Here’s a quick green quiz. Which IT company believes energy star ratings for servers will put some manufacturers at a competitive disadvantage? Who sees climate change as a great business opportunity? And who says their manufacturing related carbon emissions may rise by up to 50 percent by 2015? According to answers given to the 2007 Carbon Disclosure Project (CDP) they are Sun, EMC and Intel respectively.
The CDP was set up to give investors data on greenhouse gas (GHG) emissions, power consumption and climate change related strategy information of FTSE and S&P Top 500 companies. As well as those mentioned IBM, HP, Cisco, Dell and Microsoft also volunteered information. Links to their full responses to the questionnaire are below.
Total GHG emissions reported
HP - 1,598,500 CO2e metric tonnes
IBM - 2,824,361 CO2e metric tonnes
Sun - 235,051 CO2e metric tonnes
Intel - 3,870,000 CO2e metric tonnes
Cisco - 338,750 CO2e metric tonnes
EMC - 263,527 CO2e metric tonnes
Microsoft - 416,170 CO2e metric tonnes
Survey data ranges from measurement of GHG emissions and mega watts of power used in operations to GHG reduction targets. Firms answer only the questions they want to.
In climate change terms IT companies want to be seen as good global citizens. And while companies say they want a long term regulatory framework to help address the issue most mention climate change related regulation as a commercial risk.
If only the paranoid survive - as Intel’s Andy Grove famously told us - how different companies address the same question on risk tells us a lot about their corporate thinking.
The CDP asked: What commercial risks does climate change present to your company including physical risks to your business operations from scenarios identified by the Intergovernmental Panel on climate Change or other expert bodies, such as sea level rise, extreme weather events and resource shortages?
If there was an award for brutal honesty, it goes to Sun: "Given the nature and magnitude of Sun Microsystems' GHG emissions, the company is unlikely to be directly regulated under current or proposed climate change legislation in the US and other countries. [Sun] is most likely to feel the impacts of these regulations as higher energy costs to run our operations, and increased demand for low-power products by our customers," said the vendor its responses.
"The potential is higher that energy efficiency standards for information technology equipment will directly impact our business. For instance, EPA does not currently have an Energy Star rating for computer servers, a major portion of Sun's product line. Should EPA publish such a standard, IT equipment buyers may start requiring equipment they purchase to meet or exceed this standard. Vendors who cannot comply will be at a competitive disadvantage."
HP says the impact is unknown but is almost biblical in its terminology: "Losses could also be caused by power shortages, telecommunications failures, water shortages, tsunamis, floods, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters, for which we are predominantly self-insured.”
IBM answers the same question with: "At this time, based on the nature and scope of our business operations, IBM does not perceive any unusual physical risks outside of those we plan for as part of our ongoing business and risk management processes.”
Intel mentions possible drought in the Western USA but says its business recovery plans "are intended to ensure our ability to recover from natural disasters."
Dell appears worried about hurricane-affected oil production in the Gulf of Mexico and oil and electricity supply in general. “Extreme weather and resource shortages could disrupt our revenue and increase our costs and expenses.”
EMC says "The primary business risk to EMC’s operations is expected to be potential for infrastructure damage and related power outages from storms, and possibly business continuity risks due to outbreaks of communicable disease."
Microsoft thinks locally: "Microsoft is primarily an office-based company with headquarters and largest number of employees in the Puget Sound region in the state of Washington. Glaciers in the Cascade and Olympic Mountains have been retreating, Puget Sound water temperatures are rising faster than the global average, and local river and stream flows are changing. Microsoft will continue to monitor the changes to this region and others in which we do business and work with local organisations to reduce our contributions to climate change.
Cisco says: "The physical risks to Cisco’s business operations from scenarios identified by the Intergovernmental Panel on Climate Change and other expert bodies are low to moderate.
Sun believes its revenue and financial condition could be "adversely affected by natural disasters and other business disruptions related to climate change". Key areas of concern for Sun include:
- Power outages, shortages and blackouts in major operations areas in the US, such as California and the East Coast, have occurred in the past and may occur with increasing frequency in the future.
- Facilities located near coastlines and other tidal zones, such as those in Menlo Park, California, could be adversely impacted by increases in sea level of only a few feet.
- Regulatory pressures and other constraints on power providers could significantly increase the cost of energy used by our operations as well as those of our suppliers and customers, which could negatively impact our revenue and overall financial performance.
- Severe weather, other natural disasters such as fires, and disease epidemics could result in business interruptions and losses.