Sustainable IT KPMG Publication D. Brack Co-Author

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KPMG advisory publication around the topic of sustainability.

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Sustainable IT KPMG Publication D. Brack Co-Author

  1. 1. I T A DV I S O RYSustainable ITThe case for strategic leadershipA DV I S O RY
  2. 2. About this paper The purpose of this paper is to provide a practical discussion about sustainable information technology (IT) and key ideas in the industry at present. KPMG’s IT Advisory practice recognize the significant amount of literature on sustainability and sustainable IT available in the public domain. This paper seeks to provide business people with a primer on what sustainable IT means to them and their business, the directions it may follow and actions they may consider to stay current. Terminology For the purposes of this paper, we have chosen to use the term “sustainable IT”. In the Information Communications and Technology (ICT) industry, this is used interchangeably with “green IT” KPMG believes that “green IT” is a restrictive . term that limits the assessment of information technology to environmental factors, whereas “sustainable IT” incorporates the economic, environmental and social factors around technology and innovation. Continued research This paper contributes to the collection of KPMG publications that address issues around climate change and sustainability. It builds on KPMG’s technology thought leadership position, and we invite you to contribute to further research by contacting one of our firms’ professionals listed in this document. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss1 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  3. 3. ContentsExecutive summary 3Foreword 4Introduction 5Key drivers 7Power from the grid 8Competitive advantage 9Sustainable IT approach 11Sustainability reporting, legislation and regulations 15Big business in sustainability 16Concluding remarks 19Glossary 24Contacts 25 Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 2 firms are affiliated with KPMG International.
  4. 4. Executive summary • Sustainable IT is essential to the success of your business, it is no longer an “if” it is now a “when” and “how businesses approach the economic, , environmental and social elements to support business survival” .“ T he global inform ation and comm unications technology industry accounts for • Accounting and financial reporting standards have taken centuries to evolve to their current state. While voluntary reporting and global guidelines around sustainability reporting already exist, KPMG predicts that technologists will be asked by the business to support comprehensive sustainability, environmental, emissions and carbon­use reporting covering the organization and its value chain within five years, to the same level of sophistication that approximately two exists today for financial information. percent of global carbon dioxide • Forward thinking organizations around the world are already self­disclosing emissions, a figure sustainability reports and making sustainability related commitments to the market place. Certain countries and jurisdictions have mandated laws and equival ent to imposed regulations around various discrete aspects of sustainable IT. This is aviation. ” presently in a formative state and mainly focused on eWaste and the disposal of hazardous materials in technology hardware. Organizations may need to Source: Gartner, Inc., IT Vendors, Service comply with increasing demands for environmental reporting based on new Providers and Users can Lighten IT’s regulations. However, the ability to shape the rules in the formative stages Environmental Footprint, Simon Mingay, 5 December 2007 may be just as important as compliance. • There are simple, straightforward actions that may be taken to commence sustainable IT behavior immediately. These include power management tools, This two percent figure relates considered print/paper management, and the owners of equipment taking to the entire IT lifecycle – responsibility for the costs of cooling and consumption. design, manufacture, distribution, transport and use. This includes business, • A medium to long­term sustainable IT strategy should be strongly linked to government and consumer the overall business strategy as well as the organizations’ overall sustainability use, but no consumer objectives. There are many options to consider regarding capital expenditure electronics other than cell around data center relocation and redesign, storage considerations, phones and PCs. virtualization, innovative hardware and sustainability awareness training. All of these should be considered with a view to economic, environmental and social impacts. • Sustainable IT is a tool for competitive advantage. It may be used to decrease overall operational costs and protect against shocks in the commodity or energy markets. It may also allow a business to be seen as a preferred supplier and help to attract and retain skilled staff, particularly in a tight labor market and the associated “war for talent” . Sustainable IT © 2008 KPMG International. KPMG International is a Swiss3 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  5. 