IT and the environment A new item on the CIO’s agenda? potx

IT and the environment
A new item on the CIO’s agenda?
A report from the Economist Intelligence Unit
Sponsored by IBM
© The Economist Intelligence Unit 2007 1
IT and the environment
A new item on the CIO’s agenda?
IT and the environment: a new item on the CIO’s
agenda? investigates the efforts being made
by organisations to measure and reduce the
environmental impact of the IT function. The report
assesses how these changes are affecting the
purchasing, operation and disposal of technology
assets within businesses today. The report was
commissioned by IBM.
The Economist Intelligence Unit bears sole
responsibility for the content of this report. The
Economist Intelligence Unit’s editorial team executed
the online survey, conducted the interviews and
wrote the report. The findings and views expressed in
this report do not necessarily reflect the views of the
sponsor.
The research drew on two main initiatives:
● The Economist Intelligence Unit conducted a major
online survey of chief information officers and
other senior IT executives from around the world
during June and July 2007. In total, 213 executives
took part in the survey.
● To supplement the survey results, the Economist
Intelligence Unit also conducted in-depth
interviews with ten senior IT executives and other

experts from a range of industries and regions.
Clint Witchalls was the author of the report and James
Watson was the editor. Mark Samuels, Dan Ilett,
Richard Handford and Phil Davis also contributed to
the research. We would like to thank all the executives
who participated in the survey and interviews for their
time and insights.
August 2007
Preface
2 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
A green agenda has never been more important
for organisations, yet it would appear that there is
much more talk than action. A recent study by the
US Environmental Protection Agency (EPA)
1
found
that US servers and data centres alone accounted for
1.5% of the country’s total electricity consumption
in 2006—more than double what was consumed in
2000. This is similar to the energy consumed by about
5.8m average US households, and accounted for
some US$4.5bn worth of electricity. Under current
efficiency trends, consumption could nearly double
again by 2011—delivering a $7.4bn energy bill to
firms and potentially accounting for some 2.5% of
total energy consumption.
All this has a great environmental impact. In 2005,
the total power demand by servers and data centres

was equivalent to fourteen 1000MW power plants
2
—
and these figures exclude PCs, laptops and other IT
infrastructure. As concerns over climate change grow,
this rising energy usage will come under greater
scrutiny, putting organisations under increasing
pressure to account for their IT policies and practices.

The key findings of this study are highlighted below.
● Relatively few organisations have any plans in
place to reduce their carbon footprint. Although
two-thirds of executives polled say that their
organisation has a board-level executive responsible
for energy and the environment, less than half (45%)
of firms have a programme in place to reduce their
carbon footprint. And those that do have a carbon
reduction strategy, the majority (52%) have no
specific targets for it, although a small hard core (9%)
aim to be carbon neutral by 2012.
● Many people are aware of the impact of IT on
the environment, yet few firms are doing anything
about it. The majority of respondents (59%) polled
for this report believe that IT has either a significant
or moderate environmental impact. Just 15% think it
has no impact. But in spite of this, more than one-half
of respondents (54%) strongly agree or somewhat
agree that their organisation does not measure
the impact of their IT systems and policies on the
environment—compared with 32% who believe that

their organisation does.
Who took the survey?
A total of 213 executives took part in this survey. All
respondents occupied senior management positions: of
these, 47% were CIOs or CTOs, and 44% were SVPs/VPs of
IT and heads of IT.
Executives were only accepted from organisations with
at least 1,000 employees, to ensure that the businesses
being polled had significant IT assets. The majority (58%)
hailed from firms with at least 5,000 people. The survey
focused on Western Europe (59%), but included Asia-
Pacific (19%) and North America (19%).
By sector, the largest number of respondents came
from manufacturing (17%), followed by financial
services (14%) and healthcare, pharmaceuticals and
biotechnology (11%). A full breakdown of all respondent
demographics is given in the appendix.
Executive summary
1. US Environmental
Protection Agency, Report
to Congress on Server
and Data Center Energy
Efficiency, August 2007.
2. Jonathan G. Koomey,
Estimating total power
consumption by servers
in the US and the world,
February 2007.
© The Economist Intelligence Unit 2007 3
IT and the environment

A new item on the CIO’s agenda?
● Although IT consumes an enormous amount of
power, few IT bosses measure their department’s
contribution to the energy bill. Most IT executives
say that their firm does not monitor its IT-related
energy spending (and a further 9% don’t know).
Of those that do monitor their IT-related energy
consumption, about one in four (24%) have seen their
energy consumption increase over the past two years.
However, measuring the cost clearly provides an
incentive to change: 15% of respondents noted that
their energy use had actually declined.
● When it comes to IT procurement, power
consumption is not a significant criterion
right now. Reliability is the main deciding factor
when buying IT equipment, according to 63% of
respondents. This is followed by price (32%) and
then after-sales support (30%). Despite rising energy
costs, dwindling reserves and ongoing geopolitical
tensions in areas of oil and gas supply, only 12% of
respondents believe that the energy efficiency of
IT equipment is a critical purchasing criterion. In
comparison, 13% of executives rate delivery times as
being a critical factor.
● Promisingly, IT holds much scope for
improvement. Despite the current sense of little
progress being made, the IT function is well placed
when it comes to reducing its environmental impact.
By adopting existing energy efficiency methodologies
and technologies—a “best practice” scenario, as

defined by the EPA
3
—corporate servers and data
centres could cut power use from current efficiency
trends by 56% by 2011. For the US alone, this would
reduce projected cumulative (2007-11) electricity
costs from some US$31bn to US$17bn, providing an
obvious cost saving incentive—and also delivering
a huge reduction in future CO
2
emissions. Beyond
the data centre, simple initiatives, such as switching
off PCs when not in use and minimising unnecessary
printing, can improve an organisation’s green
credentials and save money at the same time.
One encouraging sign from this survey is that the
green campaigns of yesteryear—reminding people
to recycle their paper and toner cartridges, or print
more sparingly—are now widely in use. This suggests
that current initiatives, largely focused on promoting
better energy usage, will become more commonplace
over time. Rising energy costs, increased legislation
and greater public awareness will all help to drive
these initiatives.
3. US Environmental
Protection Agency, Report
to Congress on Server
and Data Center Energy
Efficiency, August 2007.
4 © The Economist Intelligence Unit 2007

