.png)
Being Sustainable Does Pay
9 September 2009:
A recent report by carbon market analyst New Energy Finance (NEF), suggests so. It highlighted that although reduced economic activity due to the financial crisis will decrease levels of CO2, in the long term a lack of funding for carbon-reduction initiatives is likely to have an adverse effect on emission levels. Nevertheless, the importance of reducing carbon emissions is an issue that will not go away, regardless of how the economy stands.
As we’re frequently reminded, we need to act now. Worryingly, at the March 2009 Climate Change Summit in Copenhagen, scientists predicted that sea levels could rise by a metre by the end of the century—endangering 10% of the world’s population. This new estimate illustrates the crucial need for organisations to take accountability for the environmental impact of their operations.
Businesses are already facing an urgent requirement to comply with upcoming environmental legislation as governments across the world look to reduce humanity’s impact. To help them, governments will provide much needed support for sustainable business practices through tax-breaks and incentives.
For example, in the United States the green stimulus package recently signed by President Obama, includes $71 billion allocated towards energy and environmental initiatives and another $20 billion for green tax incentives. The aim is to stimulate economic demand and at the same time make it greener, cleaner and more sustainable. Britain, Germany and China are all using stimulus bills to make huge new investments in clean power and drive growth in smarter, more efficient and more responsible ways.
As a knowledge-based industry, IT outsourcing is not considered a major contributor to greenhouse gases compared with greenhouse gas intensive industries. However, the industry’s major players often have huge numbers of employees (over 63,000 in our case) who are distributed throughout the world, so there are opportunities to generate significant internal carbon reductions.
At Cognizant, our aim is to reduce waste and improve natural resource productivity to reduce operating costs and green house gas emissions. These savings that can be passed onto customers, and lay a foundation of return-on-green-investment to prepare companies for upcoming regulation.
Adding sustainability into outsourcing contracts
In addition to being green themselves, IT service providers now have to be prepared for environmental measures to be included in contract negotiations. Providers and their customers?the end-users?need to be clear on exactly what they want to achieve. Consider the following example; a company is trying to run its business as sustainably as possible. It decides to outsource a portion of its IT function, which currently contributes 100,000 tons of green house gases (GHG) per year.
When it moves the work to the outsourcer, ideally they should meet the company’s business’s Service Level Agreements (SLAs), and should also be able to perform the work at a reduced level of GHG emissions, say 80,000 tons. If the outsourcer is less efficient and does the work at 110,000 tons, then the decision to outsource has actually increased the overall GHG emissions and is contradictory to their sustainability goals.
By collaborating to formalise targets at the planning stage, all parties can make sure that any goals set out in the SLA are tangible and realistic. This means that progress can be easily measured, reviewed and redefined as required.
In the public sector this has been formalised, with the UK government announcing last year that sustainability would be a factor in all procurement decisions. However, it remains an important issue in the private sector too. Government regulation and concerns about corporate accountability mean companies need to pay attention to sustainability, even if the recession has pushed it down the agenda.
A survey conducted as part of The Brown-Wilson Group’s Black Book of Outsourcing revealed that 21% of European and American companies that outsource have already added green elements to their contracts, with a further 36% wanting to switch to a greener IT partner over the following 12 months. With this in mind, outsourcing providers who ignore the environment do so at their peril.
Read more...
Source: Business Computing World
