Trends of Awareness and Adoption Within Corporations by Fred Motari, Jia-Ching Lin, Kris Turner, Mary Dorn, Shixing He GREEN IT
Objectives/ Key issues 1. What are the IT-related environmental issues and how will that change? 2. How are environmental issues affecting the IT industry and IT organizations? 3. How should IT organizations and the IT industry respond to the environmental challenges and opportunities? 3
Top 10 Environmental Issues ØClimate Change ØEnergy ØWater ØBiodiversity & Land Use ØChemicals, Toxics & Heavy Metals Esty, D. and Winston, A. (2006), Green to Gold, Yale University Press, New Haven ØAir Pollution ØWaste Management ØOzone layer Depletion ØOceans & Fisheries ØDeforestation 4
Reasons for Environmental Thinking Ø Upside business Benefits- Getting ahead of the curve can lower both financial and operation risk and increase profits for stakeholders. (Toyota) Ø Management of Downside Risks- Legal and regulatory issues, Global Trade issues, Consumer backlash and public relations. (Sony Corp. ) Ø Value-Based concern for environmental stewardship- Marketing to the audience craving eco-friendly products ahead of the market curve. (BP) 5
IT/Business Disconnect on the Importance of IT Environmental Issues 6
TOP PRIORITY GREEN BUSINESS INITIATIVES IDENTIFIED BY SENIOR BUSINESS EXECUTIVES 7
Eco-Advantage Companies What are Eco-Advantage Companies? Those companies that seize Environmental Opportunities not just meet governmental requirements. “We set out to do good…and we ended up doing well. ” Lord John Browne BP Esty, D. and Winston, A. (2006), Green to Gold, Yale University Press, New Haven 8
Best Practices Ø Design innovative products to help with environmental concerns or create new eco-defined market spaces. Ø Push suppliers to be better environmental stewards. Ø Collect data, track performance of these suppliers. Ø Partner with NGOs and other stakeholders to learn about and find innovative solutions to environmental problems. Ø Build an Eco-Advantage Culture. Esty, D. and Winston, A. (2006), Green to Gold, Yale University Press, New Haven 9
Green IT Strategy Ø Purpose à à à à Reduce (grid) electricity use Reduce water use Reduce resource waste Reduce CO 2, and other green house gas emissions Reduce toxic chemicals released to the environment Enhance company’s image Reduce cost Most importantly, it’s about ensuring a sustainable future. 10
1. Reduce (grid) Electricity Use Ø Power factories with -solar panels (e. g. : Evergreen Solar, Sun Electronics) -fuel-cells (e. g. : GM, Dow, Ford) Ø Reduce data center over cool (e. g. : Discovery) Ø Replacing old servers with new and better ones Ø Computer virtualization Sun Electronics Inc. -(2008) Evergreen Solar around the world- Sun Electronics International, Inc. Retrieved October 25, 2008, from http: //www. evergreensolar. com/app/en/installations/? page=1&location=&type=2 -Felsinger A. (2008). Ford factory processes paint fumes to generate power. Retrieved October 25, 2008, from http: //gas 2. org/2008/09/29/ford-factory-processes-paint-fumes-to-generatepower/ -Ridder K. (2004). GM, Dow use fuel cells in Freeport, Texas factory. Retrieved October 25, 2008, from http: //www. allbusiness. com/automotive-industry-environment-alternative/10269071 -1. html - Mitchell R. (2008). Top 12 Green-IT Users: No. 2 Discovery Communications LLC. Retrieved October 25, 2008, from http: //www. computerworld. com/action/article. do? command=print. Article. Basic&taxonomy. Name=Servers+and+Data+Center&article. Id=310516&taxonomy. Id=154 11
2. Reduce Water Usage Ø Reduce domestic and landscape water use (e. g. : Adobe) Ø Increase industrial water recycle -Neal D. (2008, June). Green IT: Moving Beyond the 2% Solution. The Green IT issue, 15 -17. 12
3. Reduce Resource Waste Ø Reduce paper waste within office Ø Improving supply chain management to reduce inventory needs Ø Recycle 13
4. Green House Gas Reduction Ø Letting workers to do work at home (e. g. : ) Ø Implementation of alternative energy on-site generation. Printers (6%) LAN & Office Telecoms (7%) Mobile Telecoms (9%) PCs and Monitors (39%) (excluding embodied energy) Fixed. Line Telecoms (15%) Source: Gartner Inc Servers, including cooling (23%) -Neal D. (2008, June). Green IT: Moving Beyond the 2% Solution. The Green IT issue, 15 -17. ICT accounts for approximately 2% of global CO 2 emissions. That's equivalent to aviation. 14
5. Reduce Toxic Chemical Release Ø Industrial water treatment Ø Prevent the use of environmentally harmful chemicals (e. g. : mercury, PVC) -Greenpeace. (2008). i. Poison + i. Waste. Retreieved October 25, 2008, from http: //www. greenpeace. org/apple/itox. html 15
6. Enhance Company’s Image Ø Implementing green IT strategy not only helps the company to do all of the above, but it also helps the company to enhance its public image. 16
