sustainable it kpmg publication d. brack co-author

IT ADV ISO RY

Sustainable IT The case for strategic leadership

ADVIS ORY

About this paper The purpose of this paper is to provide a practical discussion about sustainable information technology (IT) and key ideas in the industry at present

KPMGrsquos IT Advisory practice recognize the significant amount of literature on sustainability and sustainable IT available in the public domain This paper seeks to provide business people with a primer on what sustainable IT means to them and their business the directions it may follow and actions they may consider to stay current

Terminology For the purposes of this paper we have chosen to use the term ldquosustainable ITrdquo In the Information Communications and Technology (ICT) industry this is used interchangeably with ldquogreen ITrdquo KPMG believes that ldquogreen ITrdquo is a restrictive term that limits the assessment of information technology to environmental factors whereas ldquosustainable ITrdquo incorporates the economic environmental and social factors around technology and innovation

Continued research This paper contributes to the collection of KPMG publications that address issues around climate change and sustainability It builds on KPMGrsquos technology thought leadership position and we invite you to contribute to further research by contacting one of our firmsrsquo professionals listed in this document

Sustainable IT copy 2008 KPMG International KPMG International is a Swiss

cooperative Member firms of the KPMG network of independent firms are affiliated with KPMG International

1

Contents

Executive summary 3

Foreword 4

Introduction 5

Key drivers 7

Power from the grid 8

Competitive advantage 9

Sustainable IT approach 11

Sustainability reporting legislation and regulations 15

Big business in sustainability 16

Concluding remarks 19

Glossary 24

Contacts 25

Sustainable IT

2 copy 2008 KPMG International KPMG International is a Swiss cooperative Member firms of the KPMG network of independent

firms are affiliated with KPMG International

Executive summary

ldquoTinformcomm he global

ation and unications

technology industry accounts for approximately two percent of global carbon dioxide emissions a figure equival

rdquoent to

aviation

Source Gartner Inc IT Vendors Service Providers and Users can Lighte n ITrsquo s Environmental Footprint Simon Mingay 5 December 2007

This two percent figure relates to the entire IT lifecycle ndashdesign manufacture distribution transport and use This includes business government and consumer use but no consumer electronics other than cell phones and PCs

Sustainable IT

3

bull Sustainable IT is essential to the success of your business it is no longer an ldquoifrdquo it is now a ldquowhenrdquo and ldquohow businesses approach the economic environmental and social elements to support business survivalrdquo

bull Accounting and financial reporting standards have taken centuries to evolve to their current state While voluntary reporting and global guidelines around sustainability reporting already exist KPMG predicts that technologists will be asked by the business to support comprehensive sustainability environmental emissions and carbonshyuse reporting covering the organization and its value chain within five years to the same level of sophistication that exists today for financial information

bull Forward thinking organizations around the world are already selfshydisclosing sustainability reports and making sustainability related commitments to the market place Certain countries and jurisdictions have mandated laws and imposed regulations around various discrete aspects of sustainable IT This is presently in a formative state and mainly focused on eWaste and the disposal of hazardous materials in technology hardware Organizations may need to comply with increasing demands for environmental reporting based on new regulations However the ability to shape the rules in the formative stages may be just as important as compliance

bull There are simple straightforward actions that may be taken to commence sustainable IT behavior immediately These include power management tools considered printpaper management and the owners of equipment taking responsibility for the costs of cooling and consumption

bull A medium to longshyterm sustainable IT strategy should be strongly linked to the overall business strategy as well as the organizationsrsquo overall sustainability objectives There are many options to consider regarding capital expenditure around data center relocation and redesign storage considerations virtualization innovative hardware and sustainability awareness training All of these should be considered with a view to economic environmental and social impacts

bull Sustainable IT is a tool for competitive advantage It may be used to decrease overall operational costs and protect against shocks in the commodity or energy markets It may also allow a business to be seen as a preferred supplier and help to attract and retain skilled staff particularly in a tight labor market and the associated ldquowar for talentrdquo

copy 2008 KPMG International KPMG International is a Swiss cooperative Member firms of the KPMG network of independent


Foreword

Sustainable IT has emerged as a key factor affecting businesses today Executives are under pressure to lead the adoption of sustainable business practices


