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Is Carbon Core Business?

Astrid Wynne | Sept. 6, 2021, midnight

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Green Finance is a growth area at the moment.

A recent Global Compact conference devoted an entire section to this, as did the Business Green Net Zero Festival this September, which I was fortunate enough to attend. These were no tree-hugging events. Speakers at the Net Zero Festival were from Ministry of State, Confederation of British Industry, HSBC and Natwest. All of whom were speaking with urgency on the need for carbon reductions. If we are to limit the temperature rise to 1.5⁰C, we need to reach global net zero by 2050 and achieve 50% of those reductions in the next ten years.

Banks, investment companies and multi-nationals all have an increasing focus on financial incentives to drive positive change. This comes in the form of preferential lending to customers taking steps to reduce their carbon, institutional investment stimulating sustainable business growth and Chief Finance Officers of huge companies advocating for sustainability to be a core part of boardroom discussions. There are sound economic incentives on this.

Research shows that customers increasingly choose their products with sustainability in mind and that this is most true of younger demographics, the buying power of the future. There are also cost savings to be made by reducing energy bills with efficiency measures. Another factor is the evidence of climate change already hitting the headlines in the form of floods, forest fires and heat waves. As ever, the challenge is to realise high-level resolutions with practical application.

Business is attempting to integrate environmental and social concerns into systems that did not evolve with these in mind. Getting over this hurdle requires different areas of the organisation to communicate and to reimagine how the measure success.

A recent meeting with a hedge fund data centre threw this into sharp relief. The technical department’s main concern was performance, and their sustainability focus was waste reduction on electronic hardware with all the materials that contains. When we mentioned energy usage, they said this would be covered by the finance department, whose main concern was return on investment, and reporting focus was carbon footprint. (Since Streamlined Energy and Carbon Reporting came in, both form part of audited company reports.)

It soon became clear both departments were missing significant pieces of information to deliver on cost and carbon effectiveness. The technical team had not yet thought about delivering on performance with less energy, because they were only looking at part of the puzzle. The finance department had not yet considered a reduction of server energy usage useful, since they did not know how much was associated with the server load or how to reduce it.

No one knew about the energy savings to be realised in the reuse of equipment and the choice of older generations because there was no system in place to measure Scope 3 (embodied) carbon in the equipment.

We ran the Interact tool on two solutions for the data centre, one new and one refurbished. The refurbished option demonstrated the data centre could save 78 Tonnes of Scope 3 Carbon and £230,000 on procurement cost. All of this represented financial and carbon credits they would not have been aware of without accurately measuring the performance and energy on the hardware.

We were also able to deliver on the reduced global e-waste resolution of the technical department. For me, this highlights three of the key themes that run through events like the Business Green Net Zero Festival.

The first is transparency, which allows us to translate resolve into results.

The second is partnership. This is usually described in sustainability circles as partnership between different organisations. However, we are finding that can also be between different departments of the same company.

Lastly, there is collaborative leadership as sustainability comes to the forefront of the mainstream.

Is Carbon Core Business? Increasingly so, and we are working on making this work.