January 27, 2009
by Charles Waltner
Long viewed as a societal burden for corporations, environmental concerns are now proving a surprising catalyst to a host of both obvious and unexpected business benefits.
Companies that have made substantial commitments to reducing their environmental impact are discovering new ways of cutting costs and improving operations. And for many companies, especially technology-focused ones such as Cisco Systems, environmental initiatives throughout the world are creating potentially huge and diverse markets for new products to help improve the energy efficiency of everything from buildings and data centers to automobiles and the electrical grid itself.
With this in mind, Cisco is now focusing on ways to use networking technologies to speed such efforts to help its customers improve both their businesses and the environment. In its first major product aimed at this goal, the company announced the development of Cisco EnergyWise, a technology that will help businesses put a stake through the heart of "vampire power," the energy drawn by many electrical devices even when they are not in use.
EnergyWise, a free software upgrade for Cisco's Catalyst line of network switches, will make it possible for businesses to monitor and control the energy consumption of many kinds of networking devices, including IP phones, video cameras, and wireless access points. By combining software-based policy management tools with EnergyWise, companies can automatically turn off or reduce power to their digital devices.
Cisco will also extend EnergyWise to curtail energy usage of other types of products like personal computers and printers. The company says it will eventually make EnergyWise capable of controlling energy uptake by other devices throughout a building, including elevators, heating systems, and lighting.
As the world's leading networking equipment maker, Cisco has hundreds of millions of products connected to business communications systems throughout the world. In general, more than one billion devices link to all types of corporate and home networks. That number is expected to increase to more than five billion by 2012, making such technologies as EnergyWise an important aid for energy conservation efforts, Cisco executives say.
While the energy used by data centers and communications networks will rapidly increase to keep pace with all the new devices, experts have calculated that new information technology and networking advances like EnergyWise could reduce worldwide pollution by five times more than what such technologies would generate.
Saving with Green
Neal Elliott, associate director of research at the American Council for an Energy-Efficient Economy, says new technologies like EnergyWise can help businesses tap into long-ignored opportunities for cost reductions. Waste by definition is expensive, he says. Certainly, volatile energy prices are now underscoring this approach.
"Energy is a big piece of the cost pie that many companies have overlooked," Elliott says. "For the past 50 years corporations have focused on worker productivity as the way to reduce costs. But now they are realizing there's a lot more potential in reducing their energy consumption. This is clearly no longer a tree-hugger issue. It's a key to business success."
Cisco would agree. Less than a year after making a commitment to substantially reduce the environmental impact of its operations, the company is finding just how beneficial "being green" can be for a business.
Last June Cisco - working in partnership with leading government agencies and environmental groups - launched a four-year effort to reduce its greenhouse gas emissions by 25 percent.
The company has already knocked 10 percent off its business travel by using virtual meeting networking tools such as WebEx online conferencing software and its high-end video meeting product, Cisco TelePresence (27 percent of Cisco's direct greenhouse gas emissions are from business travel).
By working with the Environmental Defense Fund, Cisco also identified a simple way to cut $24 million over four years from energy consumption in its labs.
Rick Hutley, vice president of the global innovations practice in Cisco's Internet Business Solutions Group, says benefits from green efforts can also extend well beyond cost cutting. "Green equals efficiency. And efficiency means good business." he says. "It should be an 'ah-ha' moment for executives that not only can they afford to go green, they can't afford not to."
By being greener, for example, a company can create products that use less material and therefore are less expensive to make, giving a company a competitive price advantage. In other cases, corporations that find alternative ways to conduct meetings or organize their workforce can boost productivity from regaining hours previously lost to business travel, Hutley says.
Corporate Environmental Leadership
But beyond good economic sense, the world is depending on major corporations to lead a new era of environmental stewardship, experts say. As the primary controllers of resource usage, collectively corporations are perhaps the most important players on the environmental stage.
"Governmental regulation is important, but the reality is we won't successfully address climate change if corporations don't become proactive," says Elizabeth Sturcken, a managing director at the Environmental Defense Fund.
But in his work with the world's largest businesses, Hutley says he has found that only "a handful have decided to make the kind of commitment that is necessary to gain the strategic benefits of environmental initiatives."
But Sturcken says the situation seems to be changing. "Our phone is ringing off the hook from companies that want to know how to get started."
Susan Wickwire, the director of voluntary corporate climate programs for the U.S. Environmental Protection Agency, says big businesses are taking much more interest in the EPA's various "green" programs. Last year, for example, the number of participants in its Climate Leaders initiative increased 50 percent. Climate Leaders helps major corporations properly analyze their climate change emissions and set aggressive reduction goals. It now has 250 participating companies.
"We saw a real spike in 2008," Wickwire says. "Once companies seriously look into this issue, they are realizing just how good green can be."Charles Waltner is a freelance writer in Piedmont, Calif.