Dynamic Business

For many small businesses, ICT (Information Communication Technology) infrastructure is now one of the largest contributors to their carbon footprint. Driven by current economic times and environmental concerns, many small businesses are making green considerations an important factor in ICT purchasing decisions.

Up until very recently the green spotlight has focussed most on the big end of town—mining, petrochemicals and utilities industries. These industries have made attempts to develop robust environmental management policies and have been concerned to establish their green credentials. Whilst not always seen as shining beacons for the environment they have made significant efforts to address environmental concerns raised by their business practices.

That spotlight has altered and it is the IT industry which is under increased scrutiny. Now more than ever before the green credentials of information communication technology (ICT) providers are under the microscope and are seen as critical to their standing in the marketplace. As climate change, carbon emissions and energy consumption have become issues of mainstream concern, customers both large and small are now assessing providers on the environmental impact of their technology offerings rather than focussing only on more traditional criteria such as performance and value for money.

Impact of ICT industry on the environment
Businesses in Australia generate more carbon dioxide emissions from their use of ICT than the entire civil aviation sector – with ICT usage generating 1.52 percent of the total national carbon dioxide emissions compared to less than 1 percent for civil aviation. In the United States, servers alone account for 1.5 percent of all energy consumption (a figure expected to double in the next few years). Organisations are beginning to factor carbon emission costs into their pricing structures, as they recognise that use of environmentally friendly ICT is a market necessity.

For SMEs rising energy costs provide further financial incentive to pursue green ICT solutions. It has been estimated that electricity costs will probably rise by 50 percent to 100 percent by 2012 compared to an extra $20 per PC and $30 per server to introduce more environmentally friendly IT equipment into the office. Electricity used for operations and cooling accounts for 60 percent of the day-to-day running costs of a typical data centre and due to decreasing server prices, it is estimated that it will soon cost more to power and cool servers over their lifespan than to purchase them.

Government Response
In response to the increasing market trend towards green ICT solutions, governments abroad and at home are imposing environmental compliance standards on IT procurements and emissions. Internationally the EU has implemented directives regulating waste electrical and electronic equipment and hazardous waste. The Australian federal government too has lawmaking in this area very much in its sights. Recently, the National Greenhouse and Energy Reporting Act 2007 (Cth)(the “NGER” Act) established the National Greenhouse and Energy Reporting Scheme (NGERS). Organisations both large and small will need to assess whether they meet thresholds for greenhouse gas emissions, energy consumption or energy production. SMEs falling within scope will need to budget for such assessments and any resulting compliance and reporting costs. Time is running out as the first reporting year is 2008/2009 and organisations will be required to register by the end of August 2009. Even if your organisation does not fall within the threshold for registration and reporting, SMEs dealing with larger companies subject to the new requirements are likely to find themselves caught up in the race to improve reporting on emissions and consumption to these companies whether they like it or not.

As one of Australia’s largest ICT consumers, the federal government has indicated that it may introduce grants of up to $1 million for secondary schools to invest in thin client technology. Thin clients have been singled out as the preferred technology for their reduced cost and improved energy consumption when compared to the usual desktop environment. As the federal government rolls out its National Secondary School Computer Fund, providing computers to every student in years 9-12, ICT vendors with strong green technologies who are able to meet the required standards appear likely to be well placed to profit from this initiative.

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