5. ForewordSustainable IT has emerged as a key factor affectingbusinesses today. Executives are under pressure to leadthe adoption of sustainable business practices.Sustainable IT has emerged as a key technology solutions have the abilityfactor affecting businesses today. to reduce energy costs and emissions.Executives are under pressure to lead Management should be aware ofthe adoption of sustainable business these alternatives, and decidepractices. whether to embrace leading edge technologies, potentially generatingThe current environment has seen cost efficiencies and competitiveenergy costs rising at an alarming rate. advantages for their business and Egidio ZarrellaIt is important to consider the ever clients, or wait for sustainable IT topresent operational expenditure Global Partner in Charge become a business­as­usual activity.pressures on IT within many IT Advisorybusinesses, and that relationship with Sustainable IT is a source of risk aspower use, especially in the current well as opportunity, it coverseconomic climate. Much of this important topics that need to bepower usage is concentrated in data understood and managed. IT may be acenter environments, for the provision significant part of the problem, butof power and cooling for IT systems. may also be a part of the solution.These cost pressures will be driving There is an opportunity for bothenergy saving initiatives, with the business and IT leaders to collaborateadditional benefits of a reduction in to deliver on sustainability objectives.environmental impact. Key drivers for action are:Executives should understand whatsustainable IT means for their business • Cost optimizationand what they should be doing about • Rising energy costs and limitedit. We believe that with rising energy electricity supplycosts, and a strong global focus onclimate change, businesses should • Regulations, standards andconsider action to improve their compliancecorporate social standing, reduce • Corporate citizenship and reputationenergy waste, reduce consumptionand help to preserve the environment. The challenge for executives is toIn doing so, businesses stand to consider the economic, social andachieve a variety of internal and environmental implications to achieveexternal benefits, including potential a balanced outcome for theircost savings. organization.Sustainable IT has spawned a number I hope this paper provides insight andof new industries, technologies and provokes thought on the topic ofvendor solutions. Innovative sustainable IT. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 4 firms are affiliated with KPMG International.
  6. 6. Introduction There is a great deal of scientific research and commentary around the impacts of climate change and global warming. It is now widely accepted that the manner in which we live and conduct business is having a harmful impact on our environment and climate. Sustainable IT is about the economically, environmentally and socially responsible practices around information technology. The purpose of this paper is to inform business leaders on the critical importance of these IT related issues. • Economic – in the form of cost efficiencies and competitive advantage. • Environmental – in the form of energy, waste and consumption efficiencies. • Social – in the form of the evolution of sustainability reporting and the development of sustainable organization culture. For businesses to remain competitive and profitable, they should consider their approach to sustainable IT in the context of their overall business strategy. Otherwise, they face the risk of rising operational costs and a disadvantage when compared to their competitors. Competitive, sustainable IT may be used to create financial value and generate operational savings. Similar to the way compliance, risk and issues such as security have become essential considerations to any organization in recent times, sustainable IT will evolve from a marginal business trend to business­as­usual activity in the next few years. This paper notes some short, medium and long­term sustainability strategies that can help measure, manage and limit the environmental impact of an organization’s IT. The evolution of accounting and financial reporting standards has taken hundreds of years to evolve to the current state. Reporting around an organization’s sustainability impact is currently limited; however, KPMG expects this to change quickly. Certain countries and jurisdictions have enacted laws and imposed regulations around various discrete aspects of sustainable reporting, a trend that is sure to take hold globally as climate change issues come to the fore. 8.2 out of 10 people prefer Corporate citizenship recognizes that an organization does not and should not act environmentally in isolation of the communities within which it operates. Globally, organizations are recognizing the widespread benefits of a more concerted approach, responsible companies. harmonizing their organizational objectives and the achievement of important Source: Ethical Corporation economic, environmental and social responsibilities. Striving to become a good corporate citizen is now considered a responsible and legitimate business objective as well as preferred practice with the identification of economic gains, and for some organizations it is now a main priority. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss5 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  7. 7. An effective approach to sustainable IT may favorably influence the external andinternal perception of an organization. Potential internal benefits Potential external benefits • Enhanced ability to attract and • Enhanced ability to attract retain skilled resources customers and investors • Improved cost efficiency of • Enhanced ability to attract skilled operations resources and strategic alliances • Economic benefits of a long term • Enhanced public image and sustainable IT strategy reputation • Decreased operational costs • Government incentives / utility company rebates • Protection against energy price shocks • Positioned well to meet potential regulatory complianceA long­term sustainable IT strategy should be strongly linked to the overallbusiness strategy and the organizations overall sustainability objectives with aview to the economic, environmental and social considerations. Source: KPMG International, 2008Sustainable IT should be considered a business imperative, it can be acompetitive differentiator and the potential benefits reach beyond theenvironment and society into the economic realm (with Extended ProducerResponsibility there may even be legal ramifications). Business may soon bejudged on their sustainability credentials by legislators, shareholders, employeesand customers. IT has a key and significant role to play as these changes tobusiness practices take place. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 6 firms are affiliated with KPMG International.
