Employees and consumers want greener products, greener services and reduced energy consumption. But as marketers and vendors respond, are we looking at just another big greenwash?
 

By Hailey Eisen

Politicians and big companies have been pushed, if not shoved, into listening to the environmental concerns of their citizens and consumers over the last few years. Now many of those same people are looking at whether their employers’ policies are green enough, and if they are demanding enough of their suppliers. And tech providers are not immune, with increasing questions about both the electricity sucked up by computers and about what happens when those aging devices are no longer wanted.

These concerned voices are not lost on marketers and manufacturers, who realize that green may be the new gold, as buyers increasingly expect products and services that do no environmental harm.

“The growing demand for more sustainable products and services could translate into one of the biggest new markets in recent memory,” said Bruce McIntyre, leader of the sustainable business solutions practice for PricewaterhouseCoopers (PwC) Canada.

“I have this tingling feeling that 2008 will be the year everyone wakes up and begins to put things into practice, especially on the technology side,” said his colleague Jonathan Hirst, a director in PwC’s Advisory Practice. “I think this is the wake-up call for technology vendors and IT organizations across all businesses.”

For a recent PwC study entitled Going Green: Sustainable Growth Strategies, conducted in conjunction with the Economist Intelligence Unit, 148 senior technology executives from around the world were surveyed to determine how the world’s focus on global wellness is impacting the technology sector, and what corporate plans are being put into place in order to meet the concomitant growing demand.

The survey focuses on technology executives from five key regions: Asia, Europe, North America, Latin America, and the Middle East and Africa. According to the study, 61 per cent of technology executives believe that it is “important” or “very important” for their companies to take steps to reduce their environmental impact, a fact that shouldn’t come as much of a surprise in a day and age where media, politics and society all focus on green issues.

Why go green?
McIntyre said a number of factors are driving the survey results in the global technology industry. The first is enlightened self-interest. The philosophy that a company will “do well by doing good” supports a growing focus on corporate social responsibility and the drive to “green” business practices. In order to respond to growing market demand, some technology companies are being proactive by investing in sustainable R&D and reevaluating their manufacturing and packaging processes in order to stay ahead of the curve and ensure a reduction in environmental impact.

Another driving factor is pressure exerted by shareholders, institutional investors and current and potential employees. Companies now realize that many investors and Gen Y employees are looking for organizations that demonstrate ethical and sustainable business practices and offer feel-good employment and investment opportunities. “This younger generation has grown up very concerned about these issues and it’s as though there has been a cultural shift in terms of more awareness surrounding the environment,” McIntyre said. For organizations looking at the big picture, these two influencing forces seem to be enough to drive legitimate change.

“Most companies today are aware of reputation issues and don’t want to be painted with a bad brush,” McIntyre said. “Not only are they responsible for their own practices but also the actions and decisions of the entire supply chain.” For this reason, corporations from technology manufacturers to software developers are beginning to feel pressure along the supply chain, and this is translating into action.

According to the PwC survey, currently 18 per cent of technology executives claim their companies practice environmentally preferred purchasing, with 53 per cent stating they will implement this practice in the next two years.

“This report is reasonably indicative of what is going on in a variety of industries,” McIntyre said. Not only are the above factors influencing change, but also organizations across all sectors are feeling the drastic increase in energy costs and the impending threat of government legislation and taxes which will ultimately make unsustainable practices increasingly expensive. Industries that develop their own standards for sustainability reporting will be in a good position, McIntyre said, to face government legislation. This is already beginning to influence business practices in Europe and parts of the U.S.

Greenwashing
While this is not the first time the world is “seeing green,” marketers today are facing a unique challenge.

The 1980s and 1990s saw intense environmental hype that dissipated as quickly as it appeared, leaving in its wake a torrent of cynical consumers. Marketing executives were accused of “greenwashing” and “green spinning” the companies and products they represented, misleading consumers and making false claims.

“Increasingly, we are now seeing successful green marketing campaigns that are [going mainstream by] removing the green message altogether,” said Detlev Zwick, associate professor of marketing at the Schulich School of Business at York University in Toronto. What will drive this second and third wave of green marketing, he explains, is making green products and services as mainstream and cost effective as possible. “It won’t be driven by moral obligation because, bottom line, there is still only a small group of consumers who will pay a premium for environmentally sound products.”

One of the roles marketing will have in spreading the green message is in raising awareness. “It’s up to them to create literacy in the marketplace in terms of credible environmental and sustainable claims and green credentials,” Zwick said. “The best way to reach businesses and customers is not at the point of sale but rather via Web sites, social networking sites and media attention.”

No matter how skeptical some consumers and businesses still are, Zwick is confident this global campaign for green is here to stay. “But, I’m not a believer that marketing will play an important role in greening the economy,” he said. “What will deepen the consumption of green products and services is government policy.”

Sustainable businesses
Until governments begin implementing taxation and legislation that will ultimately force business to “green up,” individual corporations and industry sectors are taking issues of the environment into their own hands—and they’re using technology as a driving force for change.

While it may seem that technology implementation is a cause of increased energy consumption in corporations, the PwC study reveals a unique opportunity for technology organizations and IT departments to promote the capabilities of IT in reducing the carbon footprint.

Using creativity and technology to promote internal change pushes many corporations to think outside of the box, and according to the study, this “has a direct impact on the level of collaboration and innovation found throughout the entire technology value-chain, including marketing, human resources, research and development processes, manufacturing and supply chains.”