IT and the environment
A new item on the CIO’s agenda?
Barely a day goes by without a headline about the
impact of greenhouse gases on the environment:
melting glaciers, vanishing coral reefs, floods and
freak weather. The Intergovernmental Panel on
Climate Change—a network of 2,000 scientists—has
warned
4
that if the world continues with business-as-
usual, the global average temperature could rise by up
to 6.4ºC by the end of this century.
Climate change science was initially met with
scepticism in some quarters, but few today would deny
that it is a man-made phenomenon. The debate is now
centred on what to do about it, rather than whether it
is really happening.
As the world moved from disbelief to acceptance,
fingers began to be pointed at the industries assumed
to be most guilty of despoiling the environment. The
oil and automotive industries came under attack, as
did the airline industry. But less attention has been
paid to the millions of servers humming, unseen,
in data centres around the globe. “The carbon
impact of the IT sector seems to have sneaked in
under the radar,” says Trewin Restorick, director of
environmental charity at UK-based Global Action Plan.
However, it is becoming clearer that this impact is
significant. A study
5

by the EPA estimates that carbon
dioxide emissions in 2007 from servers and data
centres in the US alone would be some 42.8 million
metric tons. On current efficiency trends, this figure
would rise to 67.9 million metric tons by 2011. And
these figures exclude the impact of the distributed IT
infrastructure beyond the data centre, including the
millions of PCs, laptops, networking equipment and
so on.
So what are chief information officers (CIOs) and
other IT leaders doing about it? Not a whole lot,
according to the results of this survey.
Who’s leading the way?
At first glance, the situation appears to be quite good.
Nearly two-thirds of the organisations polled for this
report have someone at board level with responsibility
for energy and environmental issues. At a regional level
Western Europe fares better, with 70% of organisations
having someone at board level with this responsibility,
compared with 65% in the US and 56% in Asia-Pacific.
Lloyds of London, a global insurance provider, is
one example where the issue is being monitored at
the highest levels. “We’ve actually set up a working
committee that now sits regularly and reports at board
level,” confirms Peter Hambling, the firm’s CIO. “We’re
monitoring and reporting on all of our [environmental]
initiatives, not just the ones in this office.”
For one in ten organisations globally, the CIO
assumes this role. And in Western Europe, this rises to
one in five.

These figures may sound impressive but, on closer
inspection, only one-half (49%) of the firms surveyed
Introduction
No
Yes, we have a director
with a role specifically
focused on energy
and/or environmental
issues
Yes, this role is handled
by our CIO / IT director
Yes, this role is handled
by another director
No, but we plan to
appoint someone within
three years
Don’t know
34
17
10
29
6
5
Does your company have someone at the board level responsible
for energy and environmental issues?
(% respondents)
Source: Economist Intelligence Unit survey, July 2007.
4. Intergovernmental
Panel on Climate Change,
Climate Change 2007,

Fourth Assessment Report,
Paris, 2007.
5. US Environmental
Protection Agency, Report
to Congress on Server
and Data Center Energy
Efficiency, August 2007.
© The Economist Intelligence Unit 2007 5
IT and the environment
A new item on the CIO’s agenda?
have a carbon reduction programme in place. Overall,
however, large organisations with more than 10,000
staff are more likely to have a carbon reduction
programme in place (55%) than smaller ones (46%).
In fact, IT and telecommunications companies
perform worse than average in this category. Just one
in three of these firms say they have a programme in
place to reduce their carbon footprint.
Drill down further, and of those organisations that
do have a carbon reduction programme in place, more
than one-half (52%) have set no specific targets for
it. Over the next five years, 15% of businesses aim to
reduce their carbon emissions by up to 10%. Just 12%
of firms aim to reduce their carbon footprint by more
than 40%, including a small hard core of 9% that aim
to be carbon neutral.
For the majority of firms, there is little action that
appears particularly ambitious. While there is a high
level of awareness of climate change issues, when it
comes to firm commitments to reducing their carbon

impact, it would appear that businesses are in need
of a fillip. For the IT function, this could come from a
number of quarters.
We do not have precise reduction targets
Cuts of 1-10%
Cuts of 11-20%
Cuts of 21-30%
Cuts of 31-40%
Cuts of more than 40%
We plan to be entirely carbon neutral by 2012
52
15
11
10
0
3
9
If your company does have a carbon reduction programme,
what cuts does it intend to make by 2012?
(% respondents; excludes respondents selected ‘Not applicable’ and
’Don’t know’)
Source: Economist Intelligence Unit survey, July 2007.
6 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
Energy costs, changing employee and consumer
attitudes and increased regulation will all serve to
push carbon reduction issues further up the corporate
agenda.
Energy issues

