon accounting standards into their software and be
clear about the emissions factors they are using when extracting
energy data. Logica's Rooke says the onus is on the client. "As
with financial accounting, duff data in will produce duff data out.
The company will be responsible for the data they give us, the
buildings they include in the data, etc," he says.
It is clear that these developments will generate a major
utility that could play an increasingly important role in
determining the numbers disclosed by companies in their annual
report, where reporting may become mandatory. Their profile will
therefore rise if sales of the products take off.
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