While the Commission chaired by former Prime Minister of France Michel Rocard advocates the need to quickly implement a carbon tax, and with current French Prime Minister François Fillon announcing (on a beach polluted by green algae) that it shall be implemented by 2010, now is a good time to ask ourselves about this measure's possible impact on the promotion of Information and Communication Technologies (ICTs) to reduce businesses' carbon footprint.
September 10, 2009 Axel Haentjens , Digital Transformation
Since the Smart 2020 report from the Climate Group published in July 2008, it has been common knowledge that ICT accounts for 2% of the world's CO2 footprint (as much as air transport), that their CO2 footprint will continue to grow between now and 2020, but that this growth will generate a five-fold CO2 drop in emissions in sectors where such ICT is put in place, i.e. transport, energy, construction and industrial processes. Nor should the positive impact of virtualisation on information systems' carbon footprint be overlooked. Despite these outstanding demonstrations, what have we seen over recent years? First, some businesses have discovered the environmental dimension to sustainable development, primarily thanks to the restrictions that European regulations - WEEEand RoHS- imposed on them to better manage end-of-life products and avoid the proliferation of hazardous substances.
Still others have seen the use of ICT as a smart way to give a green hue to a fairly grey annual report - what could be better than telepresence between Paris and Singapore, or a meter-reading system using a machine-to-machine solution, to testify to the IT department's commitment, shoulder-to-shoulder with the French President to achieve carbon footprint reduction targets? All of this is essentially qualitative in nature. Effective solutions do exist though, with generally excellent ROI - typically less than a year for a telepresence solution - and a very fine quote from a top executive on the solution's environmental benefits. And to share out criticism fairly, ICT suppliers were happy enough with their green product pitches that were as equally qualitative while highlighting more the financial benefits and staff efficiency gains generated by their solutions. In early 2008, Life Cycle Analysis (LCA) emerged.
This mechanism enables the overall carbon footprint to be measured for a given product or service, from the design phase, to manufacture (including the CO2 footprint of its components, the impact of transporting them, the manufacturing process, delivery to the customer and customer service), to the recovery and end-of-life treatment phase. This LCA therefore gives an estimate - it is not perfect, too much data has to be approximated - of the total carbon footprint of the product or service supplied to the customer. With regards to ICT, a product or service usually replaces another source of CO2 emissions, for example, in the transport sector. Videoconferencing reduces the need for long haul travel, teleworking reduces short daily trips, remote meter reading removes physical intervention, vehicle fleet management reduces the miles travelled, etc.
Yet, intelligent remote management of buildings' heating systems reduces energy use; server virtualisation reduces the number of servers needed and therefore also has a positive impact on energy consumption, etc. Therefore, once the Life Cycle Analysis for the ICT product or service has been carried out, it is useful to conduct the same analysis for the process or product it is replacing, and the results are sometimes spectacular. In the case of telepresence, the carbon footprint may be 20 times smaller than the intercontinental travel it is replacing. Optimised vehicle fleet management can reduce the quantity of fuel used annually by a transport company by 5%, and server virtualisation reduces server usage rates from 15% to 60%, meaning that three-quarters of the servers can be removed. Therefore, supplying an ICT solution to reduce a company's carbon footprint now means supplying the tool enabling the real reduction in CO2 emissions to be calculated within the customer's particular context, in order for the reduction to be included in its carbon assessment.
"Carbon assessment" is something of a dirty word. In order for the carbon tax to also apply to companies - and not only to private individuals as a bonus-penalty system - one would assume that every business has a clear idea of its carbon footprint, by division, by country, by operational unit, etc. and that each business sets a reduction target consistent with the characteristics of its sector. Setting up a carbon tax in 2010 will require Herculean efforts in setting up a genuine "carbon accounting" system that will gradually duplicate [KD4] financial accounting. When will Corporate Social Responsibility departments be seen with accountants, management controllers and auditors? Some leading-edge companies have already included a 30% bonus component that is directly linked to the reduction in their division's carbon footprint.
Of course, this burden will also apply to the suppliers of ICT solutions which, besides carbon accounting, are going to have to roll out Life Cycle Analysis across their entire portfolio in 2010 to establish the "CO2 profile" for their product or service, to enable customers to record their carbon savings resulting from purchasing and using a solution. Those suppliers who do not provide CO2 profiles for their solutions, will be at competitive disadvantage. Orange Business Services has, of course, put in place a programme to extend Life Cycle Analysis initially to all new services, then to the entire portfolio. This carbon tax is therefore excellent news for promoting the use of ICT from an environmental viewpoint.
My thanks go out to Messrs Rocard and Fillon!
Directeur des Partenariats Cloud et Services Digitaux d’Orange Business Services, ma mission est d’animer une communauté de partenaires pour développer des propositions de valeur commune à l’intention de nos grands clients français et internationaux. Entré en 1995 dans le Groupe Orange, j’ai été successivement Directeur Stratégie et Marketing de Transpac, Directeur du Marketing de Global One, Senior Vice President Strategy d’Equant, Directeur du Marketing et de la Communication Externe d’Orange Business Services, et plus récemment Directeur Marketing et International d’Orange Cloud for Business. En parallèle à mes différentes fonctions, je gère la Communication sur la Responsabilité Sociale d’Entreprise d’Orange Business Services depuis 2006.