Green reality: “Regulations won’t stop until the wooly mammoth returns”

IDC, the Framingham, Mass.-based research firm, was pleasantly surprised in a survey of 372 U.S. companies to find that the vast majority—72 percent—stated that green/sustainability issues were important to senior management.  Much of the interest, however, is being driven by regulations—a key factor in doing business. As one survey respondent put it: “Regulations won’t stop until the wooly mammoth returns.”
By Frank O Smith, senior contributing editor (fosmith@thewritinggroup.com) January 23, 2009

IDC , the Framingham, Mass.-based research firm, was pleasantly surprised in a survey of 372 U.S. companies to find that the vast majority—72 percent—stated that green/sustainability issues were important to senior management.
Much of the interest, however, is being driven by regulations—a key factor in doing business. As one survey respondent put it: “Regulations won’t stop until the wooly mammoth returns.”
Says Jill Feblowitz, IDC practice director for business technology, “We were quite surprised at the positive response and the number of initiatives going on. Internal recycling was very popular in all segments, followed by energy efficiency—an indication that all sectors are looking to reduce their carbon footprint, but also the cost of operations.”
The survey asked respondents the importance of green/sustainability to top management; to identify what initiatives were under way, their motivation; and the challenges encountered. They also were asked what role IT was slated to play.
Manufacturers comprised 60 percent of the respondent companies, which also included oil & gas, utilities, and retail firms—all with 1,000 employees or more. The findings were discussed in a December Webinar featuring a panel of IDC industry analysts.
For manufacturers, “It’s all about regulations today, and what they’re going to be in the future,” says Kimberly Knickle, IDC practice director for manufacturing. “They’re very convinced that there will be more regulations in the future.”
Manufacturers listed energy efficiency, reusable materials, improving transportation and distribution, and reducing greenhouse emissions as their top initiatives. “The one we see increasing the most over the next few years is using renewal energy,” says Knickle. “Today it is hard to buy from a renewal source, but it will get easier over time.”
Looking at ROI for such initiatives, Knickle claims the results are mixed. “Some were willing to look out three or more years for a payback, and 11.6 percent were willing to expect no payback, or had no payback metrics,” she says.
A sizeable majority of manufacturers—73 percent—said IT would play a role in improving their green/sustainability profiles. This was somewhat countermanded by the fact that slightly more than 22 percent indicated that IT will be increased. Meanwhile, 43 percent of manufacturers stated they would buy new applications to assist them. This is in comparison to 60 percent of respondents in the utility sector, who say they are going to invest in more software.
“The hidden challenge for manufacturers is how they will make their processes greener,” Knickle says.
In addition to software playing a prominent part, IT consulting services also were listed as a prime factor for enabling green initiatives. Some engagements will include involvement with suppliers and partners, as companies are beginning to realize they are dependent on others to help meet their goals.
Best practice recommendations for all respondents include:
• Use cross-functional teams and core sponsors.
• Funding will be tight, given the economy, so priorities are critical.
• Work closely with IT suppliers and professional service providers that may have best-practice guidelines in key focus areas.
• Participate in industry efforts and standards initiatives.
Recommendations for vendors include:
• Know what functionality and data you already have that supports green business.
• Listen to customers to better partner with them.
• Take advantage of existing customer councils to raise the topic and know what to change first.
• Talk green, but make it about business.
Related links:
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Lean to Green: Free technology helps Ohio manufacturers make jump to renewable energy industry