One of the biggest drivers for change is the rising cost
of energy. In 2006 research by IDC, an analyst firm,
showed that 17% of IT’s total operational expenditure
can be attributed to energy. “The proportion of energy
expenditure continues to rise and is expected to
cross 20% in the short-term”, says Thomas Meyer, an
analyst at IDC, “hence, companies face significant
pressure to reduce operational expenditure to
which energy and power are major contributors
Previously, the main constraint to data centre growth
was floor space: how many servers can I physically
fit into a room. Today, the constraints are biased
towards energy cost, energy availability and energy
emissions.”
Already, the pinch on power is being felt. In late
July 2007, San Francisco suffered a huge power
outage caused by growing demands on the electricity
grid
6
. And there will be more to follow. Various
executives interviewed for this report suggested that a
number of major cities, such as London, are operating
at the upper limits of their power supply.
A recent report
7
by the US National Petroleum
Council said that the global supply of oil and natural
gas is unlikely to meet the projected 50-60% growth
in demand over the next 25 years. As supply has
become constrained in some markets, prices have

soared (see table: Soaring energy prices, 1997-2007).
A good start for CIOs is to know their portion of the
energy bill. Our survey found that, in spite of rising
energy prices, 42% of organisations polled still do not
monitor their IT-related energy spend. “I don’t have
an accurate reflection of what our actual consumption
is, but I can say that my bill is going up year on year,”
says Mr Hambling of Lloyds of London.
This is not an uncommon scenario. “Most IT
departments don’t pay—or have any ownership
of—the energy bills,” explains Mr Restorick of Global
Action Plan. “So, for an IT manager, if they’ve got a
problem their solution tends to be to buy some more
hardware.”
Derek Liggins, data centre services manager at
TNT, a logistics firm, believes that IT has to grow with
the business. “Growth is something that’s good for
Why change is on its way
6. Charles Arthur, The
problem of powering our
virtual worlds, Guardian
Unlimited, July 27th 2007.
7. National Petroleum
Council, Facing the hard
truths about energy, July
2007.
Soaring energy prices, 1997-2007
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: Economist Intelligence Unit.
Coal Oil Natural gas

Australia Dated Brent Europe
(US$/tonne) (US$/barrel) (US$/mmBtu)
0
10
20
30
40
50
60
70
80
© The Economist Intelligence Unit 2007 7
IT and the environment
A new item on the CIO’s agenda?
business, so we have to evolve our systems. Gradually,
we get rid of old equipment that uses significantly
more power.”
However, this survey found that energy efficiency
is far from being the most important factor taken
into consideration when organisations procure
new technology. Reliability is at the top of the pile,
selected by 63% of respondents. This is followed by
price (32%) and then after-sales support (30%).
In fact, just 12% of respondents selected energy
efficiency as a critical purchasing criterion—behind
even delivery times as a concern, which was selected
by 13% of executives.
“The reliability and the availability of systems is
still king,” says Bob Culver, senior vice-president
of the technology information group at Wells

Fargo, a financial services firm. “I’m going to look
at the performance of a device and the secondary
consideration will be power consumption.” However,
although it is unlikely that the power consumption
of hardware will ever be a primary consideration,
the operational costs of hardware are surely more
important than delivery times.
Part of the problem is that computer equipment
is generally compared on performance criteria:
processor speed, memory size and so on.
Environmental attributes, such as energy efficiency,
ease of recycling or the use of toxic chemicals in the
manufacturing process, are far harder to compare.
However, various initiatives are working to make
this easier. For example, the Electronic Product
Environmental Assessment Tool (EPEAT) in the
US—managed by Green Electronics Council, a non-
profit organisation—helps businesses to compare the
environmental credentials of desktops, laptops and
monitors. A global bank, HSBC, is one of a growing
number of firms using the system to help make its
purchasing decisions.
Critical factor Important factor
Reliability
Price
After-sales support
Use of toxic materials within equipment (eg, lead, PVC)
Vendor’s financial strength/ reputation
Current vendor relationship
Delivery times

Equipment’s energy efficiency
Vendor’s equipment disposal/ recycling services
Vendor’s environmental credentials
Vendor’s offsetting scheme, to account for carbon impact of IT equipment’s operational lifecycle
When tendering for new IT equipment (eg, PCs, servers), how much of a factor does each of the following factors play in your
purchasing decision?
(% of respondents, selecting ‘Critical factor’ and ‘Important factor’ only)
Source: Economist Intelligence Unit survey, July 2007.
63 29
32 57
30 51
22 24
18 49
16 56
13 36
12 34
10 24
7 25
6 13
8 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
Other schemes, such as Energy Star, allow
technology vendors to add their certification to any
equipment that falls within a certain energy efficiency
standard. As these practices become more common,
relevant comparisons between equipment will become
far easier to make. And the majority of executives
(63%) polled agree that such schemes would cause
them to change their procurement policies.