  8. 8. Key drivers Sustainable IT concerns originated from the realization that data centers consumed significant amounts of energy, and raised awareness of the environmental impacts of the end­to­end lifecycle effects of technology hardware. This includes the manufacture, transport, use and disposal of computer equipment, more specifically the growing volumes of eWaste arising from the rapid obsolescence of computer equipment. Some of the key drivers of sustainable IT include: Cost optimization Capital expenditure and operational expenditure are key cost measures that should be considered when looking at IT costs. If operational efficiency can be improved, this may result in reduced operational expenditure. Rising energy costs and limited electricity supply It is recognized that IT consumes significant amounts of energy. The current volatility in the cost of energy and resultant exposure to rising energy costs may lead many organizations to reconsider the energy efficiency around the use of technology. Compounding this issue, in many parts of the world, even today, the current electricity grid cannot support the anticipated growth in technology­related consumption. Regulations, standards and compliance There is presently limited legislation and regulation around the reporting of sustainability. As this is presently in a formative state, organizations are in a position to influence and direct policy and regulation. As time passes and environmental monitoring is determined, formalized and enforced, regular reporting may be expected. Corporate citizenship and reputation Organizations are now judged on their sustainability behavior. This includes organizations making purchasing decisions based on environmental awareness as well as cultural changes within the organization to satisfy employee’s demands for more sustainable activity. Organizations are becoming more conscious of the perception of their behavior by internal and external stakeholders. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss7 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  9. 9. Power from the gridAn important factor to consider is power provision from the grid. In the UK andSouth Africa, there are real concerns over the availability of power for currentand future data center requirements. There have been some press reports thatthe main utility provider in London is turning down, or postponing requests forincreased capacity from data centers as it plans to meet the requirements ofthe 2012 Olympics. More so than ever before, it is critical to the sustainability ofa business’ IT environment that the supply chain is considered, consulted andcommunicated with during the planning and implementation of strategy. ITmanagers need to closely align demand management practices with those ofthe data center facility management team, and accordingly, its supply chain,including power provision. It is clear that the provision of some of theseservices requires planning, consultation and consent, several years in advanceof implementation and this process does not seem to be running smoothlyamong all stakeholders. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 8 firms are affiliated with KPMG International.
  10. 10. Competitive advantage Procurement and preferred suppliers With the recent focus on procurement processes, many large organizations are streamlining their supply chains by signing preferred provider contracts with a short list of vendors. In this vendor selection process, sustainability commitments are appearing on the short list of requirements, which may lead to a competitive advantage for those vendors capable of proving their sustainability commitments. Many organizations have made commitments to the market place about their sustainability practices, as such, the impact of purchasing decisions on these commitments should be considered. Clear sustainability objectives and a system by which to measure, manage and limit environmental impacts, as well as an ability to articulate these should help to distinguish an organization from its competitors. Operational cost reduction Early data centers differed greatly between each other around security, availability, capacity and redundancy, lacking the accepted standard service levels maintained today. Over the years, the services provided by data centers have been commoditized, which means there is now very little to differentiate one from another. Operational cost efficiency and resultant cost reduction are good ways for a data center to try to differentiate itself and provide itself with a competitive advantage in the market place. Lowering operational costs is a fundamental business requirement when seeking to identify competitive advantages. Many surveys have indicated that server utilization rates can be very low, as low as 10 to 15 percent in an average data center. Therefore, it is important to consider an assessment of server utilization, and plan capacity and storage utilization accordingly. It is interesting to note that many data centers operating today were designed and implemented during the “dot com” explosion, where mainstream technology drove the implementation of multiple physical server instances and the main cost drivers were around space. Over recent years, there has been as increase in awareness of the business criticality of IT systems and demands for facility resilience becoming more widespread. This had previously been the domain of the financial sector. Companies are demanding facilities that are highly available, with resilience designed into the power and cooling systems, right through to the networks and servers. This trend has been coupled with advances in technology that have enabled the introduction of blade server environments, more computing power in a smaller footprint. This move to “high density computing” requires data center facilities that can provide power and cooling capacity upwards of 10kW per rack, where the typical provision is around 3kW. (Source: Steve Salmon, KPMG in the UK) The upward trends in both resilience and power requirements from a data center facility have led to a critical shortage of suitable environments for client IT. