Being green and saving green both require better information

From our earliest years, we are taught that there is a straight choice between merit and money – that you can’t be righteous and rich. Most of us muddle along somehow – but when someone offers you the chance to do both at once, to do the right thing and the profitable thing at the same time, then it’s hard to turn it down.

By Plant Engineering Staff November 1, 2008

From our earliest years, we are taught that there is a straight choice between merit and money — that you can’t be righteous and rich. Most of us muddle along somehow — but when someone offers you the chance to do both at once, to do the right thing and the profitable thing at the same time, then it’s hard to turn it down. That’s what the environmental movement is saying to the world of business.

For years, thinking about the planet has been vaguely uncomfortable. You may get a warm glow inside from driving a smaller car than you’d like, but it doesn’t ease the discomfort of having your knees pressed up against your ears. You may feel good about avoiding the airliners, but the back yard doesn’t match Barbados as a holiday destination.

But now it’s different. The greener your organization is, the less money you waste. Cutting your carbon footprint is cutting your costs. Your chief finance officer will be just as pleased by the result as the Friends of the Earth are.

So let’s be honest — the main reason most organizations are interested in going green is because it makes sound financial sense. Energy costs have risen, are rising and are going to rise some more: in the IT budget alone, the cost of energy is expected to rise from 10% of the budget today to around 50% in the next three years. Anything that can cut fuel bills without compromising efficiency has got to be worth looking at. And there are other business reasons as well: companies are always looking for growth, and many of them have already filled their IT data centers to capacity.

There is no more power available for them to draw, and if there was, the heat created by all the equipment would be too great for the computers to work. So their choice is either to put their growth plans on hold, or invest in a new data center.

But if an effective asset management system could cut energy use by up to 50% — which is what is claimed — then that expensive decision could be postponed for several years.

Similar calculations could be done throughout the organization. Fleets of trucks, a plant full of production equipment, office photocopiers or heating and lighting systems — until the energy requirements of all the assets can be properly measured and monitored, it’s impossible even to start to make savings.

Polishing the company’s image

But the incentives for adopting a green asset management strategy go beyond the simple cost savings to be made, significant though they are.

It’s clear that in the future, government or local taxes and other charges will exact a direct price from companies that waste energy. Carbon taxes are firmly on the political agenda, and the UK government, for example, has announced that it plans to cut greenhouse gas emissions by 60% by 2050.

And in the present, with the dangers of global warming in the news and increasing numbers of customers looking for green products, many companies are seeing the benefits to their public image of cutting back their carbon footprint. A company that can demonstrate that it is taking a responsible attitude towards the environment and the use of energy can both save money and improve its public image.

So reducing the overall carbon cost is important throughout the organization. Chief information officers will see gains to be made in the provision of an effective IT infrastructure; chief finance officers will see reductions in costs and the avoidance of tax liabilities; and chief executives will see a significant enhancement of the organization’s brand. Green asset management makes sense all around the boardroom.

Measure your assets

Managing assets means monitoring their performance in use, not just taking the manufacturers’ declared figures.

For instance, though the manufacturer can tell you that flat-screen monitors will use just over half as much power as conventional models — a significant energy saving when you consider the number of desktop computers in a medium-sized company — they can’t tell you how those computers will be used. A desktop PC may use 60 W when running a screensaver program, compared to 40 W when the normal Windows desktop is displayed, and less than 2 W in hibernate mode.

But those figures again are only estimates. To know the actual figures, you have to turn to your asset management software, which can tell you not just how much energy a particular piece of equipment should use, or might use, but how much it does use, which is often a very different figure.

It can produce a comprehensive picture of energy use across the organization, supplying a graphic map of the workplace to show where the energy hot-spots are, or it can zoom in on a single piece of equipment to monitor and display its actual energy consumption.

It can check on which assets are efficient, and which need attention; it can provide an automated preventive maintenance schedule, so that assets are kept working at optimum efficiency, and it can keep a constant check on temperature, humidity and airflow in the working environment.

Effectively, it can highlight every plughole in the organization down which energy and money are trickling away.

Taking control of information

With that information, senior management can take firm control of energy use and develop a coherent strategy to manage and control it. They can budget and plan growth — remember the millions that could be saved by postponing the construction of a new data center — and they can be confident that all their equipment is properly maintained and running efficiently.

So the organization’s current spending is reduced, its potential for growth is improved and its image is improved among a public that is increasingly concerned with environmental damage. And at the same time that it’s achieving all that, it also has that agreeably smug feeling that it is being virtuous and doing the right thing. It really is being good by being clever.

Excerpt from the book, “The Business Impact of Enterprise Asset Management,” by IBM Software Group, IBM Corp. For a copy of the book, go to .

European legislators back emissions rules

European Union legislators voted Oct. 7 in favor of laws aimed at reducing greenhouse gas emissions, according to a report in the New York Times, but frustrated some environmental advocates by taking steps to ease the burden on industry.

The European Union created the world’s largest emissions trading market in 2005 to require heavy industries to cap their pollution levels. So far, that initiative has not helped cut emissions by much, leading policy makers to propose changes.

The most contentious changes would make it more expensive for heavy industries to continue to pollute, by requiring them to buy more of their carbon permits after 2012. European governments currently award the majority of the permits free.

On Oct. 7, the Environment Committee of the European Parliament voted to support proposals that would require most electric utilities to buy all their permits starting in 2013. Countries such as Poland that rely heavily on coal seek a more gradual introduction.

But legislators also added proposals that could exempt utilities that feed heating systems or use high-efficiency technologies for heating and cooling. They also voted in favor of subsidies worth about 10 billion euros, or $13.6 billion, to help utilities develop technologies to capture and store carbon dioxide from coal plants. The committee supported adding the aluminum and chemical sectors to the system by 2013. It now includes the steel, cement, glass and pulp and paper industries.

Businesses have warned that the plan will cost billions of euros. In a concession, legislators said that industries would need to buy only 15% of their permits starting in 2013 — a move intended to shield them from competition from manufacturers outside Europe where there is less regulation. The commission had proposed requiring industries to buy 20% of the permits starting in 2013.

The proportion of permits that companies would be required to buy would increase each year, to 100% by 2020.