The current environment has seen energy costs rising at an alarming rate It is important to consider the ever present operational expenditure pressures on IT within many businesses and that relationship with power use especially in the current economic climate Much of this power usage is concentrated in data center environments for the provision of power and cooling for IT systems These cost pressures will be driving energy saving initiatives with the additional benefits of a reduction in environmental impact

Executives should understand what sustainable IT means for their business and what they should be doing about it We believe that with rising energy costs and a strong global focus on climate change businesses should consider action to improve their corporate social standing reduce energy waste reduce consumption and help to preserve the environment In doing so businesses stand to achieve a variety of internal and external benefits including potential cost savings

Sustainable IT has spawned a number of new industries technologies and vendor solutions Innovative

technology solutions have the ability to reduce energy costs and emissions Management should be aware of these alternatives and decide whether to embrace leading edge technologies potentially generating cost efficiencies and competitive advantages for their business and clients or wait for sustainable IT to become a businessshyasshyusual activity

Sustainable IT is a source of risk as well as opportunity it covers important topics that need to be understood and managed IT may be a significant part of the problem but may also be a part of the solution There is an opportunity for both business and IT leaders to collaborate to deliver on sustainability objectives

Key drivers for action are

bull Cost optimization

bull Rising energy costs and limited electricity supply

bull Regulations standards and compliance

bull Corporate citizenship and reputation

The challenge for executives is to consider the economic social and environmental implications to achieve a balanced outcome for their organization

I hope this paper provides insight and provokes thought on the topic of sustainable IT

Egidio Zarrella

Global Partner in Charge IT Advisory



4

Introduction

82 out of 10 people prefer environmentally

responsible companies Source Ethical Corporation

There is a great deal of scientific research and commentary around the impacts of climate change and global warming It is now widely accepted that the manner in which we live and conduct business is having a harmful impact on our environment and climate

Sustainable IT is about the economically environmentally and socially responsible practices around information technology The purpose of this paper is to inform business leaders on the critical importance of these IT related issues

bull Economic ndash in the form of cost efficiencies and competitive advantage

bull Environmental ndash in the form of energy waste and consumption efficiencies

bull Social ndash in the form of the evolution of sustainability reporting and the development of sustainable organization culture

For businesses to remain competitive and profitable they should consider their approach to sustainable IT in the context of their overall business strategy Otherwise they face the risk of rising operational costs and a disadvantage when compared to their competitors Competitive sustainable IT may be used to create financial value and generate operational savings

Similar to the way compliance risk and issues such as security have become essential considerations to any organization in recent times sustainable IT will evolve from a marginal business trend to businessshyasshyusual activity in the next few years

This paper notes some short medium and longshyterm sustainability strategies that can help measure manage and limit the environmental impact of an organizationrsquos IT

The evolution of accounting and financial reporting standards has taken hundreds of years to evolve to the current state Reporting around an organizationrsquos sustainability impact is currently limited however KPMG expects this to change quickly Certain countries and jurisdictions have enacted laws and imposed regulations around various discrete aspects of sustainable reporting a trend that is sure to take hold globally as climate change issues come to the fore

Corporate citizenship recognizes that an organization does not and should not act in isolation of the communities within which it operates Globally organizations are recognizing the widespread benefits of a more concerted approach harmonizing their organizational objectives and the achievement of important economic environmental and social responsibilities Striving to become a good corporate citizen is now considered a responsible and legitimate business objective as well as preferred practice with the identification of economic gains and for some organizations it is now a main priority



5

An effective approach to sustainable IT may favorably influence the external and internal perception of an organization

Potential internal benefits Potential external benefits

bull Enhanced ability to attract and retain skilled resources

bull Enhanced ability to attract customers and investors

bull Improved cost efficiency of operations

bull Enhanced ability to attract skilled resources and strategic alliances

bull Economic benefits of a long term sustainable IT strategy

bull Enhanced public image and reputation

bull Decreased operational costs

bull Protection against energy price shocks

bull Government incentives utility company rebates

bull Positioned well to meet potential regulatory compliance

A longshyterm sustainable IT strategy should be strongly linked to the overall business strategy and the organizations overall sustainability objectives with a view to the economic environmental and social considerations

