Businesses Increasingly Go Green To Cut Costs

Rather than pushing the ‘green agenda’ down the priority list, a new report has found that the economic downturn may have actually made businesses in the ICT sector pay more attention to the subject, as a way to cut costs.

The third annual edition of Frost & Sullivan’s study, “Sustainability in Telecoms: Return on Environmental Investments”, looks at measures for returns on eco-investments as well as identifying best practises.

The report examined the green efforts of a number of big name telecom carriers such as British Telecom, France Telecom, Telefonica and Swisscom, as well as vendors such as Alcatel-Lucent, IBM, and Ericsson.

“It is encouraging that most of the companies that participated in the research have started to develop their own frameworks and even gone ahead to seek accreditation from various industry bodies,” said the report.

“IBM seems to be the most advanced in its measurements of environmental investments while British Telecom should finalise its ROI models for a range of solutions in the run up to the 2012 Olympics,” said Frost & Sullivan Principal Analyst Sharifah Amirah. “In the longer term, social and environmental investments will start to feature in a company’s financial statements/audited reports, similar to the triple bottom line accounting approach.”

However, it seems that even those big name companies with very advanced environmental strategies, are only just beginning to develop measurement frameworks for their green investment. The reason for this, according to the report, is the lack of standard measures, the difficulty in measuring non-tangible benefits, and the fact that eco investments tend to be perceived either as a marketing or corporate social responsibility (CSR) exercise.

“The amount of environmental investments in the ICT sector should at least double in the next 2-3 years,” said Amirah. “Despite the lack of concrete frameworks at the 2009 Copenhagen summit, individual governments, stakeholder and consumer pressure will continue to drive businesses to adopt more sustainable operations.”

Frost & Sullivan pointed to its enterprise survey conducted at the end of 2008 (a time when the downturn was in full force), which revealed that close to 600 business leaders expected to increase their environmental investments by 67 percent over 2009-2010. A majority of them saw it not only as an ethical obligation but also as being critical to growth.

However, whether this trend will filter down to smaller businesses or those outside the ICT sector, remains to be seen. Indeed, a recent survey from SAP of 400 British businesses qualifying for the CRC (Carbon Reduction Commitment), found that the majority of respondents were unprepared for it.