May 27, 2021

Sustainable IT leads to significant benefits, says Capgemini

capgemini
sustainability
sustainableIT
Carbonfootprint
Kate Birch
7 min
While implementation of sustainable IT practices leads to significant benefits, it still isn’t a focus for most organisations, finds Capgemini

As organisations continue to invest in digital technologies, the enterprise IT carbon footprint is expected to grow significantly, so that by 2025, enterprise IT will have the equivalent carbon footprint of 463 million passenger vehicles driven for a year or 256 million homes’ electricity usage per year.

That’s according to a new report entitled Sustainable IT: Why it’s time for a Green revolution for your organisation’s IT from the Capgemini Research Institute, which outlines a three-stage roadmap to accelerating sustainable IT.

And yet, organisations do not view this as an area of concern, with the report revealing that 78% planning to reduce less than one-fourth of their carbon footprint through sustainable IT in the next three years without carbon offsets.

Lack of awareness of IT carbon footprint

This lack of concern is in part down to the fact that organisations are largely unaware of the environmental impact of IT with research revealing that just a third of organisations are aware for example that the production of mobiles and laptops has a higher carbon footprint than the usage of these devices over their lifetime.

Awareness of a company’s own IT carbon footprint is lacking too with less than half (43%) of executives globally aware of their organisation’s IT footprint. While banking, consumer product, insurance, automotive and retail sectors show higher levels of awareness, the industrial manufacturing sector and energy and utility companies are least aware.

“Sustainability must be at the core of our global effort for post-pandemic recovery, and IT cannot be neglected," says Cyril Garcia, CEO of Capgemini Invent. "Organisations need to recogniSe and act on the carbon cost of our digital world by accelerating the move to business models which are supported by sustainable IT capabilities."

 

As organisations continue to invest in digital technologies, the enterprise IT carbon footprint is expected to grow significantly, so that by 2025, enterprise IT will have the equivalent carbon footprint of 463 million passenger vehicles driven for a year or 256 million homes’ electricity usage per year.

That’s according to a new report entitled Sustainable IT: Why it’s time for a Green revolution for your organisation’s IT from the Capgemini Research Institute, which outlines a three-stage roadmap to accelerating sustainable IT.

And yet, organisations do not view this as an area of concern, with the report revealing that 78% planning to reduce less than one-fourth of their carbon footprint through sustainable IT in the next three years without carbon offsets.

Lack of awareness of IT carbon footprint

This lack of concern is in part down to the fact that organisations are largely unaware of the environmental impact of IT with research revealing that just a third of organisations are aware for example that the production of mobiles and laptops has a higher carbon footprint than the usage of these devices over their lifetime.

Awareness of a company’s own IT carbon footprint is lacking too with less than half (43%) of executives globally aware of their organisation’s IT footprint. While banking, consumer product, insurance, automotive and retail sectors show higher levels of awareness, the industrial manufacturing sector and energy and utility companies are least aware.

“Sustainability must be at the core of our global effort for post-pandemic recovery, and IT cannot be neglected," says Cyril Garcia, CEO of Capgemini Invent. "Organisations need to recogniSe and act on the carbon cost of our digital world by accelerating the move to business models which are supported by sustainable IT capabilities."

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How is the tech industry helping to drive sustainable change

Non-tech companies across all sectors are looking to the tech industry to lead the change when it comes to sustainable IT with close to half (48%) of organisations, according to Capgemini research, saying tech firms should be setting standards and deciding the normal for sustainable IT with a quarter stating they have rejected tech sellers who do not adhere to their sustainability procurement rules.

And the tech sector is starting to take proactive steps to decarbonise its IT operations, services and products with multiple tech firms implementing sustainable IT initiatives.

Google became carbon neutral in 2007 and has offset its entire carbon footprint since its inception by investing in ‘high-quality carbon offsets’ and it also aims to run its data centers on carbon-free energy by 2030.

Microsoft is planning to become carbon negative by 2030 and 2023, 70% of its massive data centers will run on renewable energy. The tech giant charges an internal carbon fee of US$15 per metric ton of carbon emissions to encourage its departments to be as sustainable as possible. And Apple is aiming to become carbon neutral by 2030 across its entire business and manufacturing supply chain.

Finally, Amazon, which is committed to be carbon neutral by 2040, has now invested in 6.5 GW of wind and solar projects to power their AWS data centers and fulfilment centers.

Benefits of sustainable IT

It’s not just that it’s good for the environment, but investing in and implementing sustainable IT can delivery other significant benefits, reports Capgemini, with research finding that organisations which have scaled sustainable IT use cases have achied on average a 12% cost reduction and multiple other benefits.

Those companies with a highly mature end-to-end approach for sustainable IT initiatives, just 6% of organisations according to Capgemini research, deliver significantly mor benefits across multiple parameters compared to others. Not only have such ‘high maturity organisations’ improved their ESG score and therefore brand image (61% compared to 45% of less mature organisations, but 56% have improved customer satisfaction (versus 43%) and 44% say green practices deliver tax savings (versus 22%).

Which sustainable IT uses cases deliver the most benefits

So, what can companies do? Following assessment of 24 sustainable IT use cases across six categories, Capgemini reveals the use case adoption and scaling as well as the use case that delivers the most benefits in each category.

  1. IT hardware/user devices The auto switch-off hardware/features use case delivers the highest cost savings (14% on average) from power reduction while reducing carbon in this category. Chandramouli Subrahamanayan, head of IT at software firm Citrix, says: “We ensure that our sustainability principles are driven through our applications. when our customers use our Virtual desktop infrastructure platform for compute we automatically turn off or use ‘send to sleep’ mode whenever any computer resources are not being used. Those type of things add a lot more value to the sustainability cause.” 
     
