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Durban conference showcases key role of ICT in climate change policies

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There will be lots written this week about the United Nations conference on Climate Change taking place this week in Durban.

Already the International Telecommunications Union (ITU), together with a coalition of industry partners, has said it will be using the Durban COP 17 conference to promote ICT technologies as the 21st century's most valuable problem-solving tools. ITU believes it is imperative that they be included as an integral part of global climate change policy.

 

The coalition's message is simple: ICTs such as smart grids, intelligent transport systems and the so-called 'Internet of Things' have extraordinary potential to reduce the greenhouse gas (GHG) emissions of other high energy-consuming industry sectors, and must be included in any meaningful climate change policies at the global, regional and national level. To prove its point, the coalition will be showcasing how the ICT industry is using technology to reduce its own carbon footprint.

During the 10-day conference, the coalition says it will undertake a number of initiatives to get the message across, including two new ITU reports showing how ICTs have helped Ghana mitigate and adapt to the effects of climate change.

With climate change and Durban in mind this week, though I suspect not as high profile as it has been previously, I liked this blog written by Colin Curtis, director of sustainability at Dimemsion Data, who discusses how the company's own IT department has performed in reducing the organisation's carbon footprint, notably through virtualisation.


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Environment Agency publishes Carbon Reduction Commitment League Table

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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 today from the number of hits on the site, but the table is available as an Excel file here

What Sustainability should learn from Steve Jobs

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I liked this blog post from Andrew Winston entitled 'What Sustainability should learn from Steve Jobs.'

Winston, who writes regularly for the Harvard Business Review argues that before the iPad was introduced,  many were asking why you'd need a tablet computer. Steve Jobs, he says, made us want one.

Winston suggests that most large companies today are "fast followers" -  but second place is nowhere in the tablet computer space.

"Fiscal and strategic conservatism breeds 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. Worth a read.

Carbon Trust launches footprint verification service

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The Carbon Trust has launched a new service to provide companies and organisations with independent verification of their corporate carbon footprints.

The Footprint Verification service is intended to help companies and organisations manage the increasing demand for carbon emissions data in CSR & annual reports and websites, as well as to support the disclosure of emissions to third party stakeholders, including shareholders and investors. 

Organisations that use the service will be able to display a Footprint Verification logo in conjunction with the carbon footprint data, showing that their emissions have been independently verified. The Trust says that the verified carbon footprint provided is compliant with both the internationally recognised GHG Protocol, as well as the Carbon Disclosure Project (CDP).

The new service follows new findings from the Carbon Trust that 50% of multinationals will look set to select their suppliers based upon carbon performance in the future.

Hard copies means hard choices: why low carbon thinking means ITTs for printers must change

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In this guest blog, Tracey Rawling Church, Director of Brand and Reputation at Kyocera Mita UK explains why the public sector must stop buying printers

Hard Copies Mean Hard Choices

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.

Links:

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 http://www.kyoceramita.co.uk/index/products/happy_customer_stories/happy_customer_stories_detail.L3ByaW50ZXJfbXVsdGlmdW5jdGlvbmFscy9jYXNlc3R1ZHkvbGVhZGluZ19pbnN1cmVyX3JzYQ~~.html

For the full results of latest independent research into printing attitudes and behaviour, email Tracey: trc@kyoceramita.co.uk

 

 

 

 

 

Carbon Disclosure Report says carbon reduction plans deliver better stock market performance

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A report by the Carbon Disclosure Project has suggested that companies that implement policies to reduce carbon emissions perform better on the stock market compared with those that do not.

The 2011 edition of the annual Carbon Disclosure Project (CDP) Global 500 report, which examines carbon reduction activities at the world's largest public corporations, has found for the first time in the ten year history of the survey, that the majority have climate change actions embedded as part of their business strategy. The report, written by professional services firm PwC, attributes this to growing board-level awareness of the link between energy efficiency and increased profitability.

The report, entitled Accelerating low carbon growth, analysed disclosures from 396 of the world's largest companies, which revealed 68% have climate change at the heart of business strategies, compared with 48% in 2010. There was also a marked rise in the number of companies reporting reduced greenhouse gas emissions as a result of emissions reduction activities (45%, up from 19% in 2010).

A correlation was also established between higher stock market performance over time, and representation on CDP's Carbon Performance Leadership Index (CPLI) and the Carbon Disclosure Leadership Index (CDLI). Companies with a strategic focus on climate change provided investors with approximately double the average total return of the Global 500 from January 2005 to May 2011.

Paul Simpson, CEO of the Carbon Disclosure Project, said: "The improved financial performance of companies with high carbon performance is a clear indicator that it makes good business sense to manage and reduce carbon emissions. This is a win win for business - the short ROIs many emissions reducing activities have, can help increase profitability. Companies yet to take action on climate change will have to work hard to remain competitive as we head towards an increasingly resourced constrained, low carbon economy."

Alan McGill, partner, sustainability and climate change, PwC said: "Historical financial performance is being exposed by climate change as an outdated model to assess long term business profitability and growth, when you consider the much wider range of financial and non - financial risks associated with business today. Today's investors have different information needs, which are leading to tougher verification regimes, more emphasis on executive and staffing responsibilities and incentives, and much more unforgiving examinations of the contribution of business to society. We are accelerating towards newer reporting models that better balance financial and non - financial performance."