Source KPMG International 2008

Sustainable IT should be considered a business imperative it can be a competitive differentiator and the potential benefits reach beyond the environment and society into the economic realm (with Extended Producer Responsibility there may even be legal ramifications) Business may soon be judged on their sustainability credentials by legislators shareholders employees and customers IT has a key and significant role to play as these changes to business practices take place


cooperative Member firms of the KPMG network of independent 6 firms are affiliated with KPMG International

Key drivers

Sustainable IT concerns originated from the realization that data centers consumed significant amounts of energy and raised awareness of the environmental impacts of the endshytoshyend lifecycle effects of technology hardware This includes the manufacture transport use and disposal of computer equipment more specifically the growing volumes of eWaste arising from the rapid obsolescence of computer equipment

Some of the key drivers of sustainable IT include

Cost optimization Capital expenditure and operational expenditure are key cost measures that should be considered when looking at IT costs If operational efficiency can be improved this may result in reduced operational expenditure

Rising energy costs and limited electricity supply It is recognized that IT consumes significant amounts of energy The current volatility in the cost of energy and resultant exposure to rising energy costs may lead many organizations to reconsider the energy efficiency around the use of technology Compounding this issue in many parts of the world even today the current electricity grid cannot support the anticipated growth in technologyshyrelated consumption

Regulations standards and compliance There is presently limited legislation and regulation around the reporting of sustainability As this is presently in a formative state organizations are in a position to influence and direct policy and regulation As time passes and environmental monitoring is determined formalized and enforced regular reporting may be expected

Corporate citizenship and reputation Organizations are now judged on their sustainability behavior This includes organizations making purchasing decisions based on environmental awareness as well as cultural changes within the organization to satisfy employeersquos demands for more sustainable activity Organizations are becoming more conscious of the perception of their behavior by internal and external stakeholders



7

Power from the grid

An important factor to consider is power provision from the grid In the UK and South Africa there are real concerns over the availability of power for current and future data center requirements There have been some press reports that the main utility provider in London is turning down or postponing requests for increased capacity from data centers as it plans to meet the requirements of the 2012 Olympics More so than ever before it is critical to the sustainability of a businessrsquo IT environment that the supply chain is considered consulted and communicated with during the planning and implementation of strategy IT managers need to closely align demand management practices with those of the data center facility management team and accordingly its supply chain including power provision It is clear that the provision of some of these services requires planning consultation and consent several years in advance of implementation and this process does not seem to be running smoothly among all stakeholders



Sustainable IT

9

Competitive advantage

Procurement and preferred suppliers With the recent focus on procurement processes many large organizations are streamlining their supply chains by signing preferred provider contracts with a short list of vendors In this vendor selection process sustainability commitments are appearing on the short list of requirements which may lead to a competitive advantage for those vendors capable of proving their sustainability commitments

Many organizations have made commitments to the market place about their sustainability practices as such the impact of purchasing decisions on these commitments should be considered

Clear sustainability objectives and a system by which to measure manage and limit environmental impacts as well as an ability to articulate these should help to distinguish an organization from its competitors

Operational cost reduction Early data centers differed greatly between each other around security availability capacity and redundancy lacking the accepted standard service levels maintained today Over the years the services provided by data centers have been commoditized which means there is now very little to differentiate one from another Operational cost efficiency and resultant cost reduction are good ways for a data center to try to differentiate itself and provide itself with a competitive advantage in the market place

Lowering operational costs is a fundamental business requirement when seeking to identify competitive advantages

Many surveys have indicated that server utilization rates can be very low as low as 10 to 15 percent in an average data center Therefore it is important to consider an assessment of server utilization and plan capacity and storage utilization accordingly

It is interesting to note that many data centers operating today were designed and implemented during the ldquodot comrdquo explosion where mainstream technology drove the implementation of multiple physical server instances and the main cost drivers were around space

Over recent years there has been as increase in awareness of the business criticality of IT systems and demands for facility resilience becoming more widespread This had previously been the domain of the financial sector Companies are demanding facilities that are highly available with resilience designed into the power and cooling systems right through to the networks and servers This trend has been coupled with advances in technology that have enabled the introduction of blade server environments more computing power in a smaller footprint

