UK: Making Your Competitors Green With Envy: Ensuring Your Sustainable ICT Strategy Delivers

Last Updated: 13 January 2010
Article by Ian Stevens and Nicola Silke

While developing a "green" information and communications technology (ICT) policy forms an important part of any sustainable ICT strategy, it is only the first step in greening the performance of your business' ICT. Successful strategies convert such policies into practical steps, actions and procurement practices, require proactive monitoring of the impact they are having and encourage and facilitate continuous improvement.

In December we reported on the Copenhagen Accord and the reasons for businesses to focus on developing a "green" ICT procurement strategy. In this article we focus on the practical steps businesses can take and contractual provisions they can utilise to get the most out of their sustainable ICT strategy and increase its chances of delivering the desired outcomes.

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How can we improve the effectiveness of our "green" procurement strategy?

Join up your procurement approach

Businesses need a joined up approach to sustainability. Facilities management, ICT and procurement teams need to review the overall effect of buying options and operational costs (including the consumption of energy) on the business as a whole. Whole life cycle costs across the business need to be reviewed. Energy, water and consumables consumption and waste savings over time should be balanced against the increased capital costs of procuring ICT equipment with reduced environment impact, or that will enable other parts of the business to reduce their environment impact and/or operating cost.

Gather information and benchmark performance

In order to assess where improvements and savings can be made a business needs to have a clear understanding of its current performance and carbon footprint, and to be able to monitor the impact of changes. To achieve this:

  • Consider introducing smart or other automatic meters to measure the consumption of energy, water and other resources and consumables by your ICT systems. Determine the overall rate of consumption of your existing ICT systems and how much it is costing. Where possible, assess the financial and environment cost of each ICT service that key parts of your ICT infrastructure (such as your data centre) deliver to support a business process. Use metrics such as the Green Grid's power usage effectiveness and data centre infrastructure to review the performance of your ICT systems.
  • Undertake business/cost analysis to form a view on what the likely cost of that energy, water and other consumables will be over the coming years. Having regard to predicted future prices, balance the increased cost of procuring more efficient ICT systems against the future savings potentially achievable using more efficient ICT systems.
  • Review the business purpose and usage of the ICT equipment used in your business, including in your data centres, and its consumption of energy and consumables. Where possible, compare it to industry best practice. Identify and assess opportunities for optimisation of and changes in working patterns and ICT usage – e.g. cooling efficiency, powering down equipment when not in use, reducing unnecessary duplication and copying, reducing travel, removing or replacing inefficient, unused or underused ICT hardware components or configuring them or your software, or introducing new software, to improve performance/reduce energy consumption. There are a number of specialist consultants and energy management companies who can assist with this.
  • As part of the tender process, ask potential suppliers to demonstrate their track record of providing energy efficient and environmentally sound solutions, delivering innovative solutions and making the best use of new and emerging technologies and practices at the selection stage. Building environmental considerations into the supplier-selection stage better ensures achievement of "green" procurement aims once the contract is operational.

Promote behavioural change, innovation and continuous improvement

Having identified opportunities for improvement in and optimisation of working practices and ICT usage, determine the best way to adapt or improve them. In many cases some of the most significant performance changes can be achieved simply by influencing employee and service provider behavioural patterns. In other cases the use of new and emerging technologies can dramatically improve productivity and reduce overheads.

  • Include contractual provisions in your outsourcing agreements requiring service providers to regularly review the ICT systems they manage, provide and/or use and their processes and procedures against best and emerging practices and to identify where new technologies can be introduced to optimise them, to reduce travel, energy and consumables consumption and the overall environment impact of their services.
  • Optimise the timing and extent of equipment refreshes.
  • Train staff, and require your service providers to train their staff, to adopt more environmentally-aware working practices. In the future, where business revenues have dependence on environment-friendly performance, contractual requirements on service providers to ensure their staff have undertaken environment-impact and awareness training and are appropriately skilled and experienced in sustainable working practices are likely to become more common. As a result, assessments of candidates' technical and academic skills, experience and training in these areas may well become increasingly important factors in recruitment.