7. Reduce Cost Ø Another important reason for implementing Green IT strategies is cost reduction. Implementing well designed Green IT measures help companies save large amounts of money. Video Next 17
Forrester Survey of IT Professionals Focus 1. Awareness and adoption of IT within corporations 2. Trends by industry and geography 3. Vendors positioning their products to utilize “green mindshare” and shape corporate image (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 19
Forrester Survey Demographics: more than a dozen countries, 57% outside of U. S. Breakdown of Companies In Survey (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 20
Sustainability Importance within Corporate IT Operations (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 21
Recommendations For Course of Action Ø Create a Green IT “Action Plan” → an empirical means to documenting goals, priorities, and activities Ø Procurement → factor GREEN into purchasing process, rather than using as a tiebreaker, view sustainability as a major factor in procurement (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 22
Green IT Action Plan (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 23
Procurement Yes or No (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 24
Green IT Motivations: Top Down and Bottom UP Top Down → à corporate alignment à reduce IT operating expenses à improve brand image à comply with regulations à differentiate from competitors Bottom UP → à reduce energy consumption à improve reliability of IT infrastructure *overall European companies are top down (i. e. improve brand image) and U. S, companies tend to be bottomup (i. e. cut operating costs) (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 25
Quantitative Look at Motivators (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 26
Expanding Green IT’s Role to Improve Other Business Operations Ø by IT’s nature of interaction with all individuals in a given system, IT can be used to green other operations Ø can improve corporate footprint concerning à employee commuting à business travel à building HVAC systems à etc. (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 27
Examples of IT Greening Other Business Operations (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. 28
Sigma-Aldrich Definition of Sustainability Environmental Sustainability is a way to meet society's needs for products and services with progressively less negative impact on the world we live in. Reusing materials, reducing the amount of raw materials consumed and recycling materials when possible makes sense both for the environment and business. Efficient use of materials not only reduces the waste added to the air, water and landfills, but adds value to the production process by reducing costs. http: //www. sigmaaldrich. com/customer-service/social-responsibility. html, viewed October 31, 2008. 29
Green IT Plan http: //www. sigmaaldrich. com/customer-service/social-responsibility. html , viewed October 31, 2008. 30
The fall of 2007, Computerworld began to identify companies which are implementing smart, efficient strategies to achieve "green IT. “ And they get top 12 Green IT users and vendors. Criteria used to select the top 12 green companies v. Part I: Checklist ü Top Level ü Monitoring & Measuring ü Employee Practices, Recycling ü Facilities/Data Center v. Part II: Essay ü No more than 500 words to describe organization’s efforts to be greener. source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=311897, viewed Oct 30, 2008 31
Top 12 green-IT users and 12 vendors 12 GIT users 1) Highmark Inc. 2) Discovery Communications LLC 3) First National of Nebraska Inc. 4) Perkins and Will Inc. 5) Snohomish Public Utility District 6) World Wildlife Fund 7) Austin Energy 8) Well. Point Inc. 9) Ryder System Inc. 10) Marriott International Inc. 11) Monsanto Corp. 12) Wachovia Corp. 12 GIT vendors 1) IBM 2) BT Group PLC 3) Qualcomm Inc. 4) Aplicor Inc. 5) Fujitsu America Inc. 6) Microsoft Corp. 7) Hewlett-Packard Co. 8) Network Appliance Inc. 9) Other World Computing 10) Verizon Wireless 11) Computer Sciences Corp. 12) Sun Microsystems Inc. source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=312485, viewed Oct 30, 2008 32
#1. GIT user: Highmark Inc. q Power reduction q Data center cost reduction Before 24, 000 sq ft $ 45, 000 / month Only for IT, the target reduction is 5% this year After 86, 000 sq ft $ 45, 000 / month source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=310494 , viewed Oct 30, 2008 33
#2. GIT user: Discovery LLC q q q Received LEED certification for its headquarters • there are just 3 data centers in US received LEED certification Server consolidation and virtualization • focus on an audit to ensure all the equipment is fully utilized • use new software product to reduce its servers from 850 to 535 Other tactics • unblock air vents and add blanking panel in equipment racks • reset the temperature in data center • install reengineered , high-efficiency chillers • use laptop and network to telecommute and teleconference Overall, Discovery cut its energy cost by 27% in its headquarters 1 source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=310494 , viewed Oct 30, 2008 34