This move to ldquohigh density computingrdquo requires data center facilities that can provide power and cooling capacity upwards of 10kW per rack where the typical provision is around 3kW (Source Steve Salmon KPMG in the UK) The upward trends in both resilience and power requirements from a data center facility have led to a critical shortage of suitable environments for client IT



It is not simply a case of upgrading the power and cooling capacity at an existing facility as this will not address the resilience requirements As a result companies are having to compromise while waiting for a new breed of Tier 3 and Tier 4 availability data centers to come on line with high power and cooling densities designed in from the outset (Tiering scale provided by the Uptime Institute)

Until recently the IT industry has concentrated on improving processing power and storage capacity of their products whilst all but ignoring the power consumption of these devices Research has shown that up to oneshythird of capacity is idle and power consumption and power leakage alongside the cost of ensuring that the data center is kept cool ndash are all environmental impacts of technology

Data centers have immense power requirements in order to keep their systems running On top of that they also have to keep an equivalent number of environmental systems running to keep the data center operationally viable On top of these power requirements there are redundancy requirements in the form of back up systems and back up uninterruptible power supply (UPS) units in case the primary ones fail

A new or retrofitted data center may incorporate one or more of the following elements

bull Energy efficient hardware with greater processing power

bull Intelligent load sharing servers or blade server technology to allow for growth

bull Redesign of hotcold aisle air flow

bull Implementation of focused and better utilized environmental control systems

bull Consolidation and virtualization

bull Considered requirements around processing power storage space and the type of storage device

More efficient hardware with greater processing power may yield some of the following benefits when requirements for storage and processing are held constant By applying the multiplier effect over time there may be significant operational cost savings from

bull Reduced environmental control hardware and power requirements

bull Reduced power consumption and energy savings from computer hardware

bull More efficient hardware may have a longer operating life reducing the need to replace hardware as often

bull Less heat generated resulting in reduced cooling requirements

bull Less storage servers required back up equipment required cabling and support infrastructure

bull Faster server response time resulting in greater productivity from employees

bull Fewer full time employees required to operate monitor and maintain servers

bull Decreased space consumption

Server energy requirements have doubled in the last five years and will continue to rise exponentially in the years to come Source AMD

Data centers consumed 06 percent of the worldrsquos electricity in 2000 and 1 percent in 2005 Source McKinsey and Uptime Institute

A modern data center is basically the same as a huge refrigerator full of ovens running at full blast with their doors open Source Bob Hayward KPMG in Australia



10

Sustainable IT

Sustainable IT approach

Environmental impact by industry The illustration below demonstrates the proportion of environmental impact contributed by the information technology part of the business the operational part of the business and the end product per industry This illustration should be used as an indicative guide to help focus your sustainable IT strategy

As the illustration shows the IT department is not always the greatest contributor of carbon emissions within the organization Service organizations have the most significant environmental IT impacts relative to their total environmental footprint Energy industry organizations may find that it may be beneficial to focus their sustainable IT efforts around helping to decrease the environmental impacts resulting from their business operations Similarly the manufacturing industry may find it more beneficial to use technology to help them decrease the environmental impacts resulting from the use of their final productservice

Source Gartner Inc Defining the Environmental Value of IT Simon Mingay and Andrea Di Maio 15 September 2007 Figure 1Three Degrees of ITrsquos Environmental Impact by Industry Sector

There is a wider perspective on sustainable IT which goes beyond data centers and end user computing this is to consider the whole endshytoshyend lifecycle of IT equipment from manufacture transport use power requirements as well as endshyofshylife disposal An aspect of sustainable IT not addressed by this paper is around the use of technology to affect the sustainability of an organizationrsquos operational processes and its final product



11

Short medium and long term fixes In order to determine an organizationrsquos sustainable IT strategy the overall business strategy should be consulted and the organizationrsquos approach to sustainability should be considered Environmental reporting commitments around measurement scorecards dash boards key performance indicators trading systems and commitments to Carbon Accounting should also be considered




12

d

w

Market place

Identifying and implementing technology solutions to re Enterprise business processe

Suppliers Partners C

Organization

Identifying and implementing technology solutions to reduce environm Enterprise business processes

IT department

Strategy Governance amp Organization Risk Ma

Vision Targets Desired Outcomes Driving Forces Motivation Strategic Plan Participation in Trading Schemes Use of Renewable Energy Offsets