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss9 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  11. 11. It is not simply a case of upgrading the power and cooling capacity at an existingfacility, as this will not address the resilience requirements. As a result, companies Server energyare having to compromise, while waiting for a new breed of Tier 3 and Tier 4availability data centers to come on line with high power and cooling densities requirements havedesigned in from the outset (Tiering scale provided by the Uptime Institute). doubled in the last five years and will continue toUntil recently, the IT industry has concentrated on improving processing powerand storage capacity of their products, whilst all but ignoring the power rise exponentially in theconsumption of these devices. Research has shown that up to one­third of years to come.capacity is idle, and power consumption and power leakage, alongside the cost Source: AMDof ensuring that the data center is kept cool – are all environmental impacts oftechnology.Data centers have immense power requirements in order to keep theirsystems running. On top of that, they also have to keep an equivalent numberof environmental systems running to keep the data center operationally viable.On top of these power requirements, there are redundancy requirements inthe form of back up systems and back up uninterruptible power supply (UPS) Data centers consumedunits, in case the primary ones fail. 0.6 percent of the world’sA new or retrofitted data center may incorporate one or more of the following electricity in 2000, andelements: 1 percent in 2005. Source: McKinsey and Uptime Institute• Energy efficient hardware with greater processing power• Intelligent load sharing servers, or blade server technology to allow for growth• Redesign of hot/cold aisle air flow• Implementation of focused and better utilized environmental control systems• Consolidation and virtualization• Considered requirements around processing power, storage space and the type of storage device. A modern data center isMore efficient hardware with greater processing power may yield some of thefollowing benefits, when requirements for storage and processing are held basically the same as aconstant. By applying the multiplier effect over time, there may be significant huge refrigerator full ofoperational cost savings from: ovens running at full blast with their doors open.• Reduced environmental control hardware and power requirements Source: Bob Hayward, KPMG in Australia.• Reduced power consumption and energy savings from computer hardware• More efficient hardware may have a longer operating life, reducing the need to replace hardware as often• Less heat generated, resulting in reduced cooling requirements• Less storage servers required, back up equipment required, cabling and support infrastructure• Faster server response time, resulting in greater productivity from employees• Fewer full time employees required to operate, monitor and maintain servers• Decreased space consumption. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 10 firms are affiliated with KPMG International.
  12. 12. Sustainable IT approach Environmental impact by industry The illustration below demonstrates the proportion of environmental impact contributed by the information technology part of the business, the operational part of the business and the end product, per industry. This illustration should be used as an indicative guide to help focus your sustainable IT strategy. As the illustration shows, the IT department is not always the greatest contributor of carbon emissions within the organization. Service organizations have the most significant environmental IT impacts relative to their total environmental footprint. Energy industry organizations may find that it may be beneficial to focus their sustainable IT efforts around helping to decrease the environmental impacts resulting from their business operations. Similarly, the manufacturing industry may find it more beneficial to use technology to help them decrease the environmental impacts resulting from the use of their final product/service. Source: Gartner, Inc., Defining the Environmental Value of IT, Simon Mingay and Andrea Di Maio, 15 September 2007; Figure 1.Three Degrees of IT’s Environmental Impact by Industry Sector There is a wider perspective on sustainable IT which goes beyond data centers and end user computing, this is to consider the whole end­to­end lifecycle of IT equipment from manufacture, transport, use, power requirements as well as end­of­life disposal. An aspect of sustainable IT not addressed by this paper is around the use of technology to affect the sustainability of an organization’s operational processes and its final product. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss11 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  13. 13. Short, medium and long term fixesIn order to determine an organization’s sustainable IT strategy, the overallbusiness strategy should be consulted and the organization’s approach tosustainability should be considered. Environmental reporting commitmentsaround measurement, scorecards, dash boards, key performance indicators,trading systems and commitments to Carbon Accounting should also beconsidered. Source: KPMG International, 2008 Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 12 firms are affiliated with KPMG International.
