[This post first appeared on a Climate Savers Computing Initiative site. I'll skip the general intro to the greening topic from the original...]

...Five areas of the business are ripe for quick paybacks from green thinking: facilities (heating, cooling and lighting), fleet and distribution, waste, telework, and IT. Let's look at IT specifically and why companies are still going green.

When industry analyst Gartner Group estimated that information and communications technology was responsible for 2 percent of global carbon emissions — equal to the entire aviation industry — most people outside the IT world (and many inside it) were shocked. At the core of these numbers lies the shocking inefficiency of data centers.

Of all the energy going into a modern server farm, IBM estimates, less than 4 percent actually processes something you know, what the room was built for. The other 96 percent of electrons are lost at three stages: (1) cooling the room itself, (2) cooling the stacks or "blades" of servers, and (3) keeping idle machines humming. Most of this energy is wasted and costs real money. In recent years, the share of a data center's variable cost going to energy has grown fast. What was once a tiny part of the budget is now 40 or 50 percent of the operating cost. Over the life of a server, you can easily spend twice as much on electricity as on the capital cost of the server itself.

In response, the competition has been fierce to tackle those three stages of the problem and find ways to slash the energy budget. First, look at the design of the data center itself. One of my favorite "head-slapper" strategies in all of the greening movement is the use of outside air economization — that is, effectively opening the door and letting hot air out rather than cooling it — which Intel estimates can save $3 million in a 10 mega-watt data center.

Second, companies are looking at the server hardware. They're shutting down orphaned systems — Sun discovered during its "Bring Out Your Dead" day that 4,100 of its servers were unused, but plugged in sucking energy. But sometimes, as the Wall Street Journal suggested earlier this year, "the smartest thing to do is invest in new, more efficient systems." One company, Fair Isaac Corporation, bought new, more efficient servers and cut the total number in its data processing center in half. This requires some capital expenditure, but the paybacks can be fast.

Third, software companies are vying to help handle server loads and increase the average 20 percent utilization rate (meaning, 4 of 5 servers are basically idle, waiting for peak loads). The buzzword is virtualization, or using software to create pseudoservers that run in parallel on the same physical server and use all that idle processing power.

For companies using all of these tactics, such as Microsoft, newer datacenters can use 50 percent less energy than ones built just a few years ago. And that's just the large IT systems. Many organizations are now utilizing software to control all the PCs sitting on desks, putting them to sleep overnight and often saving millions. None of this pressure to cut back on IT energy and cost is going away. Forrester reported in January 2009 that 60 percent of IT managers are using green criteria in their procurement decisions and that even in tight times more managers are accelerating green IT efforts than slowing them down.

But what's the most powerful thing you can do to reduce IT energy use? Every time I speak to tech companies or sustainability execs, I hear one theme over and over: The people who create the energy use don't have a clue how much it's costing. The prescription: Add the power bill to the CIO's budget.

Contrary to the popular misconception that going green is expensive, in a very large range of cases, environmental initiatives don't raise costs, they lower them — and fast. In operational areas such as facilities (heating, cooling, lighting), fleet, IT, and waste, leading companies continue to find large savings in shockingly simple actions, such as changing lighting or using outside air to cool a data center.

But even for the most head-slappingly obvious changes with super-fast paybacks, companies still need to find the capital to buy the new bulbs, optimize the HVAC system, or add auxiliary power units (APUs) to trucks. And even if one sees these initiatives as investments, not costs (which is the right way to look at it), there will still be competition for dollars. During a recession — heck, at any time — it's normal to struggle to get funds for even worthy projects. So what to do?

A few leading companies have hit on one incredibly simple solution to this problem — set aside funds for green priorities. I don't mean coming up with a new pool of money; just assign a percentage of the existing capital expenditure budget to green priorities.

In 2008, to find hidden gems of savings, DuPont set aside 1% of capital expenditures solely for energy-saving ideas. With $50MM of spending, the company found $50MM of savings per year — a one-year payback that keeps on giving. All projects still met the corporate hurdle rate, so there was no special dispensation besides making the money available for worthy initiatives managers had overlooked. Building products maker Owens Corning goes even further, dedicating 10% of capex to energy projects. This is a tool nearly anyone can use. Set aside the funds for green and you'll unleash a wave of creativity and short paybacks.

So if there are so many quick, high-ROI projects sitting around, why aren't companies jumping on them? Two big reasons. First, energy efficiency just hasn't seemed sexy. Dawn Rittenhouse, DuPont's director of sustainable development, told me, "If business units can invest in growth or energy efficiency projects, it's more glamorous to go after growth." But in tight times, saving money starts to feel a lot more exciting, doesn't it?

The second reason is the classic problem of the urgent versus the important. Most capital expenditures go to fix things that are already broken. But as Frank O'Brien-Bernini, Owens Corning's chief sustainability officer, puts it, "It's really about redefining what 'broken' means." Think about it: a process that wastes energy may not feel broken with oil at $40, or even $80, a barrel. But it may look like a money-eating disaster at $200 a barrel. In essence, when it comes to energy and resource efficiency, all companies are broken.