Accountabilities Decision Rights Policies Procedures Incentives and

Rewards Budget

Enviro Indepen Validation

Identifying and Implementing Solutions to Reduce Environmental

Short Term Medium Term

Power management features Print management Print use policies

Disposal of consumables Ownership of energy costs

Employee Awareness Baseline measures

Flex TimeTelecommute

Reconfigure data centre equipment Virtualization of servers Virtualization of storage

Thin client devices Selection of servers Storage optimisation

Consolidation Rationalization

Loca D

Specificatio Redu

Softsw Rene

Ca Mu

Processes and Policies

Procurement Project Management

Facilities Management Business Continuity

Capacity Management DisposalWaste Management

Resources

Printers Office Systems Data Centre Software Networks Telecommunications


There are many things that may be done quickly and easily without significant infrastructure changes to move your organization towards sustainable IT However if significant hardware investments are being considered hardware replacement lifecycle end dates coming due or significant organizational changes are being considered ndash it may be worth considering some more strategic sustainable IT changes



13

educe environmental impact s Channel Customers

ental impact

anagement amp Controls

nmental Risk Profiling dent Assessment Audit n Compliance Quality of

Reporting

Environmental reporting

Instrumentation Measurement

Scorecards

Dashboards

Key Performance Indicators

Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing

Corporate Social Responsibility (CSR)

Triple Bottom Line (TBL)

Economic Social Governance (ESG)

Transparency

Impact

Long Term

ation of data centre(s) Design of facilities on of data centre equipment uce layers in network itch and softphone (IP) wable energy sources apacityshyonshydemand ultishycore processors

Human Resources Measurement and

Reporting

Servers Storage

m

w



14

Legislation mandating Green IT policies is maturing and is adopted at disparate rates across countries Source Springboard Research

Sustainability reporting legislation and regulations

Reporting In order to achieve sustainability objectives shy measurements are invaluable As the old adage goes ldquoIf you canrsquot measure it you canrsquot manage itrdquo Relevant reliable and detailed data is essential and IT has a role to play in facilitating this

As described in KPMG Australiarsquos Sustainability Report (2008) internal management reporting creates focus and direction to guide an organizationrsquos approach to sustainability External reporting sharpens the focus on performance and helps companies appreciate how sustainability initiatives can create value and enhance their investment credibility Reporting that is validated by independent assurance reinforces this process

Stakeholders are increasingly interested in understanding the approach and performance of companies in managing sustainability aspects of their activities

At this stage there is no single universally accepted definition of sustainability reporting Despite this there is a growing need for detailed and continuous nonshyfinancial data collection ndash this information needs to be credible and able to stand up to intense scrutiny by customers employees shareholders tax authorities governments and regulatory authorities

Legislation and regulations At present legislation and regulations around sustainable IT largely discuss the manufacture transport and destruction of equipment and the associated hazardous materials The next steps should be around the evolution of technology to support sustainability reporting requirements

The current trend is selfshyreporting until regulators implement reporting standards and requirements Industry bodies and organizations will gather to influence the metrics reporting formats and comparisons used

There are two voluntary frameworks that are widely referred to in sustainability reporting the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) At the innovation stage there may be the ability to influence and direct policy and regulation



15

Big business in sustainability

There is a business imperative behind sustainable IT money to be saved and money to be made

Some of the main categories of revenue potential around sustainable IT include

bull Innovation and design

bull The measurement and reporting as well as thirdshyparty checking of nonshyfinancial metrics and benchmarking

bull Advice on how to manage sustainability trade Carbon Credits and solutions for Carbon Accounting



16

Innovation and design Innovation and design become critical elements as organizations seek to gain a competitive advantage in the use of technology Similar to how the innovation from copper cabling to fiber optic cabling transformed the telecommunications industry innovation and design can transform the future of sustainable IT and industry Innovation and design may address the following

bull Innovative sustainable IT solutions

bull Clean fuels and alternate energy sources

bull eWaste management

bull Examining the full lifeshycycle of technology products and services to decrease the environmental impact

bull Energy service companies (ESCOrsquos) are in the business of helping businesses trim their energy bills

bull Combined heat processing (CHP) ndash redirecting heat generated from data centers to heat office space water andor swimming pools

