For the past year, Richard Cameron has been on a mission. The divisional CFO of BT has been overseeing an ambitious project that could help the £20.7 billion (€26 billion) UK telecoms group slash millions of pounds a year off its energy bills and cuts its carbon emissions by 80% from 1996 levels by 2016. But it’s IT, not finance, that’s taking centre stage. A large part of the plan hinges on making the company’s IT more environmentally friendly, from software that boosts the energy efficiency of its servers to encouraging staff to turn off computers.
It’s a tall order, not least because of all the hype. When it comes to judging the green credentials of suppliers’ offerings, “you can’t accept anything in blind faith,” says Cameron, who became CFO in June of BT Operate, which runs customer services and monitors all of BT’s networks.
Not many companies are willing to take the leap. When Brocade, a network storage company, surveyed 8,000 European directors earlier this year, it found that less than a fifth were actively seeking to buy green IT. As for the rest, many said they found the eco-friendly IT pitches “all marketing hype.” So how can CFOs know whether their IT leaders are investing in truly eco-friendly software and hardware or — to use a new term coined by industry geeks — are just being “greenwashed”? “There is a lot of hype about the green side of IT,” says Peter Williams, an analyst at Bloor Research. “If finance directors do not understand the technologies, they may have the wool pulled over their eyes.”
To avoid succumbing to greenwash, CFOs should grill suppliers about their products. For example, a hardware supplier may advise a customer to replace an existing server with a newer model that uses less power and is marketed as more environmentally friendly. But the supplier may not reveal that the old server could have been modified to use less energy.
Part of the probing should include due diligence to find out whether the vendors themselves are toeing the green line. Such due diligence is not a widespread practice. A survey of 350 IT decision makers at UK companies earlier this year by Bell Micro, a computer components distributor, found that while nearly three quarters of respondents outsourced some or all of their IT, only around 25% check the green IT credentials of their outsourcer.
Environmental experts predict that this might become easier as more vendors follow the lead of Lexmark, a US maker of printers and toner, which has lowered its products’ energy consumption and runs a programme to reclaim and recycle used equipment. Its annual environmental sustainability report publishes progress on helping customers to print less and recycle more, and its own use of environmentally friendly materials.
BT’s Cameron recommends proactively targeting vendors to get green issues on the table. With a network of nearly 700 vendors, BT’s managers hold regular meetings with each supplier. “It’s about pushing to get energy efficiency on the radar of our [IT] suppliers,” Cameron says. “It’s a key commitment to reduce our operating costs and carbon footprint. We need our whole supply chain lined up to help us deliver that.”