“The pendulum swing towards green technology is unleashing a creative disruption within the global technology market,” McIntyre said. In keeping with the study, which states that 60 per cent of technology manufacturers are currently developing green products and services, multinational corporations such as Sony, Nokia, Microsoft, Dell, HP and many others are beginning to focus a portion of R&D dollars on sustainable product innovation and e-waste recycling programs. The increasing global demand for a lighter footprint is driving these changes, which some companies have been gearing up for since the last green wave at the turn of the century.

But again, altruism is not the only motivating factor—60 per cent of companies surveyed said energy savings is one of the most important factors in their company’s environmental decision-making process. “Sony sees the value in adopting a sustainable business model because reducing energy consumption and emissions results in a significant cost savings,” said Nick Aubry, manager of National Parts Operations and Environment with Sony Canada.

Sony has committed to developing energy saving devices, reducing harmful chemical substances in the manufacturing process, and coordinating take-back programs that recycle and reuse electronic waste at end of life, he said. “Though some people see the corporate shift toward sustainability as greenwashing, concern for the environment has been part of Sony’s corporate DNA for at least the past 10 years.”

While technology manufacturers like Sony are using the environment as a springboard for the development of innovative green products and services, not only marketing themselves as sustainable but also tracking and recording their eco footprint, entrepreneurs are also seizing the opportunity to develop cleaner solutions in the form of new businesses. Sempa Power Systems, for example, provides technology and implementation services it says help commercial building owners and managers lower energy costs, reduce greenhouse gas emissions and cut energy consumption. The Sempa Hybrid Heating System is a patent-pending solution that automatically load balances fossil fuel sources with electricity consumption.

“For most of our customers we’re able to reduce heating costs from 10 to 30 per cent and reduce greenhouse gas emissions by 20 to 50 per cent,” said Ron Dizy, president and CEO of Sempa, founded in 2003. “True, if we did not offer economic benefits we would have far fewer, if any, customers. But if we only offered cost savings we wouldn’t have the same traction either. People are interested in capital projects that deliver both environmental and economic savings.”

Another growing trend in the quest to save the planet is the teaming up of like-minded companies within the technology sector. According to the PwC survey, this is also an industry-wide means of safeguarding against future government legislation.

Last summer, Intel and Google teamed up to form Climate Savers Computing, a non-profit organization that now has more than 100 member companies. “The mission of the group,” said Tau Leng of SuperMicro Computer in San Jose, Calif., “is to reduce by 50 per cent the power consumption worldwide by computers by the year 2010.”

The group, of which SuperMicro is a sponsor, aims to create industry-wide standards that will ensure cost and emissions savings, and educate the public, including consumers, about the harmful realities of energy consumption. “We are hoping that governments will get involved as well,” Leng said. “All of us want good things for the earth.”

More than a greenwash

According to PricewaterhouseCoopers’ February Going green study, technology companies are hopping on the green bandwagon—implementing initiatives in order to lessen their impact on the earth. While many have already begun to make changes, over the next two years the study shows an expected industry-wide increase in action. Of the 148 senior technology executives surveyed:

> 61% feel it’s important to take steps to reduce environmental impact
> 40% say the green movement creates significant market opportunities
> 60% say energy savings is one of the most important factors in the environmental decision-making process
> 20% state their companies maintain a formal and widely distributed environmental policy; 48% will do this over the next two years
> 60% of technology manufacturers are developing green products and services, while only 33% of service-oriented businesses are doing the same

The full survey is available online by conducting a search at www.pwc.com/extweb/pwcpublications.

“Put a price tag on CO2”


Al Gore on where carbon emissions and technology meet

Nobel Laureate Al Gore and Cisco CEO John Chambers want the world to know travel is no longer necessary to bring corporate and political leaders together, and that video conferencing can help businesses save on travel costs and reduce carbon emissions. To prove their point, the two took part in a March video conference that spanned four cities and two continents and was broadcast live to technology leaders across the globe.

The discussion, run on Cisco’s TelePresence technology, focused on the critical role innovation can play in mitigating climate change and the responsibility of the IT industry to provide open and secure platforms for widespread communication.

Vice President Gore spoke from his hometown of Nashville, Tenn., and provided an assessment of the earth’s current state of distress and the corporate and political response to climate change. “More and more people are recognizing the clear evidence that we are facing a planetary emergency,” Gore said. “However, when you give people a list of 25 priorities…the climate crisis consistently ranks at number 23 or 24. So what is needed is a new sense of urgency.” While Gore said business leaders are far ahead of political leaders, he said both groups have a long way to go. “The planet has a fever and the fever is going up,” said the recipient of the 2007 Nobel Peace Prize. “We need to change our light bulbs, but more importantly we need to change our laws.”

For the technology industry the power for change lies in innovation and collaboration. “The Internet, with technology tools all lumped together in unified communications, can suddenly change the paradigm,” said Cisco’s John Chambers. “Collaboration and social networking will allow people to work together toward a common goal in ways they could not before.” This is about the collaborative ability to no longer need to be in the same room to solve a problem.

And the best way to encourage more environmentally responsible innovation, in Gore’s words, is to “put a price tag on CO2. I believe the single best thing we can do in every country, starting with the United States, is to reduce taxes on businesses and employees and then replace every dollar of that revenue with pollution taxes—CO2 taxes,” Gore said. “If we put a price on carbon…that would unleash innovations for solar concentrating thermal electric power, wind energy, conservation and efficiency, teleconferencing and the many information-technology applications that can reduce CO2.”