Protecting the Earth and the bottom line

As the 27th anniversary of Earth Day approaches on Sunday, more companies are realizing that embracing energy conservation is good business, not just good public relations.

"It's not just about pictures of little kids holding balloons, running across green fields," said Larry Vertal, senior strategist in microprocessors at Advanced Micro Devices Inc., which hosted an energy summit at its Sunnyvale, California, headquarters on April 9.

Many technology companies highlight energy-efficient products they make for their customers, but more than 100 U.S companies, including AMD, have pledged to reduce energy consumption in their own operations, taking steps as complicated as converting to renewable energy or as simple as selling a vacant office building.

They do it to be good corporate citizens, reduce overhead and stave off possible government regulation. But reducing a company's "carbon footprint" is a new area for companies to get into, and it's complicated and initially expensive.

Growing electricity consumption often prompts construction of more generating plants powered by fossil fuels, creating more carbon dioxide emissions. These so-called greenhouse gases (GHGs) collect in the upper atmosphere and are often fingered as culprits in global climate change. A company's carbon footprint is a calculation of the amount of energy it consumes and how much carbon dioxide is created to supply that energy.

AMD pledged to reduce GHG emissions by 40 percent by 2007, compared with its baseline year of 2002, and is building an 870,000-square foot office complex in Austin, Texas, powered exclusively by renewable energy, said Vertal.

The company also pledges to reduce use of perfluorocompound (PFC), a GHG contributor that is used to make semiconductors. "We know the use of certain materials results in negative impacts on the environment, so what we do is identify which of those are used in our processes," said Craig Garcia, director of AMD's global corporate services.

Sun Microsystems Inc. has pledged to shrink its carbon footprint by 20 percent by 2012 from its 2002 total. Sun is one of the first companies to create its own vice president-level department of Eco-Responsibility, which printed a report, on recycled paper, detailing its goals.

But Sun first had to answer a fundamental question: How do you measure your carbon footprint?

"It's a complicated process," said Subodh Bapat, vice president and a distinguished engineer at Sun. "The hard part is figuring out what our baseline was in 2002."

Back in 2002, most companies didn't track their carbon footprint. Determining it is not impossible but will take some time, Bapat said.

Sun allows employees to work from home to cut down on driving, and sold a 1.4 million square-foot office campus in Newark, California, in 2006, eliminating the energy to heat, light and cool it, he said.

Sun is one of the U.S. Environmental Protection Agency's (EPA's) Climate Leaders, a group of 117 companies that have pledged to reduce GHGs. There were only 11 five years ago. Companies share case studies with each other on how they are reaching toward their goals, some reporting a return on investment of 5 percent to 30 percent, said Jim Sullivan, director of the program at the EPA.

Technology vendors can help their customers reach their goals by continuing to create more energy-efficient products, said John Tuccillo, vice president of industry alliances at American Power Conversion Corp. and a member of the Green Grid, a tech industry energy group.

"If our efforts help end users accomplish greater computing throughput for less wattage, the demand put on utilities to maintain a constant computing throughput would be reduced," Tuccillo said.

Heightened concern about climate change has prompted calls for federally mandated limits on greenhouse gases. Some companies acknowledge that taking action now could avoid added regulation later. But AMD's Garcia said companies need to do it because it's the right thing to do.

"If we're doing it for opportunistic reasons, like to get ahead of the curve if the laws change, we're doing it for the wrong reasons," Garcia said. "But, as a practical matter, if you're already thinking that way, then you're in good shape if the laws change."

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Copyright © 2007 IDG Communications, Inc.

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