  14. 14. There are many things that may be done, quickly and easily, without significant infrastructure changes to move your organization towards sustainable IT. However, if significant hardware investments are being considered, hardware replacement lifecycle end dates coming due, or significant organizational changes are being considered – it may be worth considering some more strategic sustainable IT changes. Market place Identifying and implementing technology solutions to re Enterprise business processe Suppliers Partners C Organization Identifying and implementing technology solutions to reduce environm Enterprise business processes IT department Strategy Governance & Organization Risk Ma Vision, Targets, Desired Outcomes, Accountabilities, Decision Rights, Enviro Driving Forces, Motivation, Strategic Policies, Procedures, Incentives and Independ Plan, Participation in Trading Schemes, Rewards, Budget Validation Use of Renewable Energy, Offsets Identifying and Implementing Solutions to Reduce Environmental Short Term Medium Term Power management features Reconfigure data centre equipment Loca Print management Virtualization of servers D Print use policies Virtualization of storage Specificatio Disposal of consumables Thin client devices Redu Ownership of energy costs Selection of servers Softsw Employee Awareness Storage optimisation Renew Baseline measures Consolidation Ca Flex Time/Telecommute Rationalization Mu Processes and Policies Procurement Project Facilities Management Capacity Management Management Business Continuity Disposal/Waste Management Resources Printers Office Systems Data Centre Software Networks Telecommunications Source: KPMG International, 2008 Sustainable IT © 2008 KPMG International. KPMG International is a Swiss13 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  15. 15. educe environmental impact sChannel Customersmental impact Environmental reporting Environmental reporting Instrumentationanagement & Controls Measurementnmental Risk Profiling, Regulatory filingdent Assessment, Audit,n, Compliance, Quality of Scorecards Reporting Corporate Social Impact Dashboards Responsibility (CSR) Long Termation of data centre(s)Design of facilities Key Performance Indicatorson of data centre equipment Triple Bottom Line (TBL)uce layers in networkwitch and softphone (IP) wable energy sources Trading Systemsapacity­on­demandulti­core processors Economic, Social, Scenarios Governance (ESG) Human Resources Measurement and Carbon accounting Reporting Transparency ISO­14001 EMS Servers Storage Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 14 firms are affiliated with KPMG International.
  16. 16. Sustainability reporting, legislation and regulations Reporting In order to achieve sustainability objectives ­ measurements are invaluable. As the old adage goes: “If you can’t measure it, you can’t manage it” . Relevant, reliable and detailed data is essential, and IT has a role to play in facilitating this. As described in KPMG Australia’s Sustainability Report (2008), internal management reporting creates focus and direction to guide an organization’s approach to sustainability. External reporting sharpens the focus on performance and helps companies appreciate how sustainability initiatives can create value and enhance their investment credibility. Reporting that is validated by independent assurance reinforces this process. Stakeholders are increasingly interested in understanding the approach and performance of companies in managing sustainability aspects of their activities. At this stage, there is no single, universally accepted definition of sustainability reporting. Despite this, there is a growing need for detailed and continuous non­financial data collection – this information needs to be credible and able to stand up to intense scrutiny by customers, employees, shareholders, tax authorities, governments, and regulatory authorities Legislation and regulations Legislation mandating At present, legislation and regulations around sustainable IT largely discuss Green IT policies is the manufacture, transport and destruction of equipment and the associated hazardous materials. The next steps should be around the evolution of maturing and is adopted technology to support sustainability reporting requirements. at disparate rates across countries. The current trend is self­reporting, until regulators implement reporting standards and requirements. Industry bodies and organizations will gather Source: Springboard Research to influence the metrics, reporting formats and comparisons used. There are two voluntary frameworks that are widely referred to in sustainability reporting, the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP). At the innovation stage, there may be the ability to influence and direct policy and regulation. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss15 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  17. 17. Big business in sustainabilityThere is a business imperative behind sustainable IT, money to be saved andmoney to be made.Some of the main categories of revenue potential around sustainable IT include:• Innovation and design• The measurement and reporting, as well as third­party checking of non­ financial metrics and benchmarking• Advice on how to manage sustainability; trade Carbon Credits and solutions for Carbon Accounting. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 16 firms are affiliated with KPMG International.
