How Green are Green Businesses? - Part Two

Visibly Green
Corporate transparency will become absolutely essential to provide regulatory reporting and deliver highly visible environmental policies - from ethical sourcing of products and services to regular asset maintenance to ensure optimum performance and minimum carbon emissions.

According to Gartner’s Top Predictions for IT Organizations and Users, 2008 and Beyond: Going Green and Self-Healing, by 2010, 75% of organizations will use full lifecycle energy and CO2 footprint as mandatory PC hardware buying criteria. As a result, the IT analyst group expects that most technology suppliers will start some level of more detailed lifecycle assessment during 2008. The area of carbon accounting, tracking and product labeling (beyond IT) will explode over the next two years.

In the short term, this process will be complex, oversimplified and crude and it will lack standards, creating a limited impact until at least 2010. However, Gartner believes, regardless of the lack of appropriate standards and common metrics, enterprises will demand the information.

However, to be used effectively, organizations need a clear and coherent method of recording, measuring and reporting on the lifecycle of each asset, particularly on energy consumed during manufacturing and distribution processes, and used for IT equipment.

The Ethical Asset Register
This could prove to be a major stumbling block for organizations. Currently, the majority of companies do not even accurately record the number and location of assets, let along their purchasing and maintenance history. In a recent survey of 300 data center managers, over a quarter of respondents did not know how many servers were under their control and more than 40% found they had servers they did not know they had or had looked for one only to find it had been retired.

And this problem is far from limited to the IT asset register. Physical audits of the asset base typically reveal that less than 40% of the assets on the register are easily identified and an estimated 10% are no longer in existence. The problem is often made worse because of varying asset tracking strategies and consistently poor record keeping.

With each department typically recording asset information differently - often on spreadsheets or even paper files - there are no common asset definitions. There is rarely any integration with maintenance, resulting in highly inaccurate information on the replacement of component parts, and few organizations even bother to record the movement of assets around or between buildings.

With this fragmented approach, organizations have no way of accurately and consistently recording or reporting on the key information required to support CSR strategies - from knowing an asset’s country of origin, to how the product was made, what materials it is made from, maintenance schedules and final, environmentally ethical, disposal.

Accurate records will also ensure that an asset’s life is as long as possible. Companies with a loose grasp on which assets are ready for disposal are far more likely to dispose of assets prematurely which can in turn impact the environment through unnecessary waste and recycling. In addition to this, any changes to the value of an asset throughout its lifecycle should always be reflected financially within the business allowing for correct calculation of depreciation. Failure to do this simply undermines business value.

Without a consistent, corporation-wide approach to recording comprehensive fixed asset information, organizations will not be able to accurately report on their asset performance, whether for fiscal or for environmental concerns such as carbon emissions and recycling figures. It is only by capturing increasing detail about an asset’s lifecycle that organizations can begin to provide the corporate visibility required to underpin CSR strategies.

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