Sustainable IT



17

Metrics As organizations seek to report on their commitments or comply with required reporting they may require assistance around the metrics Metrics may address the following

bull Tools and technology to help organizations track and manage the environmental impact of technology

bull Environmental impact assessment

bull Benchmarking

bull Certification

bull Analysis around power consumption and thermal footprint

bull Sustainability reporting

Advice As organizations seek to identify their appetite for sustainability they may need assistance with strategies implementation and advice Advice may address the following

bull Architecture and design

bull Manufacturing and materials composition

bull Sustainable IT strategy

bull Vendors and relationships

bull Rightshysizing technology



18

Concluding remarks

Executives have a business imperative to consider the competitive advantage around sustainable IT Further it is also important to consider the regulatory future in this regard

Technology is an integral part of business To remain competitive businesses should consider their technology investments with a view to decreasing operating costs to enhance their competitive advantage There is now pressure being placed on Executives to ensure their business technology is managed in an environmentally friendly manner This responsibility extends through the whole ICT lifecycle to include manufacture transport use and disposal

The cost of running an IT department may also be influenced greatly by the continued rise in energy costs and in many locations the lack of supply of energy to service technology requirements IT may often be the heaviest consumer of energy within a company and as new technology demands higher volumes of power IT management is having to come up with smarter more energy efficient strategies for running IT operations There will be longshyterm operational cost savings that may be realized with sustainable IT planning

Ultimately sustainable IT is a tool by which to decrease technology related operating costs This may become a competitive advantage both from a financial perspective as well as a corporate responsibilitybranding perspective



19

Sustainable IT initiatives may allow an organization to be seen as a preferred supplier and increasingly organizations are required to prove their sustainability credentials when tendering for procurement contracts

Accounting and financial reporting has taken hundreds of years to evolve KPMG predicts that within five years technologists will be asked to support comprehensive sustainability environmental emissions and carbonshyuse reporting covering the organization and its value chain

Regulation and legislation are in formative stages forward thinking organizations may contribute to shaping and influencing the rules and regulations

The main motivation for sustainable IT should be around economics and governance This involves the alignment with and capitalizing on stakeholder values It is also important to try to preshyempt stakeholder action to sustain the value chain and capture operational efficiencies



20

Top Five Recommendations to jumpshystart Sustainable IT

1 Initiate discussions between IT and building facilities management ndash to discuss and understand technology and energy use

2Implement power management features (turning equipment off when not in use auto power down)



21

3Implement considered print management (consolidate locations of printers and set to double side black and white)

4Implement considered disposal of consumables (recycle safe disposal donation corporate take back programs landfill cluster servers refurbishment ndash consider waste generated from supply chain manufacturing of component andor final product)

5 Implement the use of videoaudio conferencing



22

KPMGrsquos Global Green Initiative

We are committed to reducing our member firmsrsquo combined carbon footprint by 25 percent by the year 2010 from a 2007 baseline through emission reduction schemes and the use of renewable energy in our member firms

Our three commitments

bull Measuring reducing and reporting KPMGrsquos carbon footprint

bull Supporting environmental projects to help address the challenges of climate change within our wider commitment to our communities

bull Working with our employees suppliers and clients to help them improve their climate change impacts



23

Glossary

n l l n t g f d t raa h o n or o n et g i ub so cu r u a or n e a o t e acb t l n m dn r l b u e al a eu a b o r ro eer t t o y me b h t

a e t s a n ts ) s t e o tr o

C Na u u ebe he r tl ee r qf o s

b a i e fe z e hr ( r a t c w fs o

g tto c

n un d tsi i o if r of n p r

o o ti e et l ra bo z a yli en rr l aa a ep g s r n noshy u a

e e n eh a rt ir uhe qu tr i eu w rst n rk ou e c uF o tt s



Emissions tradingan administrative approach used to control pollution by providing economic incentives for achieving reductions in the emission of pollutants sometimes called cap and trade

Downcycling is the recycling

of material into

a material of

lesser quality

T noiI ta mn yl rla o

e t fn n ye i

e m g oyn ll or o dr n

Gi n hv e cn ir ee f t

Carbon offset financial instrument representing a reduction in greenhouse gas emissions