Include contractual obligations to implement, maintain and report against an appropriate environmental management system and/or be accredited to specific environmental management standards

Contractual requirements to meet aspects of the BS ISO 14000 series of environmental management standards, membership of IT industry environment bodies, becoming signatory to voluntary agreements and certification in accordance with the Carbon Trust Standard are all becoming more common. BSI, the Carbon Trust and industry and standards bodies are also developing tools such as PAS 2050 to assist businesses to assess the life cycle greenhouse gas emissions of goods and services.

Specify energy efficient and/or environmentally friendly goods and services in your contracts

Specify relevant eco-labels led equipment, technical standards, performance standards and/or requirements; ensure service descriptions specify processes designed to minimise their environment impact. For example:

  • Require Energy Star qualification in relation to power supply efficiency and power consumption; require use of recyclable materials and a high Electronic Product Environmental Assessment Tool rating (EPEAT evaluates how much energy it uses and how its designed and manufactured – see www.epeat.net (www.epeat.net) );
  • Require material-efficient packaging designed with re-usability, recyclability or recovery in mind, thereby reducing the material cost and environment impact of the packaging and allowing more units to ship per pallet – reducing the cost to you in the long term; and
  • Specify relevant criteria from Defra's 'Buy Sustainable – Quick Wins' list of minimum environmental standards (see: http%3a%2f%2fwww.sustainable-development.gov.uk%2fwhat%2fpriority%2fconsumption-production%2fquickWins%2findex.htm (www.sustainable-development.gov.uk/what/priority/consumption-production/quickWins/index.htm)), or other appropriate sustainability criteria.
  • Frame services, training and service levels to incentivise environmentally-friendly behaviour, carbon reductions and energy efficiency. Performance against environment requirements can be incorporated into key performance indicators. Measurable targets will better ensure the service provider takes action to meet environment-related objectives.
  • Require suppliers and service providers to initiate energy awareness campaigns and training for their and your personnel.

Structure charges and payment mechanisms to incentivise "green" performance and require that key "green" obligations be flowed down to subcontractors

Ensure liquidated damages payments are triggered under your agreements where energy saving, carbon reduction or other sustainability/environment performance targets are not met, or that incentive payments are triggered where environment-friendly performance improvement targets are achieved. Requiring the flow down of appropriate sustainability requirements in the prime contract into key subcontracts will help encourage the selection by your service provider of third parties who will best assist in meeting its environment-related obligations.

Monitor and review performance

Include contractual provisions in your agreements requiring suppliers to regularly report on the environment impact of their manufacturing, packaging, storage and transport processes and service delivery in accordance with the Global Reporting Initiative's sustainability reporting guidelines, or against another agreed set of performance criteria. Such reporting requirements facilitate transparency and accountability regarding environment performance and allow comparisons against other organisations.

Require your suppliers and service providers to report on their performance in key areas:

  • Regulatory requirements such as the Eco-Design Regulation, the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive and the Waste Electrical and Electronic Equipment Directive;
  • Codes of conduct such as the European Code of Conduct on Data Centres Energy Efficiency;
  • Specific contract targets such as packaging and transport efficiency, energy and water consumption and waste reduction and disposal; and
  • Innovation and implementation of beneficial new and emerging technologies and practices.

Where targets are missed, require a remedial plan to be put in place. Ensure key performance requirements are auditable and, preferably, suitable for benchmarking. Use the governance process and meetings as a forum to regularly review your service provider's performance against the sustainability and innovation requirements of the contract. Identify what is and what is not working. Check that innovative and new technologies are being used to the best advantage. Use the change control procedure to fine tune your requirements and the business processes and procedures used in the delivery of the service.

The sooner businesses give serious consideration to implementing effective strategies for "green" procurement and management of ICT, the sooner they can enjoy a range of benefits and prepare themselves for a future where to be "clean" and "green" is an imperative for, rather than an optional aspect of, doing business.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 12/01/2010.

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