Increased regulation
Regulation and legislation will also be a strong
driver for change. The EU has already imposed
tough regulation on how firms dispose of obsolete
equipment. In February 2003, it agreed on the Waste
Electrical and Electronic Equipment Directive (WEEE),
which dictates how firms should dispose of obsolete
electronic equipment, such as computers.
After years of deliberating, the UK implemented
this directive in July 2007. And in the US, the
Environmental Protection Agency (EPA) is looking
into carbon emission legislation. “I think regulations
are going to get tighter and tighter over the next five
years,” says Mr Restorick. Mr Culver at Wells Fargo
agrees: “The Environmental Protection Agency (EPA)
has been charged, since Congress recently enacted
HR 5646, to improve energy efficiency in computing
hardware and the design and operations of data
centres. We work directly with the EPA to continually
improve, and we’re pleased that many of our practices
exceed requirements.”
Changing attitudes
But there is more than just energy prices driving the
need for change. Various stakeholders, including
employees, are demanding more from organisations.
A study by Ernst & Young, a professional services
organisation, in 2004 showed that 89% of graduates
considered high ethical standards to be “imperative”
when deciding whether to join a company. As IT’s
importance in the debate grows, expectations of the

need to change will intensify.
Shareholders are also making themselves heard,
filing record numbers of resolutions
8
on climate
change, demanding that firms disclose plans
for reducing greenhouse gas emissions. While
many of these resolutions have been defeated by
management, it speaks of a groundswell of opinion
that is likely to grow as the impact of climate change
becomes more apparent. Increasingly, stakeholders
of all stripes will be demanding more visibility and
accountability on green issues.
Finally, there is another, often overlooked reason
organisations are adopting a socially responsible
stance. “There are a number of companies for whom
this has become a strong moral issue,” says Mr
Restorick. In fact, he believes that companies are
leading consumers in many instances when it comes
to changing behaviour. “There is an expectation that
consumers will shift over the next two or three years,
but it’s not really that strong at the moment.”
0
10 20 30 40 50 60 70
Significant impact Moderate impact
An industry standard on energy efficiency on IT equipment would cause us to change our procurement policies
To what extent do you agree or disagree with the following statements, in terms of how they apply within your organisation?
(% of respondents, selecting ‘Significant impact’ and ‘Moderate impact’ only)
8. A recommendation by a
shareholder with at least

1% of a company’s voting
shares. Companies are
legally bound to present
the issue for a vote by
other shareholders at
the AGM.
© The Economist Intelligence Unit 2007 9
IT and the environment
A new item on the CIO’s agenda?
Not since Rachel Carson wrote Silent Spring in
the 1960s, a book credited with having launched
the global environmental movement, has green
awareness been such a publicly discussed issue. Yet
there is still a surprising lack of knowledge about
the subject. Only 16% of respondents polled for this
report believe that flights and other (non-commute)
business travel have a significant impact on the
environment. An astonishing 26% believe that
business travel has no environmental impact—and
15% believe the same of IT.
Another surprising find was that more people
believe that their commute to work (29%) has a
significant impact on the environment than those who
think the same of supply chains (23%). And nearly
one-half of all respondents believe that working from
home has no environmental impact.
Getting the basics right
But although there appears to be a significant
amount of misinformation or confusion, older
messages around saving paper and recycling seem

to have become entrenched. For example, 84% of
respondents say their businesses recycle paper and
toner cartridges, and more than two-thirds (69%)
have a printing policy, advising staff on how to reduce
their paper consumption. “Initiatives that were in
the background in IT, such as reducing the amount of
printing, are now coming to the foreground,” notes Mr
Liggins of TNT.
“We are very aggressive with respect to online
banking initiatives, such as the use of image
enablement and online statements,” says Marty
Lippert, CIO at the Royal Bank of Canada. “Millions
of our customers receive statements online—and
many no longer get cheques, they just see images
of them online.” For the bank, this not only reduces
its environmental impact, but also “significantly”
reduces its paper costs.
Encouragingly, initiatives to cut energy
consumption—and thereby reduce an organisation’s
carbon impact—are also making headway. Two-thirds
of firms polled for this report routinely advise staff
to turn off their desktop computer when it is not
being used. Others, however, admit to being laggards
here. “Unfortunately, nothing,” admits one banking
executive when asked what his firm was doing.
Working from home is popular with one-third of
organisations, although it is a lot less popular in Asia-
Pacific (15%) than it is in Western Europe (39%). Fully
60% of respondents believe that home working will be
an important way in which IT will help to contribute

to green practices. Even so, in about one-half (47%)
The action being taken
Personnel (eg, daily commute to work)
Production and manufacturing
Supply chain (eg, shipping, freight)
IT (eg, energy use)
Delivery and customer services (eg, shipping)
Sales and marketing (eg, flights and other travel)
General back-office functions (eg, energy use)
Remote workers (eg, employees working at home)
In your view, how much of an impact does each of the following
parts of your business have on the environment (considering
their use of energy and resources and overall carbon
emissions)?
(% of respondents, selecting ‘Significant impact’ only)
Source: Economist Intelligence Unit survey, July 2007.
29
25
23
19
18
16
13
6
10 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
of the organisations that allow home working, less
than 10% of staff are eligible to do so. And few
organisations allow many of their staff to work from

home for more than one day a week.
Also, teleworking is not necessarily the panacea it
purports to be. At least, not yet. Research
9
conducted
by Oxford University Centre for the Environment
(OUCE) found that the extra heat and lighting needed
at home wipes out 80% of energy savings accrued
through not commuting. The team concluded that
government and companies need to promote changes
in the way people use technology if the green
advantages of teleworking are to be realised.
Reforming the data centre
But there are other low-hanging fruit that are far
juicier than recycling teleworking, delivering both
cost and environmental benefits. Much of this can be
found in the data centre. As the corporate thirst for
data increases, these centres have grown to the size
of aircraft hangars—and draw significant power from
the grid.
Mr Culver recalls his boss showing him a data
centre, 20 years ago. “The room was about 6,000 sq ft.
My manager said to me: ‘One of these days all of this
stuff will sit in one box.’ And he was right, but now
we buy hundreds of those boxes. If you look at the
increase in information storage it used to be measured
in terabytes; now it’s up to petabytes and continuing.”
According to the EPA, US data centres and servers
consumed 61bn kilowatt-hours (kwh) in 2006,
equivalent to the electricity consumed by all of the