  2. Cloud computing/virtualisation Switching to a green cloud architecture and framework has delivered a 19% cost savings among organisations that have been able to scale the solution organisation-wide.
     
  3. Applications and data Developing sustainable architectures to rationalize applications, identify and decouple energy-intensive applications offers 11% cost savings. Organizations should audit their applications so they can identify the most energy-intensive applications and take steps to address the worst offenders.
     
  4. Cooling technique Data centers are an organization’s second largest consumer of energy, with 35% of this energy taken up by powering cooling equipment. Any initiative that can reduce data center cooling will help to make a significant contribution to carbon reduction. Using machine learning to optimize cooling systems delivers 8% cost savings. Verizon – the American telecommunication organization – has used machine learning for cooling management to save 55 million kilowatt-hours of energy per year across its 24 data centers. The location of data centers also plays a very important role in energy consumption. Microsoft tested an underwater data center, which provides edge connectivity in coastal areas. The sub-surface sea water provides free and continuous cooling, creating an energy-efficient data center design. 29Among all the use case categories, the most beneficial use case is also the most adopted in this group.
     
  5. Utilization Using AI/ML to optimize data center utilization delivers cost savings of 9% among those who have deployed it. AI/ML have significant potential when it comes to sustainability (see our research on AI for climate action30). Optimizing workflows and enabling dynamic scheduling based on renewable power are critical load balancing techniques that AI/ML can deliver. Google shifts execution of non-urgent workloads in their data centers to when low-carbon sources of energy are abundant.
     
  6. Energy efficiencies and usage The cost of running and cooling servers far exceeds the initial price of hardware. It is therefore critical that energy-rated servers like 'Energy Star' are mandated in procurement.

 

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Jun 4, 2021

Charting the rise of the chief sustainability officer

chiefsustainabilityofficer
cso
Sustainability
ESG
Kate Birch
4 min
Fortune 500 companies hired more chief sustainability officers in 2020 than in the previous three years combined. Business Chief charts the rise of the CSO

There has been a dramatic increase in the hiring of the chief sustainability officer (CSO) role among Fortune 500 companies, with demand for CSOs growing 228% in corporate America over the last decade, according to the latest report from CSO recruitment firm the Weinreb Group.

There were more first-time CSOs recruited by Fortune 500 companies in 2020 than the previous three years combined, with numbers of CSOs in corporate America soaring from just 29 in 2011 to 95 today, demonstrating the importance corporations are placing not just on reducing their environmental impacts, but also in supporting issues of social justice.

Businesses are increasingly under pressure to assume more responsible practices with customers, regulators and investors demanding increased transparency of business ESG performance.

And the past year in particular has been seen great upheaval, with increased new attention brought to “social justice, climate change, and an ever-widening political divide”, according to Ellen Weinreb, founder and CEO of the Weinreb Group, which has tracked the rising role of CSOs over the past decade.

CSO role is expanding and shifting

But it’s not just the number of CSOs that have changed, sustainability teams are getting bigger, with the average team size increasing from five professionals in 2011 to 15 today, according to the report. 

This is in part due to the fact that the CSO role has expanded beyond simply ‘sustainability’ to incorporate social justice too. Sustainability isn’t exclusively about the environment anymore. The role has also come to incorporate social justice, especially with the rapid growth of, and increased attention on, environmental, social, and governance, or ESG.

And many roles recently have been renamed as such with Head of ESG or ESG Officer becoming increasingly prominent.

Women make up over half of CSO roles

What's also changed over the last decade is the percentage of women holding the title of Chief Sustainability Officer.

A decade ago, in 2011, the majority of CSO roles were held by men (72%), with just 10 of the 29 then CSO roles held by women. A decade on, in 2021, the percentage of women in CSO roles has almost doubled, now accounting for more than half (54%) of CSO positions.

However, according to the report ‘The Chief Sustainability Officer 10 Years Later’, despite the movement toward gender balance within the role and its expanded focus on social justice, in particular, in 2021 the CSO position remains overwhelmingly ‘white’.

Probably not surprising considering there are just three black CEOs at Fortune 500 firms.

How the chief sustainability officer role has grown

The first-ever named chief sustainability officer in a US publicly traded company was Linda Fisher for Dupont, who joined the chemical giant in 2004 as CSO, just at the time when innovative companies were looking at sustainability as a driver for business growth. Joining from the Environmental Protection Agency where she spent 13 years, Fisher was a corporate sustainability trailblazer, spending more than a decade as CSO here, and leading DuPont’s efforts to establish its first set of market-facing sustainability goals.

By 2006, a slew of firms had joined the CSO movement, including Mastercard, Nissan and Microsoft; and Kellogg’s became the first firm to replace a CSO with Dianne Holdorf taking over from Celeste Clarke. And by 2011, a decade ago, Coca-Cola, Verizon, AT&T and P&G had appointed their first CSOs.

In fact, it was in 2011 when Virginie Helias invented her idea of the perfect CSO job – to make sustainable consumption not only possible, but ‘irresistible’ – and pitched it P&G’s then CEO. A decade later, in 2021, and Helias is still in the job she first created.

The majority of CSOs have been internal hires, such as Peter Graf of SAP, who joined the software giant in 1996, and served as EVP for Marketing before being named CSO in 2009. The same is true at UPS, whose first-ever CSO, Scott Wicker, started at the package delivery giant 34 years before being named CSO in 2011. Increasingly, however, external hires are being made with organisations increasingly searching for more high-profile leading voices in the ESG forum.

In February 2021, JP Morgan hired former British high-profile Labour politician Chuka Umunna while just last month hotel chain Accor hired high-profile French politician Brune Poirson, who has previously championed the anti-waste law within the French government and was secretary of state for the environmental transition for three years.  

 

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