  18. 18. Innovation and design Innovation and design become critical elements as organizations seek to gain a competitive advantage in the use of technology. Similar to how the innovation from copper cabling to fiber optic cabling transformed the telecommunications industry, innovation and design can transform the future of sustainable IT and industry. Innovation and design may address the following: • Innovative sustainable IT solutions • Clean fuels and alternate energy sources • eWaste management • Examining the full life­cycle of technology products and services, to decrease the environmental impact • Energy service companies (ESCO’s) are in the business of helping businesses trim their energy bills • Combined heat processing (CHP) – redirecting heat generated from data centers to heat office space, water and/or swimming pools. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss17 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  19. 19. MetricsAs organizations seek to report on their commitments, or comply with requiredreporting, they may require assistance around the metrics. Metrics mayaddress the following:• Tools and technology to help organizations track and manage the environmental impact of technology• Environmental impact assessment• Benchmarking• Certification• Analysis around power consumption and thermal footprint• Sustainability reporting.AdviceAs organizations seek to identify their appetite for sustainability, they may needassistance with strategies, implementation and advice. Advice may address thefollowing:• Architecture and design• Manufacturing, and materials composition• Sustainable IT strategy• Vendors and relationships• Right­sizing technology. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 18 firms are affiliated with KPMG International.
  20. 20. Concluding remarks Executives have a business imperative to consider the competitive advantage around sustainable IT. Further, it is also important to consider the regulatory future in this regard. Technology is an integral part of business. To remain competitive, businesses should consider their technology investments with a view to decreasing operating costs to enhance their competitive advantage. There is now pressure being placed on Executives to ensure their business technology is managed in an environmentally friendly manner. This responsibility extends through the whole ICT lifecycle to include manufacture, transport, use and disposal. The cost of running an IT department may also be influenced greatly by the continued rise in energy costs and, in many locations, the lack of supply of energy to service technology requirements. IT may often be the heaviest consumer of energy within a company, and as new technology demands higher volumes of power, IT management is having to come up with smarter, more energy efficient strategies for running IT operations. There will be long­term operational cost savings that may be realized with sustainable IT planning. Ultimately, sustainable IT is a tool by which to decrease technology related operating costs. This may become a competitive advantage, both from a financial perspective as well as a corporate responsibility/branding perspective. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss19 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  21. 21. Sustainable IT initiatives may allow an organization to be seen as a preferredsupplier, and increasingly, organizations are required to prove their sustainabilitycredentials when tendering for procurement contracts.Accounting and financial reporting has taken hundreds of years to evolve. KPMGpredicts that within five years, technologists will be asked to supportcomprehensive sustainability, environmental, emissions and carbon­usereporting covering the organization and its value chain.Regulation and legislation are in formative stages, forward thinkingorganizations may contribute to shaping and influencing the rules andregulations.The main motivation for sustainable IT should be around economics andgovernance. This involves the alignment with, and capitalizing on, stakeholdervalues. It is also important to try to pre­empt stakeholder action, to sustain thevalue chain and capture operational efficiencies. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 20 firms are affiliated with KPMG International.
  22. 22. Top Five Recommendations to jump­start Sustainable IT 1.Initiate discussions between IT and building / facilities management – to discuss and understand technology and energy use. 2.Implement power management features (turning equipment off when not in use, auto power down). Sustainable IT © 2008 KPMG International. KPMG International is a Swiss21 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  23. 23. 3.Implement consideredof printers and set to (consolidate locations print management double side, black and white).4.Implement considered safe disposal, donation, consumables (recycle, disposal of corporate take back programs, landfill, cluster servers, refurbishment – consider waste generated from supply chain manufacturing of component and/or final product).5. Implement the use of video/audio conferencing. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 22 firms are affiliated with KPMG International.