#11. GIT user: Monsanto Corp. q. Monsanto’s new data center is designed greenly • No need for power or cooling units on the data center’s floor • A glass screen in its new data center blocks 60% of the sun’s rays, lowering demands on the building’s cooling systems. q Monsanto’s sever centralization strategy • Over the past decade, Monsanto has consolidated more than 10 dispersed data centers into a single hub • Over the past three years, Monsanto has transferred 334 servers into just 16 computer machines “Major ”reduction in energy costs and heat to be dissipated source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=311085 , viewed Oct 30, 2008 35
#4. GIT vendor: Aplicor Inc. q Introduction: A software company provides CRM and ERP applications q Why is the top vendor: Demonstrates leadership and innovation to reduce energy consumption in IT data centers and leverage technology to conserve energy and lower carbon emissions 1 q New Green IT Product: GREEN program (Global Reach for Energy and Efficiency Next Generation) • improve power consumption • reengineer power distribution • new techniques in cooling efficiency • server virtualization • new footprint schemas for improved equipment density GREEN program has realized about 19% reduction in power and carbon dioxide emissions 2 http: //www. aplicor. com/press_release_2 -18 -2008. htm , viewed Oct 30, 2008 36
What will push IT buyer to green ? To green A recent Forrester Research Inc. survey found that just 15% of U. S. companies have green-IT plans, although another 40% say they're working toward that 1 Frank Gens, an analyst at market research firm IDC, said: “The key is economic considerations, especially as governments establish more incentives and penalties. ” source: http: //www. computerworld. com/action/article. do? command=view. Article. Basic&article. Id=310494 , viewed Oct 30, 2008 37
® What is LEED ? Ø A voluntary, consensus-based national standard for developing highperformance, sustainable buildings. Ø Launched by the U. S. Green Building Council (USGBC) in 2000 USGBC’s Guiding Principles 1. Promote the Triple Bottom Line: environmental, social and economic prosperity 2. Establish Leadership 3. Reconcile Humanity With Nature 4. Maintain Integrity 5. Ensure Inclusiveness 6. Exhibit Transparency http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=1718, Viewed November 1 2008 http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=77 38
® Why the LEED initiative ? LEED® Goal To significantly reduce or eliminate the negative impact of buildings on the environment and on the building occupants. Environmental benefits: Ø Enhance and protect ecosystems and biodiversity Ø Improve air and water quality Ø Reduce solid waste Ø Conserve natural resources http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=1718, Viewed November 1 2008 http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=77, Viewed November 1 2008 39
® Why the LEED initiative ? Economic benefits: Ø Reduce operating costs Ø Enhance asset value and profits Ø Improve employee productivity and satisfaction Ø Optimize life-cycle economic performance Health and community benefits: Ø Improve air, thermal, and acoustic environments Ø Enhance occupant comfort and health Ø Minimize strain on local infrastructure Ø Contribute to overall quality of life http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=1718, Viewed November 1 2008 http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=77, Viewed November 1 2008 40
® LEED Certification Process Register Your Project Track Progress & Document Achievement Apply for Certification https: //www. usgbc. org/Show. File. aspx? Document. ID=4687, viewed November 01, 2008 41
Green Building Rating System point distribution 27% of all the points awarded are based on energy saving 23% of all the points awarded are based on the evaluation of the air handling system “USGBC developed LEED rating system as a measure to asses the sustainability of buildings or ‘greenness’. ” Peter Morris, Lisa Fay Matthiessen. (2005). Budgeting Green: A Comprehensive Methodology. AACE International Transactions, ES 61 -ES 64. Retrieved November 1, 2008, from ABI/INFORM Global database. (Document ID: 909948061). https: //www. usgbc. org/Show. File. aspx? Document. ID=4687, viewed November 01, 2008 42
® Levels of LEED Certification Four levels of certification § § LEED Certified 26 - 32 points Silver Level 33 - 38 points Gold Level 39 - 51 points Platinum Level 52+ points (69 possible) LEED® CERTIFICATIONS Silver Sources: Gold http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=1718, Viewed November 1 2008 http: //www. usgbc. org/Display. Page. aspx? CMSPage. ID=77, Viewed November 1 2008 Platinum 43
