To boost profitability, we can cut IT costs, as it’s easy to lop off a little fat there. Apparently IT also generates 2% or more of the carbon footprint so if we cut their costs we save carbon too. But hang on, by spending more on IT can’t we boost a company’s profit and lower carbon use across the enterprise? With the right attitude yes. Let’s check out some examples.
A recent study indicated that companies with a true focus on sustainability are more profitable and more resilient than their peers. The study conducted by A.T. Kearney, a global management consulting firm , found that of 99 firms on the Dow Jones Sustainability Index, in 16 of the 18 industries examined, those businesses with a commitment to sustainability outperformed industry peers over three- and six-month periods by 10 percent and 15 percent respectively.
At Wal-Mart, they are implementing strategies and technologies in their new stores and their vehicle fleet that will cut greenhouse gas emissions significantly—they hope to see a 25 percent improvement in their fleet in three years and a 20 percent boost in store efficiencies in the next seven years. By using technologies that measure and report energy consumption from top to bottom, CFOs and other managerial personnel possess the information they require for determining the true business cost of energy. This information can then drive decisions about future investments for lowering energy consumption and reducing operating expenses.
Using green IT strategies, companies can improve energy consumption on the production side as well. Working with Toyota to help them reach their 5-Year Environment Plan in their vehicle production strategies, Fujitsu and Toyota developed a Green IT vision statement that guided their company in optimising infrastructure, managing energy use, and monitoring the lifecycle of IT assets. IT was a major contributor to meeting these goals.
As part of overall sustainability plans, green IT can help businesses achieve environmental goals on three key fronts: immediate reduction in operational expenses, informing long-term infrastructure investments, and guiding business policy and procedural improvements. It is this latter one that has most impact across the enterprise, but also most management maturity.
It comes down to strength of leadership. When an IT department develops green purchasing and waste management policies for everything from paper to e-waste, it sets a green example for other departments to emulate. Sun Microsystems, for instance, adopted plans for green purchasing and energy savings that would result in a fast ROI. Their Finance department was quickly brought on board for the project, and eventually word of their improvements spread. Today, the company is looking to reduce overall energy used in manufacturing its products.
Can IT rescue the company, well perhaps not. Can the contribution from IT be leveraged into improvements across the enterprise, yes. And could cost cutting of IT blindly prevent this from happening, quite possibly.
For more information about this topic try The Truth About Green Business