MT Expert - IT: Count pennies, not carbon

Businesses of all sizes need to start thinking about using technology to cut their carbon emissions.

Last Updated: 31 Aug 2010

The environmentally conscious among us will have been heartened lately by signs that British business is beginning to care about its carbon presence.  Supermarkets are incentivising their customers to reuse carrier bags, airlines are offering passengers the opportunity to offset flights – last week a clothing company even launched a new initiative to recycle broken coat hangers. But what is the real motivation for all these environmental efforts, and what will it take to drive these measures towards the UK’s necessary carbon reduction targets?  

Last week we released the Smart Carbon Report in association with Greenbang) - a study of 250 British business people, investigating their attitudes to impending environmental challenges.  

While 96% of people surveyed believe that technology can help the UK meet its carbon reduction targets – and 67% regarded its potential impact as significant, only a third (36 percent) thought that their organisation would invest some of its technology budget in innovative carbon-reducing technologies.  Crunch those numbers another way, and you see that a third of all respondents had a sure-fire way to reduce environmental impact, but didn’t consider it a priority spend.

Are businesses talking the talk, but unwilling to walk the walk?  They certainly seem to be neglecting to put their money where their mouth is at the moment on carbon reduction.  

When we asked about the key motivators for UK companies to improve energy monitoring, the answer was clear: 47% said ‘cost savings’. This was also the primary motivation for improving energy management (cited by 60%).

But are businesses wrong to be so fiscally minded - to be applying normal budgetary rules about returns-on-investment to such a globally important business ‘responsibility spend’?  Or do companies always need to consider the bottom line?

Government is inevitably one of the biggest influences on businesses approaching the ‘carbon conundrum’.  Current UK legislation (the Carbon Reduction Commitment Energy Efficiency Scheme) leaves small and medium businesses alone for now – focusing on the larger 23 percent of the UK’s businesses.  However, businesses of all sizes would do well to understand the scheme, as it will doubtless set the tone for any legislation targeting smaller companies in the coming years. It is a simple carrot and financial-stick approach: perform well on energy measuring and reduction and a business gets reputational/ marketing benefits, perform poorly and it gets hit with fines.  

The simplistic nature of the legislation doesn’t reward businesses for making exemplary organisational changes, such as replacing business travel with video conferencing. Business travel isn’t counted in the current scheme, and increased technology usage can actually have an impact on overall energy consumption (which is measured).  

However, while many agree that the scope of the measurement is too limited in the current legislation, there has been little criticism of the use of financial penalties. Without them, the environmental agenda would doubtless slip from the CFO’s focus, and budgets for improvements would be even less forthcoming.

While environmentalists sometimes shy away from using the economic benefits of ‘greening’ a business to promote their cause (because, they may reason, that shouldn’t be the point, and it can get dangerously close to greenwashing), our Smart Carbon Research shows that this is probably counter-productive.  

Anyone who agrees with efforts to reduce carbon and other greenhouse gas emissions will have to sell their case in the language and imperatives that businesses value. Saving energy (whether airline fuel or electricity) brings cost savings, and it seems clear that those cost savings are what will really drive action among UK plc.  

Phil Smith is CEO of Cisco UK and Ireland.

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