Rising oil prices, energy supply risks and growing recognition of the commercial returns on investments in emissions reduction activities contributed to the growth in importance of climate change as a boardroom issue. Over half (59%) of reported emissions reduction activities delivered payback in three years or less according to company submissions. These include energy efficiency projects (building fabric, building services and processes), low carbon energy installations and staff behavioural change. Employee incentives to reduce emissions are now offered by 65% of companies, compared with 49% in 2010.

 The top 10 best performing companies this year are:

USA: Bank of America, Cisco Systems
Japan: Honda Motor Company, Sony Corporation
Germany: Bayer, BMW, SAP
United Kingdom: Tesco
Netherlands: Philips Electronics
Australia: Westpac Banking Corporation

CDP says there are 14 new entrants to the 2011 Carbon Performance Leadership Index, which counts only 29 companies due to more demanding criteria applied by CDP. These are:

USA: Air Products & Chemicals, Lockheed Martin, Morgan Stanley
Japan: Honda Motor Company, Sony Corporation
Germany: SAP
France: AXA Group, Schneider Electric
Italy: ENEL, FIAT
United Kingdom: British American Tobacco, BG Group, Glaxo SmithKline
Switzerland: Novartis

http://www.bbc.co.uk/news/business-14921740  

And the green terminology winner is....sustainability

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A recent survey by Greenbiz.com has examined what term companies use to best describe their energy efficiency or Green IT projects and initiatives.

For around half of the respondents, according to this report, the magic word used to describe their environmental initiatives is 'sustainability'. The second most used word or phrase is Corporate Social Responsibility, or Corporate Responsibility. Another term that is coming up on the rails is 'resilient', though for me that implies business continuity, not sustainability.

With sustainability in mind, the Dow Jones Sustainability Index annual review has been published. Here are details of the announcement which is good news for Samsung in the technology 'supersector'.    

Those not included in the World Index include Coca-Cola, Hewlett-Packard, and California utility PG&E, while Microsoft lost its place in the North America regional listing. CA Technologies was added to both the World and North American listings.

CZS promises a new approach to tackling energy efficiency programmes within organisations

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I was interested to see that the former Head of Sustainability at the Royal Mail, Dr Martin Blake, has set up a new organisation, Carbon Zero Solutions (CZS) to support organisation executives in the deployment of energy efficiency programmes that improve profitability and reduce environmental and social impact.

While at the Royal Mail, Dr Blake was the architect of the Carbon Management Programme at Royal Mail and oversaw a multi-pronged strategy in the areas of energy reduction and efficiency, waste management, water conservation and workplace diversity. The Royal Mail's team of energy experts is credited with reducing UK Royal Mail Group's annual energy bill by over £30million.

According to Dr Blake, "There are many examples of boards that have not pursued the benefits of energy reduction because they are being sold on outputs that cannot be adequately quantified or explained. Too many initiatives have been conceived and implemented in a piecemeal fashion. Individually they may have been effective, but unless taken together within a wider coordinated programme, it is unlikely they will each deliver quantifiable ROI. It is therefore not surprising that some board directors feel ambivalent or wary."

I wonder whether this will set a trend, with successful heads of sustainability leaving their organisations to set up a company, providing energy efficiency services to others. It will be interesting to see how this approach develops.

The CZS website says this about carbon reduction plans within organisations.

"Too often carbon reduction is hived off into a specialist function from where only incremental savings in energy costs can be made. At CZS we believe businesses could be more ambitious. We understand the importance of getting key stakeholders onboard and engaging the wider workforce. We are familiar with the many reasons to resist change and understand why some organisations remain fixed on 'business as usual' strategies. However, only when there is top down leadership, able to harness the intellectual capacity of an organisation, can the full potential of a business be realised."

 


 

Corporate sustainability strategy: now part of the CFO's remit

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Sometimes it seems as if corporate responsibility within the organisation for sustainability strategy is being passed around like a relay baton.

So far, those touched with responsibility for sustainability include the corporate social responsibility (CSR) team, marketing (because of the future brand and reputation implications in the UK of the Carbon Reduction Commitment (CRC) league tables), IT and Facilities who are having to manage and measure energy usage, and in theory, the CEO who should surely know the big picture at least.

Now, an Ernst & Young report, 'How Sustainability has Expanded the CFO's Role', recommends it is also the CFO's turn to pick up the baton, because, in the US at least, as Triple Pundit explains, sustainability trends are shifting the role of the CFO into 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 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 US 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."

Five suggested actions that CFOs can take to enhance corporate value through sustainability include the following:

• 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.

 

Using IT to focus on reducing excess inventory and improving sustainability

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A recent blog post on the Harvard Business Review has raised the issue of inventory, its impact on sustainability, and what IT can do about it.

The piece, by Andrew Winston highlighted organisations' previous inability to do much about their estimation processes, and what the consequent excess inventory's impact is on sustainability,

Winston suggests that the world is sitting on roughly $8 trillion worth of goods held for sale.That's $8 trillion worth of embedded environmental footprint, which could be reduced, saving money, energy and material.

The problem is that when it comes to managing inventory levels, organisations are falling down on demand planning i.e.predicting how much product customers want. As Winston points out, consumer product goods (CPG) companies spend a fortune on demand planning. And they have to: P&G's 2010 total inventory, for example, was valued on the balance sheet at $6.4 billion. 

Effective use of IT can play a significant role in making operations more efficient and sustainable. Winston suggests that using both demand sensing software and good management practices has helped P&G cut 17 days and $2.1 billion out of its inventory, saving money in manufacturing, distribution, and ongoing warehousing - and carbon, material, and water.

You can read the complete piece here


 

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