Ky o t o p r o t o c o l a protocol to the international Framework Convention on Climate Change with the objective of reducing greenhouse gases that cause climate change

Carbon footprinta measure of the impact human activities have on the environment in terms of the greenhouse gases produced measured in units of carbon dioxide

n l o la t ac uo i r ts a ry e ivi h pt p p a ea l pe ez il c tg lr ui n ui ol s msa e r s

u a agn t i ng t ou ces

r ni p iti ka m cV n

m o uc f resour

g g e y t rs o en n r ei g i n u n vy h dz si n o tt s o

T i i ss r i et s nc de t I i e

h s ew

na i e ii c v t vp d v eg v o o

n o a oi ae r r e ra o h r oR r c a p p p t t h b p fGreen

wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme

electricity rather than making the energy consumption more efficient It is cheaper to not consume in the first place

Corporate social responsibility (CSR)Corporate citizenship concept where organizations consider the interests of society by taking responsibility for theimpact of their activities on customers suppliersemployees shareholders communities and otherstakeholders as well as the environment

(glocircsə-rē glŏsə-)

Extended Producer Responsibilityis a strategy designed to promote the integration of environmental costs associated with products throughout their life cycles into the market price of the products

Sustainable ITeconomically environmentally andsocially responsible informationtechnology

Renewable energy credits tradable environmental commodities proof that 1 megawatt shyhour of electricity was generated from an eligible renewable energy resource

n g n o e e n a c

o n a t s h i i

t l )i i u tt n bd ya b u ma b e on a t pi n se n ce

m l n o si e s o rt yi ti i pe r

m a t s ma l az n o es ai m

t ni vo on e i ed r r t ir a c i i g t eo n v sg a ce f o d

h f f mir n on r dt o i o c o e o p i (

e u ol wn fe ac w se

t a tr a eo n n t n ti e y yc dd p

Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

Egidio Zarrella Global Partner in Charge IT Advisory

KPMG in Australia +61 2 9335 7590 ezarrellakpmgcomau

Kumar Parakala Global COO IT Advisory Asia Pacific region ndash Sustainable IT

KPMG in Australia +61 2 9335 7820 kparakalakpmgcomau

Brad Fisher Americas region ndash Sustainable IT

KPMG in the US +1 212 909 5498 bfisherkpmgcom

Keith Bannister Europe region ndash Sustainable IT

KPMG in the UK +44 20 7311 6558 keithbannisterkpmgcouk

Bob Hayward Australia region ndash Sustainable IT

KPMG in Australia +61 7 3225 6853 bhaywardkpmgcomau

Frank Rizzo Africa region ndash Sustainable IT

KPMG in South Africa +27 11 647 7388 frankrizzokpmgcoza

This paper could not have been written without the valuable contributions of

Edge Zarrella Kumar Parakala Andrea Wang Bob Hayward Ebrahim Khan Gabriel DrsquoEustachio Brad Fisher Frank Rizzo Keith Bannister Greg Corlis Lance Morton Matt Bishop Steve Chase Steve Salmon Nasreen Patel Michelle Hernandez Jai Govind Hanife Ymer Nick Benson David Ryan Michael Mattern Margaret Smylie Shaun Hodierne Bill Downing Fiona RossishyMel Claire Needham Gene Ozgar Dominique Brack and Philip Sallick



26

shy shy

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity Although we endeavour to provide accurate and timely information there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future No one should act on such information without appropriate professional advice after a thorough examination of the particular situation

The views and opinions expressed herein are those of the authors and interviewees and do not necessarily represent the views and opinions of KPMG International or KPMG member firms

copy 2008 KPMG International KPMG International is a Swiss cooperative Member firms of the KPMG network of independent firms are affiliated with KPMG International KPMG International provides no client services No member firms has any authority to obligate or bind KPMG International or any other member firm vis agrave vis third parties nor does KPMG International have any such authority to obligate or bind any member firm All rights reserved

KPMG and the KPMG logo are registered trademarks of KPMG International

August 2008

kpmgcom

About this paper The purpose of this paper is to provide a practical discussion about sustainable information technology (IT) and key ideas in the industry at present

KPMGrsquos IT Advisory practice recognize the significant amount of literature on sustainability and sustainable IT available in the public domain This paper seeks to provide business people with a primer on what sustainable IT means to them and their business the directions it may follow and actions they may consider to stay current