country’s colour televisions—or about 1.5% of all
electricity consumption in the country
10
. This energy
use is estimated to have doubled since 2000, and
could nearly double again by 2011, under current
efficiency trends.
“Systems which are standing idle consume power,”
says Mr Meyer of IDC. “Often, even production systems
are at low utilisation rates of 10%-15%. With the
Which of the following IT-related initiatives has your company
implemented in order to reduce its overall environmental
impact? Select all that apply.
(% respondents)
Recycling programme for paper and toner cartridges
A printing policy, advising staff on how to reduce printing
An energy policy, advising staff to turn off PCs when not in use
Data centre server consolidation, to improve energy efficiency
Server virtualisation, to improve energy efficiency
Set printers to automatically print double-sided pages
Automated system for turning off PCs and/or monitors when not in use
Increased home working
Revised data centre design, to improve energy efficiency
Energy management software within data centre, to improve energy efficiency
Sourcing energy from renewable sources
Reusing heat generated within data centre (eg, for office heating)
Other
84
69
67

63
47
41
35
31
30
21
16
8
6
Source: Economist Intelligence Unit survey, July 2007.
9.David Banister, The
Costs of Transport on the
Environment – The Role of
Teleworking in Reducing
Carbon Emissions, Oxford
University Centre for the
Environment, May 2007.
10. US Environmental
Protection Agency, Report
to Congress on Server
and Data Center Energy
Efficiency, August 2007.
In the lead Recycling and energy policy adoption, by sector
(% respondents)
Source: Economist Intelligence Unit survey, July 2007.
60 65 70 75 80
60
65
70

75
80
85
90
95
100
Public sector and education
IT, telecommunications,
entertainment, media and
publishing
Manufacturing and automotive
Financial and professional
services
Retailing, consumer goods,
logistics and distribution,
transportation, travel and
tourism
Recycling programme (%)
Energy policy (%)
© The Economist Intelligence Unit 2007 11
IT and the environment
A new item on the CIO’s agenda?
introduction of virtualisation technologies, these
systems can be consolidated and their utilisation
increased.” Virtualisation appears to be a popular
option for energy efficiency. Almost one-half of the
organisations surveyed for this report (47%) had a
server virtualisation programme in place. Even more
are involved in data centre consolidation (63%).
Cooling is another option for energy saving.

For every dollar spent powering a server, another
dollar is spent cooling it
11
. Many companies have
point solutions that do little to optimise the overall
cooling. According to Mr Meyer, there is a lot of over-
provisioning of cooling in data centres, or, as Mr Culver
put it, “You can hang meat in most data centres.”
The solution to cooling data centres is often quite
straightforward. Wells Fargo achieved energy savings
of 15% in one of its data centres by replacing air-
conditioning units with a central fan. “There is quite
a degree of confusion about what really would make a
difference, and what’s hype,” notes Mr Restorick. “The
ridiculous thing about carbon management is that it’s
actually quite simple.”
Of course, data centres represent only one part of
the challenge—and typically the easier part. This is
primarily because corporate data centres are typically
contained within a single place and have a single
budget holder responsible for them. The distributed
computing infrastructure beyond the data centre—
encompassing PCs, laptops, printers, mobile phones,
hand-held computers, networking equipment and so
on—is where it is becoming more challenging to make
breakthroughs in energy saving.
Recycling: going from cradle to grave
There has been a lot of focus on the energy expended
to run IT equipment, but studies in this field suggest
that embodied carbon can account for a significant

portion of a computer’s lifetime carbon dioxide
The ever-elusive
paperless office
The paperless office as a concept has been
around since the mid-1980s but is argu-
ably even further away from being realised
today than when it first appeared. “There
are two phases in its development. Firstly
when computers started becoming useful,
people started talking about the paper-
less office but it was not actually viable.
Then in the more recent second phase with
the advent of the internet it really looked
as if the concept could happen. In retro-
spect, this was also blue-sky thinking,”
says Braden Allenby, professor of civil and
environmental engineering at Arizona State
University.
One major US corporation agrees. “We
never got as far as the paperless office.
Between the mid-1990s and mid-2000s,
the question for us was, “If we buy recycled
paper and if we recycle this paper, then
who cares how much we use?” The answer is
paper costs money,” says Michele Blazek, a
director for AT&T environment, health and
safety compliance.
Cost-cutting at the US phone giant was a
main driver in reducing paper consumption,
according to Ms Blazek. Exact figures on its

progress are hard to calculate since the US
telecoms giant acquired or shed a number of
businesses over the last ten years, making
comparisons difficult. Most recently, it was
itself acquired by regional Bell carrier SBC.
The move to make information such as
engineering manuals and human resources
material such as pay cheques available online
was also aided by a high degree of tele-
working and a large number of field staff,
particularly telecoms engineers. For both
groups, accessing services from a central
electronic source was more convenient.
Anecdotally, Ms Blazek reckons that less
paper is used today by AT&T staff. “I think
individual paper usage has gone down,
including the consumption of mail such as
periodicals. Back in 1994, our global real
estate business found that their average
employee used 2.5 lb of paper a day. We
don’t have the same problem anymore. A
clean desk is not that hard anymore. It’s
really a behavioural issue.”
Of course, some take longer than others
to change. Ms Blazek admits to one errant
colleague who a decade ago routinely
printed out each of his e-mails each morning
promptly at 11 am before reading them.
She claims such antics are now in the past.
But other observers are more sceptical that

