Green IT spend to outstrip Y2K within two years

Within two years, most big businesses will be on their way to spending three times as much on systems for carbon accounting and sustainability reporting compared to what they spent on Y2K, according to analyst and research firm, S2 Intelligence.

Businesses will collectively spend at least $595 billion on systems to support green accounting.

Releasing forecasts on what businesses will spend on systems to support green accounting through to 2015, S2 Intelligence estimates Australian business will spend at least $6.5 billion.

The research firm's managing director, Dr Bruce McCabe, said to reduce the carbon footprint of businesses we first need to measure it, but green accounting today is shallow, with lots of window dressing and little actual measurement.

"By 2010 all types of businesses will be investing in systems that support detailed and continuous information collection."

This will extend beyond energy intensive manufacturers and power utilities.

"Even services companies will see all their offices progressively instrumented to capture carbon footprint data," McCabe warned.

"Government regulation--via carbon markets and taxation-will be matched by customer and trading partner demands for detailed reporting.

"Carbon labelling in supermarkets is a good example. Led by chains such as Tesco in the U.K., this will soon impact what makes it into the shopping basket.

"Even schemes that follow a simple star rating will cascade into new accounting requirements for every business in the supply chain," he said.

" The primary producer, manufacturer, wholesaler and transport provider will all need to be able to report their contribution--or lose business to someone that does."

McCabe said the IT industry has not yet woken up to the opportunity.

"Most of the so called IT visionaries still think their environmental contribution stops at getting computers to use less electricity," he said.

"All the technological components are there, but so far there has been little creativity in packaging them into compelling solutions of businesses."

Estimates for the total amount spent on Y2K, by comparison, range between US$300-$600 billion.

The projections draw on smart energy and compliance reporting forecasts in the S2 Intelligence report The Future of Business 2008-2018. Costs factor for instrumentation of buildings, factories, vehicles and assets, networking, accounting software upgrades, systems integration and IT services.

Government costs for systems to support monitoring and compliance reporting are excluded.

Dairy King CIO, John Bianalli, agrees Green IT will be more costly than Y2K if it involves updating software and systems to support continuous information collection.

"It isn't an unrealistic figure if the level of accountability is going to be as high as the report implies," he said.

"Like most companies we have taken the initial steps required to be more socially responsible but these initiatives basically involve using less power and remodelling the data center.

"This report implies that 2009 could be the year when we all forced to implement a green agenda that is more far-reaching."

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