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Slashing costs and carbon with smart technology

Slashing costs and carbon with smart technology
June 25, 2014in Solutions2014-06-252014-08-12solutionsen
Environmental initiatives don’t have to cost the earth. With the help of a smart CIO, companies can slash carbon emissions and operational expenses at the same time.

Environmental initiatives don’t have to cost the earth. With the help of a smart CIO, companies can slash carbon emissions and operational expenses at the same time.

Any CEO will always be looking for ways to cut bottom-line costs. If they are socially-minded (or legally mandated), they will also be trying to reduce their company’s environmental impact. These two goals are complex, but not mutually exclusive – and the CIO plays a pivotal role in harmonizing them.

Many discussions around green IT focus on how we can reduce data center power consumption. Fewer of them explore how we can use IT to make other parts of the organization greener. And yet IT can help us to understand what our most carbon and energy-intensive activities are - and help mitigate them.

One of the biggest mistakes that any company can make is to take a token approach to sustainability, says Andreas Birnik, founder of Carbon Story, a crowdfunding site for climate change mitigation projects.

Getting employees to plant trees and engaging in other high-visibility efforts isn’t tackling the real problem, says Birnik, who has conducted carbon monitoring projects for large companies and served as an advisor to telecoms operators, private equity investors and start-up technology firms.

the importance of measurement

“You need to use IT in a clever way to measure your carbon footprint across your supply chain. Then having measured it, you need to benchmark it per dollar of revenue,” explains Birnik. “Very few companies do this well.”

IT can be instrumental in these measurements, thanks to product lifecycle analysis software, which helps organizations track the carbon output of their supply chains.

Once IT has helped you understand where your largest carbon emissions lie, it can be used to unlock environmental opportunities within your organization. An Accenture report, Carbon Connections, identified dematerialization as a key opportunity. Virtual offices and mobile telepresence were key here, as were mobile delivery notifications for ecommerce.

digitalization key enabler

Han Van Der Zee, a visiting professor at Nyenrode Business Universiteit, argues that digitization in general is key to stripping out emissions from business processes.

“We must ask what the product is, what is necessary to produce the product, and can the product be as simple as possible in terms of material usage,” he asks. “We’re trying to make the product as digital as possible.”

One of the fortunate things about green initiatives is that they’re generally based around more efficiency, meaning that reductions in carbon emissions generally mean reductions in costs. The Accenture report suggested a potential for 22.1megatons (Mt) savings of CO2e across the EU-25 by 2020, representing €14.1 billion in reduced energy costs.

increase collaboration, reduce travel

For example, SBM Offshore saw significant savings in both cost and carbon from its installation of telepresence equipment. The company, which specializes in engineering and installing offshore oil and gas terminals, used Cisco’s Telepresence systems in conjunction with Orange Telepresence Connect to increase collaboration among its R&D teams while reducing its environmental impact.

The company saved over $1.1 million in travel costs in the first six months of use, while also reducing its carbon footprint by 400 tons of CO2 in the first year.

smart logistics

IT’s environmental role can go beyond reducing the transportation costs of people; it can make the moving of products more efficient, too. World leaders such as UPS have proven that smart logistics can bring both financial and environmental benefits.

“Smart logistics may include better routing of vehicles,” explains Andie Stephens, a senior consultant at the Carbon Trust.

UPS developed a fleet management system called the Non-Road Integrated Optimization and Navigation system (ORION), which uses routing technology to optimize driver delivery paths throughout the organization.

UPS is still rolling out the technology, and doesn’t expect it to cover all of the 55,000 routes in the North American market until 2017. Nevertheless, its deployment to 10,000 UPS routes in 2013 saved it more than 1.5 million gallons of fuel and 14,000 metric tons of CO2 emissions.

Stephens also explains that it can also include modifying driver behavior. “You can monitor what’s happening in the vehicle, and feedback through training programs how to drive better. That can generally reduce fuel consumption by 5-15%, feeding directly into carbon savings,” he adds.

technology components

There are several base technology layers underpinning developments such as these. Mobile computing is a clear foundation for specific applications such as fleet management, which require GPS, two-way communications, and in many cases, in-vehicle sensors, along with mobile devices for field engineers.

In videoconferencing and telecommuting, networks and mobile are enablings platform for workers demanding flexibility to save carbon emissions from travel.

Other cost savings are to be found in areas such as smart metering and building management, which are other initiatives impossible without the advanced networking and sensor capabilities inherent in IT.

“In commercial buildings, typically offices, building management systems can reduce energy through improved control, switching off lights, and monitoring the heating within buildings,” says Stephens.

Ideally, enterprises will take a holistic view of sustainability initiatives, and spread IT through all of them as an enabling force. Sustainability isn’t about single, isolated efforts, explains Han Van Der Zee. “It’s an ecosystem where all kinds of systems are related to each other, influence each other and enforce each other.”

Interested in green IT technologies? Find out how China is building a smart grid for sustainable power.

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