the advent of e-mail has actually increased
paper consumption in offices. Overall,
however, as far as anyone can tell, the
paperless office remains elusive.
11. Stephanie N Mehta,
“Server Mania”, Fortune,
August 7th 2006.
12 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
emissions, depending on whether it is sold wholesale
to business or government (up to 20%) versus being
sold via a retail supply chain (up to half)
12
. The average
PC requires 240 kg of fossil fuels, 22 kg of chemicals
and 1,500 kg of water to make
13
. “The energy
required to produce a computer is far higher than for
other comparable products,” agrees Anja ffrench, a
supply officer at Computer Aid International, a UK-
based charity. For an appliance like a refrigerator,
the majority of the energy is consumed during its
operation, whereas with computers it is important to
save energy in the production phase and increase the
life span of its use.
Computer Aid sends discarded computers to
developing countries where they are re-used for
another three to four years to ensure the maximum

possible return on the environmental cost of
production. The computers are used at weather
stations, hospitals, schools and community
organisations.
ITC in India, a major conglomerate, returns its
printer cartridges and other consumables back to
the relevant vendor. Other equipment is donated to
disadvantaged communities: “When we upgrade to
higher technology levels, the computers replaced
still have a useful life for many years, and we make
them available to disadvantaged schools to support
computer education programmes,” says Nazeeb Arif, a
vice president at the firm.
However, not all organisations are keen to donate
their old computers to charity—in fact just 15%
of survey respondents chose this route. “We don’t
give them to charity because with the WEEE [Waste
Electrical and Electronic Equipment] regulations we
become the supplier,” says Mr Liggins of TNT. “We
wouldn’t want anything to do with that because of the
potential liabilities.” TNT’s old equipment is broken
down into component parts and recycled. This survey
shows that this is the most common method for
disposing of obsolete IT equipment, selected by 27%
of respondents.
Only 12% of companies recycle old kit via vendor
programmes, whereas 57% believe that technology
vendors should be responsible for disposing of
obsolete equipment, suggesting that vendors could
play a much bigger role. However, 16% of people are

not aware of environmental regulation regarding
the disposal of IT equipment. And a small core of 7%
admits that their firms are not currently compliant
with environmental regulation. So much scope for
improvement still remains.
All of these issues add up. CIOs today not only have
to balance all of their usual demands, but also need to
take into consideration environmental issues, rising
energy bills during the operation of that equipment—
and how to dispose of all of it in a responsible manner.
How does your organisation primarily dispose of its obsolete
IT equipment?
(% respondents)
Recycled via third-party organisation
Pay for physical destruction via third party
Donated to charity
Recycled via vendor programme
Sold to employees
Dumped
Auctioned externally
Other
27
15
15
12
7
4
3
17
Source: Economist Intelligence Unit survey, July 2007.

12. Christopher L. Weber,
et al., Carbon Emissions
Embodied in Importation,
Transport and Retail of
Electronics in the U.S.:
A Growing Global Issue,
May 2007
13. Ruediger Kuehr
and Eric Williams
(eds),Computers and
the Environment,
Understanding and
Managing their Impacts,
2003.
© The Economist Intelligence Unit 2007 13
IT and the environment
A new item on the CIO’s agenda?
Recycling IT
UPS, a parcel delivery specialist, is using
its advanced online logistics technology
to help the organisation and its customers
manage the recycling of their waste. “It’s
about making the most of the work the com-
pany does,” says Graham Nugent, the com-
pany’s regions applications manager. “We
want to provide recycling to our customers
and provide an effective returns policy that
grows out of the popularity of the web.”
The delivery firm helps its customers
dispose of unwanted electronics through an

asset recovery and recycling management
service, which uses UPS’s supply chain
technology to provide an enhanced logistics
service. “The return service helps us get
to waste technology,” says Mr Nugent.
“Sensible destruction is really important, as
is the re-use of components.”
Mr Nugent says that another bespoke
website helps UPS technical staff to decide
whether computer equipment should be
repaired or recycled. In the UK, the company
has initiated a recycling programme and if
a PC is still usable it is sent to a charitable
organisation. The scale of this operation
is growing steadily: UPS recycled 2.7m
lb of electronic equipment from its own
operations in 2006—and a total of 19.7m lb
since 2000.
“We’ve used IT to analyse the way we
conduct business to ensure we operate as
efficiently as possible,” adds Mr Nugent.
“Originally, such analysis was important in
helping the company to save money - now
it’s to help save the environment.”
Perhaps surprisingly, some believe the
US to be ahead of the game when it comes
to recycling. Cormac McCarthy, IT director
for Ben Sherman, a fashion brand, agrees
that firms across the Atlantic are light years
ahead of European organisations when it

comes to technology waste and recycling.
“American firms will increasingly only invest
in a business if it has an environmentally
responsible strategy in place, so you’ll start
to see more green auditing and companies
establishing an awareness of their carbon
footprint.”
Mr McCarthy says Ben Sherman, which is
owned by Oxford Industries, a US clothing
manufacturer, has been quick to introduce
a range of environmentally responsible
strategies. For example, waste cardboard
packaging that cannot be reused or recycled
is offset by planting replacement trees. And
office renovations worldwide now include
energy-efficient computers and lighting.
Other green policies have developed
in a more ad hoc nature. While employees
have been recycling paper and toner in
individual offices for many years, this
reprocessing has not been part of a wider
business strategy until more recently. “Now
recycling has become the de facto standard
for the company around the globe and we
are more environmentally aware,” confirms
Mr McCarthy.
But even more needs to be done in other
areas of the organisation, especially with
regard to energy efficiency and computer
facilities being left on at night. Mr McCarthy