  24. 24. KPMG’s Global Green Initiative We are committed to reducing our member firms’ combined carbon footprint by 25 percent by the year 2010 from a 2007 baseline, through emission reduction schemes and the use of renewable energy in our member firms. Our three commitments: • Measuring, reducing and reporting KPMG’s carbon footprint. • Supporting environmental projects to help address the challenges of climate change within our wider commitment to our communities. • Working with our employees, suppliers and clients to help them improve their climate change impacts. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss23 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  25. 25. N e u t r a l C a r b o n Corporate social responsibility (CSR)/Corporate citizenship r e fe r s t o n e u t r a l ( ze r o ) t o t a l c a r b o n release, brought a b o u t by b a l a n c i n g the amount of carbon released with the amount or concept where organizations consider the sequestered interests of society by taking responsibility for the impact of their activities on customers, suppliers,Glossary (glôsə-rē, glŏsə-) employees, shareholders, communities and other offset stakeholders as well as the environment electronic device u nwa n t e d e l e c t r i c a l o r o f a ny b r o ke n o r wa s t e t y p e c o n s i s t in g eWaste N e g a ­ w a t t sV i r t u a l i z a t i o n making a single physical f u n c t i o n a s m u l t i p l e v i rt u a l computing resource, appear to t he co ncept of r emov ing the ne ed t o co nsu me electricity rather than making the energy consumption more efficient. It is cheaper to not consume in the first place to ensure that they have not been over processing Rightsizing provisions revisiting provided capacity power IT and for resources Extended Producer Responsibility is a strategy designed to promote the integration of environmental costs associated with products throughout their life cycles into the market price of the products S u s t a i n a b l e I T Renewable energy credits tradable environmental commodities, proof that 1 economically, environmentally and megawatt ­hour of electricity was generated from an eligible renewable energy resource socially responsible information technology misleading i n fo r m a t i o n by a n to conceal its abuse the in the dissemination order to present a public Greenwash ( d i c t i o n a r y. c o m ) Carbon footprint environment organization positivea measure of the impact human activities have on imagethe environment in terms of the greenhouse gasesproduced, measured in units of carbon dioxide of ofF u t u r e ­ p r o o f i n g stuck with an unsaleable product to ensure the organization is not Carbon offset Kyoto protocol or require an early retrofit financial instrument representing a reduction in greenhouse gas a protocol to the international Framework Convention emissions on Climate Change with the objective of reducing greenhouse gases that cause climate change Girrnmetny I T f r i e n d l y i n fo r m a t i o n Emissions trading Downcycling an administrative approach used to control pollution by is the recycling e en all providing economic of material into technology incentives for achieving a material of reductions in the emission of lesser quality env o pollutants, sometimes called cap and trade © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  26. 26. ContactsEgidio Zarrella Kumar Parakala Brad FisherGlobal Partner in Charge, IT Advisory Global COO, IT Advisory, Americas region – Sustainable IT Asia Pacific region – Sustainable ITKPMG in Australia KPMG in Australia KPMG in the US+61 2 9335 7590 +61 2 9335 7820 +1 212 909 5498ezarrella@kpmg.com.au kparakala@kpmg.com.au bfisher@kpmg.com Sustainable IT © 2008 KPMG International. KPMG International is a Swiss25 cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
  27. 27. Keith Bannister Bob Hayward Frank RizzoEurope region – Sustainable IT Australia region – Sustainable IT Africa region – Sustainable ITKPMG in the UK KPMG in Australia KPMG in South Africa+44 20 7311 6558 +61 7 3225 6853 +27 11 647 7388keith.bannister@kpmg.co.uk bhayward@kpmg.com.au frank.rizzo@kpmg.co.za This paper could not have been written without the valuable contributions of: Edge Zarrella, Kumar Parakala, Andrea Wang, Bob Hayward, Ebrahim Khan, Gabriel D’Eustachio, Brad Fisher, Frank Rizzo, Keith Bannister, Greg Corlis, Lance Morton, Matt Bishop, Steve Chase, Steve Salmon, Nasreen Patel, Michelle Hernandez, Jai Govind, Hanife Ymer, Nick Benson, David Ryan, Michael Mattern, Margaret Smylie, Shaun Hodierne, Bill Downing, Fiona Rossi­Mel, Claire Needham, Gene Ozgar, Dominique Brack and Philip Sallick. Sustainable IT © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent 26 firms are affiliated with KPMG International.
  28. 28. kpmg.comThe information contained herein is of a general nature and is not intended to address © 2008 KPMG International. KPMG International is a Swiss cooperative. Memberthe circumstances of any particular individual or entity. Although we endeavour to firms of the KPMG network of independent firms are affiliated with KPMGprovide accurate and timely information, there can be no guarantee that such International. KPMG International provides no client services. No member firms hasinformation is accurate as of the date it is received or that it will continue to be any authority to obligate or bind KPMG International or any other member firm vis­à­accurate in the future. No one should act on such information without appropriate vis third parties, nor does KPMG International have any such authority to obligate orprofessional advice after a thorough examination of the particular situation. bind any member firm. All rights reserved.The views and opinions expressed herein are those of the authors and interviewees KPMG and the KPMG logo are registered trademarks of KPMG International.and do not necessarily represent the views and opinions of KPMG International orKPMG member firms. August 2008

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