Terminology For the purposes of this paper we have chosen to use the term ldquosustainable ITrdquo In the Information Communications and Technology (ICT) industry this is used interchangeably with ldquogreen ITrdquo KPMG believes that ldquogreen ITrdquo is a restrictive term that limits the assessment of information technology to environmental factors whereas ldquosustainable ITrdquo incorporates the economic environmental and social factors around technology and innovation

Continued research This paper contributes to the collection of KPMG publications that address issues around climate change and sustainability It builds on KPMGrsquos technology thought leadership position and we invite you to contribute to further research by contacting one of our firmsrsquo professionals listed in this document



1

Contents

Executive summary 3

Foreword 4

Introduction 5

Key drivers 7







Glossary 24

Contacts 25

Sustainable IT



Executive summary




rdquoent to

aviation



Sustainable IT

3









Foreword















Egidio Zarrella




4

Introduction















5


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Contents

Executive summary 3

Foreword 4

Introduction 5

Key drivers 7







Glossary 24

Contacts 25

Sustainable IT



Executive summary




rdquoent to

aviation



Sustainable IT

3









Foreword















Egidio Zarrella




4

Introduction















5


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Executive summary




rdquoent to

aviation



Sustainable IT

3









Foreword















Egidio Zarrella




4

Introduction















5


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Foreword















Egidio Zarrella




4

Introduction















5


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Introduction















5


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom


















Key drivers









7

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Power from the grid




Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

aemov

shying

w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Sustainable IT

9





































10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

g of r

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w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

























10

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









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h s ew



wash

t

Nhe co

encept

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aed t

to co

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sme







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o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

Sustainable IT








11





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

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w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom





12

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

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aemov

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w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom

d

w

Market place



Organization


IT department




Rewards Budget











Loca D

Specificatio Redu

Softsw Rene

Ca Mu





Resources






13


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









m o uc f resour



h s ew



wash

t

Nhe co

encept

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aemov

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w the ne

aed t

to co

tnsu

sme







n g n o e e n a c

o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom


ental impact



Reporting



Scorecards

Dashboards


Trading Systems

Scenarios

Carbon accounting

ISOshy14001 EMS


Regulatory filing




Transparency

Impact

Long Term



Reporting

Servers Storage

m

w



14












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

a material of

lesser quality


e t fn n ye i









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h s ew



wash

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encept

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sme







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o n a t s h i i








Weee b lv r ca

i e oc c o

t ke nr ei ss

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tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom












15









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








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Weee b lv r ca

i e oc c o

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25

Contacts

















26

shy shy





August 2008

kpmgcom









16








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

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encept

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Weee b lv r ca

i e oc c o

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25

Contacts

















26

shy shy





August 2008

kpmgcom








Sustainable IT



17




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








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Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

tl t ino or r ge



25

Contacts

















26

shy shy





August 2008

kpmgcom




bull Benchmarking

bull Certification











18

Concluding remarks







19







20






21






22









23

Glossary





g tto c








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Weee b lv r ca

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25

Contacts

















26

shy shy





August 2008

kpmgcom

Concluding remarks







19







20






21






22









23

Glossary





g tto c








of material into

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Weee b lv r ca

i e oc c o

t ke nr ei ss

c n i sa

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25

Contacts

















26

shy shy





August 2008

kpmgcom







20






21






22









23

Glossary





g tto c








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Weee b lv r ca

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25

Contacts

















26

shy shy





August 2008

kpmgcom






21






22









23

Glossary





g tto c








of material into

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Weee b lv r ca

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25

Contacts

















26

shy shy





August 2008

kpmgcom






22









23

Glossary





g tto c








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25

Contacts

















26

shy shy





August 2008

kpmgcom









23

Glossary





g tto c








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Weee b lv r ca

i e oc c o

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25

Contacts

















26

shy shy





August 2008

kpmgcom

Glossary





g tto c








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Weee b lv r ca

i e oc c o

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25

Contacts

















26

shy shy





August 2008

kpmgcom



25

Contacts

















26

shy shy





August 2008

kpmgcom











26

shy shy





August 2008

kpmgcom

shy shy





August 2008

kpmgcom

sustainable it kpmg publication d. brack co-author

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