expects a key individual to be made
responsible for the global environmental
impact of Ben Sherman during the next 6-12
months. And with green computing set to
dominate the business agenda, he hopes
to be considered for the role. “It’s like Y2K
again, except this time green is a concept
that really is a significant issue.”
14 © The Economist Intelligence Unit 2007
IT and the environment
A new item on the CIO’s agenda?
Climate change has already had a big impact on some
industries, such as insurance and tourism, to name
two, but it will affect all industries as energy prices
increase and carbon emissions legislation comes on
stream. While only 6% of those polled say that their
organisations plan to appoint someone at board level
over the next three years to handle energy and the
environment issues, it is likely that the CIO will have
a louder voice in this matter, given the demands for
power made by the IT function. Played correctly, IT
could make a big mark on the issue.
At present, the CIO plays only a minor role when
it comes to environmental concerns. “I think a lot
of CIOs are quite interested in this [environmental
issues], but feel they’ve been excluded from the
corporate social responsibility discussions,” stresses
Mr Restorick of Global Action Plan.
But the CIO’s contribution as technology
innovators will have a big impact on the so-called

triple bottom line—taking into account environmental
and social performance, along with financial
performance. Also, there is a strong correlation
between IT investment and productivity growth.
“Servers and computing equipment are probably
the main driver in business getting more efficient,”
affirms Mr Culver of Wells Fargo. “A lot of growth is
achieved through leveraging technology.”
Given that firms are likely to continue to invest
heavily in IT, it is imperative that the IT function is up
to speed on environmental issues and invests wisely
in technology solutions, rather than just reacting to
growth by throwing more capacity at it.
“From an overall environmental affairs perspective,
we recognise that the environment is something
that our stakeholders care about, our customers care
about, our investors care about, we care about,”
explains Mr Culver. “And what you’re starting to
see throughout the organisation is environmental
responsibility integrated into what we do.”
Conclusion
© The Economist Intelligence Unit 2007 15
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
Appendix
In June and July 2007, The Economist Intelligence Unit surveyed 213 chief information officers and other senior
IT executives from around the world. Our sincere thanks go to all those who took part in the survey. Please note
that not all answers add up to 100%, because of rounding or because respondents were able to provide multiple
answers to some questions.
No

Yes, we have a director
with a role specifically
focused on energy
and/or environmental
issues
Yes, this role is handled
by our CIO / IT director
Yes, this role is handled
by another director
No, but we plan to
appoint someone within
three years
Don’t know
34
17
10
29
6
5
Does your company have someone at the board level responsible
for energy and environmental issues?
(% respondents)
Yes
No
Don’t know
49
45
6
Does your company have a programme in place to reduce its
overall carbon impact?

(% respondents)
We do not have precise reduction targets
Cuts of 1-10%
Cuts of 11-20%
Cuts of 21-30%
Cuts of 31-40%
Cuts of more than 40%
We plan to be entirely carbon neutral by 2012
52
15
11
10
0
3
9
If your company does have a carbon reduction programme,
what cuts does it intend to make by 2012?
(% respondents; excludes respondents selected ‘Not applicable’ and
’Don’t know’)
Yes
No, but we are
considering doing so
within the next three
years
No
Don’t know
9
15
62
13

Does your organisation pay to offset some or all of the carbon
emissions produced in the production and operation of its IT
equipment?
(% respondents)
1,000-5,000
More than 10,000
5,000-10,000
Fewer than 1,000
42
39
19
0
Approximately how many people does your company employ?
(% respondents)
16 © The Economist Intelligence Unit 2007
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
Significant impact Moderate impact No impact Don’t know Not applicable
Personnel (eg, daily commute to work)
Production and manufacturing
Supply chain (eg, shipping, freight)
IT (eg, energy use)
Delivery and customer services (eg, shipping)
Sales and marketing (eg, flights and other travel)
General back-office functions (eg, energy use)
Remote workers (eg, employees working at home)
In your view, how much of an impact does each of the following parts of your business have on the environment (considering their
use of energy and resources and overall carbon emissions)?
(% of respondents)
29 58 10 3 1

25 34 21 2 18
23 51 16 3 8
19 63 15 2 1
18 49 22 1 9
16 47 26 2 8
13 63 21 2 1
6 33 46 3 12
Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree Not applicable/Don’t know
Our organisation promotes good practices regarding IT usage to employees (eg, reminders to shut down PCs at night, etc)
We do not measure the environmental impact of our IT systems and policies
Increased home working will be an important way in which IT will help contribute to green practices within our business
An industry standard on energy efficiency on IT equipment would cause us to change our procurement policies
We do not measure the company’s overall environmental impact
Our CIO/IT director is heavily involved in our organisation’s overall plans to reduce its carbon impact
Environmental concerns don’t currently play any role in our planning and strategy
To what extent do you agree or disagree with the following statements, in terms of how they apply within your organisation?
(% of respondents)
47 31 12 6 4 1
26 28 12 21 12 2
20 39 19 11 8 3
19 45 19 11 5 1
19 30 9 20 19 3
18 33 16 16 11 5
9 24 8 27 33 1
© The Economist Intelligence Unit 2007 17
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
Critical factor Important factor Moderately important factor Minor factor Not a factor Not applicable/Don’t know
Reliability
Price

