[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]