Of course reserving some funds could meet resistance. One of my clients pointed out that their capex budget is not one pool, but really a bunch of sub-budgets for different groups. A green set-aside would have to draw money from somebody's hard-fought budget. But DuPont only allocated 1% to great effect. So it doesn't necessarily take a giant land grab to make this operational and cultural shift happen.

So when people say you don't have the money to invest in green, show them that you do. The reality is that unless you're in liquidation, you have a capex budget, even if it shrank this year. You're spending money on things all the time; it's simply an issue of where you place your bets.

Take a piece of what you're already spending, point it in the right direction, and you will find enormous green savings to help survive these (still) hard times — and invest in the future.

[This post first appeared on Andrew's blog on Harvard Business Online]

Though corporate green efforts have grown exponentially in the last decade, most initiatives fall woefully short of what's necessary to meet the enormous sustainability challenges we face — from climate change to water shortages to poverty and social equity.

That's why it's so refreshing to see one large company, Sony, set a goal of zero environmental footprint by 2050. The company has dubbed this mission its "Road to Zero."

Before diving into how Sony has approached its target-setting exercise, here's a quick review of why "zero" is an idea whose time has come: In a resource and carbon-constrained world, the best scientists tell us, we need to cut emissions of greenhouse gases by 80% by mid-century (it's no coincidence that Sony picked 2050). For other pressing issues, society, governments, and the cold realities of science will demand even more dramatic changes. The word "zero" — as in zero waste, zero net water use, zero toxicity, zero child labor, zero fatalities, and zero carbon — will by necessity become a core part of business strategy and operations. (One large consumer products company is in the process of setting sustainability targets, which it calls the "Eight Zeros.")

Only one of the green-themed zeros has had broad appeal thus far in the business community — the quest to send no waste to landfills. Most people shorthand this pursuit to "zero waste" even though it's not really zero (but everything is being recycled or, much less preferably, incinerated).

Subaru demonstrated it could be done in 2004 in its Lafayette, Indiana plant (saving millions of dollars in the process), and GM has recently achieved the goal at 62 plants across the world. These are impressive feats, but we'll need even greater innovation to get to the other zeros.

Yet outside of a few usual suspects, such as perennial sustainability leader Interface Flooring or Wal-Mart's goal of using 100% renewable energy, there are nearly no companies (or countries for that matter) that have outlined a path to get to zero environmental footprint.

This spring, however, Sony made the leap. If you spend some time at the Sony site dedicated to the Road to Zero, you get the sense that executives have clearly thought this through. They seem to realize that a big goal, just hanging out there on its own, would be far too daunting, nebulous, and not very actionable. So The Road to Zero works, as I see it, because of two fundamental components.

First, the company broke up the goal into pieces, separating the discussion into four "perspectives" and six "lifecycle" stages. Sony has phrased the perspectives as ongoing actions:

- Curbing climate change,
- Conserving resources (which covers material use, waste, recycling, and water),
- Promoting biodiversity, and
- Controlling chemical substances.

The perspectives hew closely to the biggest environmental challenges we face as a species: climate change and energy, water, biodiversity, and chemicals and toxics. So while I might nit-pick and suggest that "conserving resources" is a bit too broad to be actionable, it's a good list.

The six lifecycle stages cover:

- Research and development,
- Product planning and design,
- Procurement,
- Business operations,
- Distribution, and
- Take-back and recycling.

Sony indicates that it will need to find a path to zero in each area, using different tactics and approaches. In distribution, for example, Sony describes a broad set of strategies including smaller packaging, improved loading efficiency, and shifting to more rail and water transport.

The Road to Zero site describes these all in very general terms, which reflect the reality that nobody really knows exactly how to get to zero. But what's important is that Sony is pairing this directional exercise with some down-and-dirty tactical goals as well. So...

Second, Sony set interim targets dubbed "Green Management 2015," which follow and build on its now-completed "Green Management 2010." This step is critical and the goals are both specific (reduce greenhouse gases 30% in absolute terms from 2000) and thought provoking (reduce mass per product by 10%). For some areas, such as operations and distributions, the targets are numeric and clearly understood. For others, such as R&D, they're more strategic.

The four environmental impact areas — or perspectives as Sony calls them — and the six lifecycle phases make up a matrix. Thus the company has set a climate-related goal for each lifecycle phase, chemical reduction goals for most phases, and so on.

Sony's site repeatedly refers to hitting zero "throughout the lifecycle of our products," which raises an interesting question: Will Sony be demanding that its suppliers hit zero as well? I would think that this discussion could not be very far away.

Of course, we could debate if "zero" is even good enough, since cutting-edge sustainability thinking focuses on creating products that improve the environment (such as concrete that captures CO2 in its manufacturing process or building materials that clean the air). But for the big guys like Sony — and for all of us — zero is a pretty good start.

[This post first appeared at Harvard Business Review Online]

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