Green Building by the Numbers September 2008 44
Ø Ø Ø Leading life science and high technology company Operating in 35 countries worldwide Employees over 6800 employess Headquarters in Saint Louis Market Cap $5. 3 billion 45
Interview w/ Carl Turza CIO Sigma-Aldrich Corporation Ø Background à B. S. University of Illinois, Champaign in economics à MBA University of Illinois, Chicago 46
What strategies do you use to convince “conservative, ” traditional bussiness thinking colleagues to adopt green policies that may not be quite as cost efficient but are far more ecological? (convince green) Ø Carl à If I know my audience isn’t particularly green oriented, I don’t push the green. à Take an economic approach, show up front cost savings associated w/ green policy. à Short term vs. Long Term, show returns over time, if there is an initial investment show it will pay for itself in 3 years. 47
Since you have become CIO, what specific actions have been taken by your people to increase the “greenness” of the IT function at Sigma-Aldrich? (green examples) 1. Virtualization and centralization of data centers *50 centers world wide, 4 in STL 2. Outsourcing non-strategic functions *India or any company with a global presence 48
In your opinion from an IT point of view what priority are Sigma executives giving to sustainability? (company priority) Ø In the company we are always trying to find ways to use less energy. Ø In the chemical industry sustainability coincides w/ safety and general consciousness of the environment 49
What would you say is the main driving force concerning making Sigma-Aldrich a more green company and what are the principle motivations, cost saving, image, etc. ? (driving force) Ø 2 Main Drivers 1. Project high integrity brand image (awareness) – “good business” – win (cost savings and sustainability) 2. Contextual Search Capability – phase out catalogs and supplement with website, search engine gets customer to appropriate product as well as similar products. *To come “Your Favorite Gene” project 50
How do you keep up with trends in Green IT, especially in a global company within a flat world? (keeping up) Ø $35, 000/yr. subscription to Forrester Research Ø Consults with 2 local CIO firms Ø Network of other CIO’s, whom I consults with frequently. Ø Periodicals à CIO Insight à CIO Magazine 51
Would you like to share any upcoming endeavors/projects concerning green IT and what strategies will be used for success. (to come) Ø Utilize EDI (electronic data interchange) to handle accounts payable/receivable, currently 1% done EDI Ø More integrated B 2 B embedding within SAP Ø Automated Purchasing, show cost saving 52
Summary Information systems, is the major force driving productivity growth in the last half century, and should have a critical role in reducing environmental depletion. 53
References Ø http: //www. computerworld. com/action/article. do? command=view. Article. Basic&arti cle. Id=312485 , viewed October 30, 2008 Ø http: //www. computerworld. com/action/article. do? command=view. Article. Basic&arti cle. Id=310494 , viewed October 30, 2008 Ø http: //www. computerworld. com/action/article. do? command=view. Article. Basic&arti cle. Id=310516 , viewed October 30, 2008 Ø http: //www. computerworld. com/action/article. do? command=view. Article. Basic&arti cle. Id=311085 , viewed October 30, 2008 Ø http: //www. aplicor. com/press_release_2 -18 -2008. htm , viewed October 30, 2008 54
References (1) Mines, C. (2008), More Green Progress In Enterprise IT, Forrester Research, Inc. (2) Mines, C. , Daley, E. , Lo, H. , and Muteba, C. (2008), Inquiry Insights: Green IT, Q 3 2008, Forrester Research, Inc. (3) http: //www. sigmaaldrich. com/customer-service/socialresponsibility. html, viewed October 31, 2008. (4) Turza, C, CIO Sigma-Aldrich Corporation, Interviewed by Kristopher Turner, November, 7, 2008. 55
References Ø Felsinger A. (2008). Ford factory processes paint fumes to generate power. Retrieved October 25, 2008, from http: //gas 2. org/2008/09/29/ford-factory -processes-paint-fumes-to-generate-power/ Ø Ridder K. (2004). GM, Dow use fuel cells in Freeport, Texas factory. Retrieved October 25, 2008, from http: //www. allbusiness. com/automotive-industry-environment -alternative/10269071 -1. html Ø (2008) Evergreen Solar around the world- Sun Electronics International, Inc. Retrieved October 25, 2008, from http: //www. evergreensolar. com/app/en/installations/? page=1&location= &type=2 Ø Neal D. (2008, June). Green IT: Moving Beyond the 2% Solution. The Green IT issue, 15 -17. Ø Mitchell R. (2008). Top 12 Green-IT Users: No. 2 Discovery Communications LLC. Retrieved October 25, 2008, from http: //www. computerworld. com/action/article. do? command=print. Article Basic&taxonomy. Name=Servers+and+Data+Center&article. Id=310516&t axonomy. Id=154 56
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