After-sales support
Use of toxic materials within equipment (eg, lead, PVC)
Vendor’s financial strength/ reputation
Current vendor relationship
Delivery times
Equipment’s energy efficiency
Vendor’s equipment disposal/ recycling services
Vendor’s environmental credentials
Vendor’s offsetting scheme, to account for carbon impact of IT equipment’s operational lifecycle
When tendering for new IT equipment (eg, PCs, servers), how much of a factor does each of the following factors play in your
purchasing decision?
(% of respondents)
63 29 6 1 1 0
32 57 9 1 1 0
30 51 15 4 1
0
22 24 21 18 10 5
18 49 24 9 1 1
16 56 20 7 1 0
13 36 39 9 1 1
12 34 31 18 5 1
10 24 35 19 10 2
7 25 32 21 13 2
6 13 32 22 22 5
If your organisation pays to offset IT-related carbon emissions,
what percentage does it offset?
(% respondents)
1-10%
11-20%
21-30%

31-40%
41-50%
More than 50%
We offset all carbon emissions
Don’t know
Not applicable—we do not offset IT-related carbon emissions
6
5
1
1
1
1
1
18
68
If your organisation monitors or audits its IT-related energy
spending, how has this changed over the past two years?
(% respondents)
We don’t monitor our organisation’s IT-related energy spending
Consumption has decreased
No change
Increased 1-10%
Increased by 11-20%
Increased by 21-30%
Increased by 31-40%
Don’t know
42
15
10
12

9
1
2
9
18 © The Economist Intelligence Unit 2007
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
Which of the following IT-related initiatives has your company
implemented in order to reduce its overall environmental
impact? Select all that apply.
(% respondents)
Recycling programme for paper and toner cartridges
A printing policy, advising staff on how to reduce printing
An energy policy, advising staff to turn off PCs when not in use
Data centre server consolidation, to improve energy efficiency
Server virtualisation, to improve energy efficiency
Set printers to automatically print double-sided pages
Automated system for turning off PCs and/or monitors when not in use
Increased home working
Revised data centre design, to improve energy efficiency
Energy management software within data centre, to improve energy efficiency
Sourcing energy from renewable sources
Reusing heat generated within data centre (eg, for office heating)
Other
84
69
67
63
47
41

35
31
30
21
16
8
6
Yes
No, but plan to
implement one within
the next three years
No
Don’t know
33
12
54
1
Does your organisation have a policy in place to allow and
encourage home working for one or more days per week?
(% respondents)
1-10% of our
workforce
11-25% of our
workforce
26-50% of our
workforce
More than 50% of
our workforce
Don’t know
Not applicable—we

do not have a home-
working policy
22
12
4
4
5
54
If your organisation does have a such a policy, what percentage
of staff is eligible to work from home?
(% respondents)
Which of the following IT-related initiatives, in your opinion,
are most effective in terms of their overall environmental
impact? Select up to three.
(% respondents)
Recycling programme for paper and toner cartridges
A printing policy, advising staff on how to reduce printing
Automated system for turning off PCs and/or monitors when not in use
Data centre server consolidation, to improve energy efficiency
An energy policy, advising staff to turn off PCs when not in use
Set printers to automatically print double-sided pages
Server virtualisation, to improve energy efficiency
Increased home working
Revised data centre design, to improve energy efficiency
Sourcing energy from renewable sources
Energy management software within data centre, to improve energy efficiency
Reusing heat generated within data centre (eg, for office heating)
Other
45
38

32
30
29
29
22
18
13
13
10
7
3
© The Economist Intelligence Unit 2007 19
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
Yes, in all markets
we operate in
Yes, in all markets
that have relevant
legislation
No, but we are
working to become
compliant within
the next two years
No, we are not
compliant
Not aware
legislation existed
Not
applicable/Don’t
know

34
26
4
7
16
13
Is your organisation compliant with any legislation regarding
disposal of electronic goods (eg, European WEEE directive)?
(% respondents)
How does your organisation primarily dispose of its obsolete
IT equipment?
(% respondents)
Recycled via third-party organisation
Pay for physical destruction via third party
Donated to charity
Recycled via vendor programme
Sold to employees
Dumped
Auctioned externally
Other
27
15
15
12
7
4
3
17
In your view, which of the following parties should be
responsible for disposing of end of life IT equipment?

Select all that apply.
(% respondents)
My own organisation
Equipment vendors
IT suppliers
Local government
Other
69
57
42
20
3
In which region are you personally based?
(% respondents)
Western Europe
Asia-Pacific
North America
Middle East and Africa
Latin America
Eastern Europe
59
19
19
2
1
0
About the respondents
Which of the following best describes your title?
(% respondents)
CIO/CTO

Head of IT
SVP/VP for IT
CEO/President/Managing director
CPO
47
32
12
8
1
What is the size of your overall enterprise (in US dollars) in its
last fiscal year?
(% respondents)
Under $100m
$100m – $250m
$250m – $500m
$500m – $1bn
Over $1bn
8
22
10
19
41
20 © The Economist Intelligence Unit 2007
Appendix: Survey results
IT and the environment: A new item on the CIO’s agenda?
What is your primary industry?
(% respondents)
Manufacturing
Financial services
Healthcare, pharmaceuticals and biotechnology

IT and technology
Professional services
Government/Public sector
Education
Transportation, travel and tourism
Energy and natural resources
Retailing
Construction and real estate
Consumer goods
Logistics and distribution
Entertainment, media and publishing
Automotive
Chemicals
Telecommunications
17
14
11
9
8
8
6
4
3
3
3
3
3
1
1
2

2
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of this information, neither The Economist Intelligence
Unit Ltd. nor the sponsor of this report can accept any
responsibility or liability for reliance by any person on
this white paper or any of the information, opinions or
conclusions set out in the white paper.
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