Business IdeasCost benefits will drive firms to seek environment sustainability
As energy costs rise ahead of inflation, awareness of potential impact of climate changes increases among organisation’s stakeholders. By 2014, strategies of at least two-thirds of organisations will exploit or risk-mitigate environmental sustainability, according to Gartner Inc, an information technology research and advisory company.
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Driven by sustainability, by 2014, electricity prices will have risen by an average of 30 per cent in real terms across OECD countries. The 50 per cent increase in population by 2050 according to the UN, a growing proportion of which will substantially benefit from income will accelerate environmental challenges, and put much greater emphasis on sustainability, and increase competition for resources, says the report.
The winners in a low-carbon and sustainable economy will be those that can exploit the opportunities and give due consideration to doing different things, rather than looking at simple incremental improvements. To do that organisations need a much more integrated approach than they are taking today, says Gartner. It recommends starting the analysis to understand where energy, water, GHG emission, materials and waste are produced or consumed during the life cycle. It also speaks about creating a shadow price for carbon.
Gartner believes that environmental sustainability also offers long-term strategic benefits to IT vendors in total cost of ownership, branding, innovative potential and market positioning. It can also help mitigate pressure from stakeholders such as government, regulators and financial markets. It says that pressure on organisations to act on improvements in energy efficiency and GHG emissions will continue to mount during 2010.
The report says that in regions with high levels of sunlight, high concentration photovoltaic (HCPV) systems could provide electricity at a cost comparable to fossil fuel generators. While there have been some large-scale system deployments, the HCPV market’s potential depends on two principal factors; first, vendors in this space must achieve cost targets below $6 per watt installed by 2010 or 2011.
This must be followed by a clear roadmap for their systems which means that eventually they produce electricity for less than $0.15 per kilowatt-hour. Second, vendors in this space need to educate the market on the relatively low cost of electricity from their systems in high-sunlight regions.
But the solar market depends on a conservative set of buyers. Although the market potential is large, according to Gartner, there are significant barriers to adoption from conservative buyers or regions with poorly-developed infrastructure.
Server virtualisation and IT operations management will boost end-to-end green branding and positioning in EMEA, says the report. Together with IT operations management software, virtualisation is supporting the objectives of reducing carbon footprint and reducing energy consumption. By 2013, the total virtualisation market in Europe, West Asia and Africa will be worth $834.8 million, with a compound annual growth rate from 2008 through 2013 of 16.5 per cent.
The report also points out the role of the semiconductor industry saying it must take an increasingly active role in the determination of government policy. Some facts in this regard according to Gartner is that lead-free solder technology has cost over $35 billion to implement due to the Restriction of Hazardous Substances (RoHS) directive. The Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) initiative may cost over $5 billion to $6 billion to implement.
“The semiconductor manufacturing segment of the industry will participate in the transformation as new materials, processes and equipment are developed to minimise environmental effects while improving efficiencies and lowering costs,” says Gartner.