In-Depth

Global CEOs Endorse Green IT

Gartner looks at an open letter destined for next year’s G-8 summit

• By Stephen Swoyer
• 07/01/2008

To be sure, Hewlett-Packard Co. (HP), IBM Corp., and Sun Microsystems Inc. aren't merely paying lip service to Green IT, since all three vendors have announced ambitious new offerings (or in IBM's case, initiatives) that purport to be green -- or green-er -- than conventional products.

All three have done so, however, in the absence of demonstrable interest from consumers. Does Green IT sell, and -- if so -- who's buying?

Global 2000 CEOs are.

Last month, more than 100 executives endorsed an open letter to Japanese Prime Minister Yasuo Fukuda, who's preparing to meet with world leaders at the next G-8 summit scheduled for July in Japan. The letter outlines a series of policy recommendations to help manage climate change once the Kyoto Protocols expire in 2012.

With so much talk of Green or Green-ing, it's easy for IT buyers (or world leaders) to tune out such a development -- industry-watcher Gartner Inc. concedes that it might seem of a piece with other "greenwashing" news items -- but doing so would be a mistake, the analyst firm says.

"[I]n our opinion, it's a milestone," write analysts Mark Raskino and Simon Mingay. It's a pro-active move, according to the duo, because it's in the best interests of Global 2000 CEOs to help shape policy decisions that will -- sooner or later -- affect their businesses.

"These CEOs are taking highly visible collective action to … [m]itigate the risk that uncertainty over intergovernmental policy presents to their businesses," they point out. In addition, Raskino and Mingay indicate, the letter is part of an effort to "create a level international playing field for issues such as green house gas emission controls and taxation."

What will the recommendations -- if enacted -- mean for IT? Raskino and Mingay note they could lead to a "deep and liquid international market for carbon" -- paving the way, in effect, for electronic carbon trading. This projection disregards the lack of a consensus concerning carbon trading in the United States (one of the world's biggest producers of greenhouse gas emissions) as well as the Bush administration's initial disavowal of the Kyoto Protocols.

It also overlooks the divisiveness of such a cap and trade system, in the U.S. at least. Even in cases where policy-makers agree that carbon trading is inevitable, they disagree about just how it should be traded.

It's a fissure which, not surprisingly, breaks down along party lines. Last month, Republican Presidential candidate John McCain insisted that his own policy recommendations don't place any hard or mandatory "caps" on carbon emissions -- a claim that seems inconsistent with McCain's legislative history, starting with the Lieberman-McCain Climate Stewardship Act of 2003 (which did, in fact, call for mandatory caps on emissions; Lieberman and McCain tried again -- with a similar legislative effort – in 2005). McCain may be an attempt to garner support from his party's conservative wing, which views him as a weak conservative, at best -- so he's repudiating policies that he himself once actively supported.

This begs a question, however: if the U.S. bucked Kyoto in 2001, largely as a result of Bush administration policy, how will it digest an international carbon-trading framework that's anathema to both its libertarian and right wings?

Elsewhere, experts say, the climate change regulations endorsed by global CEOs could lead to the development of new programs designed to create more efficient (or environmentally friendly) supply chains. If adopted, they should also lead to monitoring and "benchmarking of international progress and compliance" with respect to agreed-upon metrics and methodologies.

Regardless of what's coming, CEOs should start preparing now, Gartner counsels. "Although the letter focuses beyond 2012, these CEOs are likely to start their preparations now to ensure a competitive advantage. During the next decade, developing a low-carbon economy will be a complex and formidable challenge. IT leaders should expect the first demand impacts in 2009, but it would be wise to start getting familiar with 'green IT' requirements now," Raskino and Mingay conclude.