Costs, Regulation and a Touch of Corporate Responsibility Put More Green into IT

The legions of fans who thronged to drop $200 on an iPhone 3G in July probably did not think much about the gadget’s fate when obsolescence eventually renders it scrap. But Apple definitely has been. Under pressure from tightening global anti-pollution standards, threat of environmental lawsuits and more awareness of corporate responsibility, Apple and other technology firms are racing to place a “green” stamp of environmental approval on their operations and products.

It’s easy to understand why, when one considers the electricity used to run data centers (and keep them air conditioned), the vast quantities of water and toxic chemicals used to make components and the mountain of electronics put out to pasture each year by consumers and businesses.

According to the International Association of Electronics Recyclers, about 400 million units of electronic junk, or “e-waste,” is generated annually. Most of it is thought to reside in consumers’ closets and basements — as consumers become more reticent to send their gadgets to landfills, but have no clue how to responsibly dispose of them.

“You hear people say, ‘Is this green thing a fad?'” notes Christopher J. Lynch, director of the Wharton-based Environmental Management Assistance Program. He says the last time environmental enthusiasm ran this high was in the early 1990s, when high oil prices from the first Gulf War roughly coincided with the 20-year anniversary of Earth Day. “I think this time around, it’s different,” says Lynch, who also serves with Wharton and the University of Pennsylvania’s Initiative on Global and Environmental Leadership.

With even many former skeptics acknowledging that humans do increase greenhouse gas emissions, there seems to be a longer-term focus on green initiatives, he suggests. As an adviser to private companies through Pennsylvania’s Small Business Development Centers, Lynch says more companies than ever are asking now about what they can do to green up their operations. Plus, he adds, “Everyone’s dealing with higher energy costs.”

Research firm Gartner estimates that at a minimum, 2% of global atmospheric carbon emissions can be traced to the information technology industry, because of the electricity consumed by PCs, servers, cooling systems, telecommunications and printers.

Changing the Corporate Culture

Such statistics aren’t lost on Bangalore-based IT services firm Wipro Technologies. In June, the 96,000-employee firm launched a companywide initiative called Eco Eye. It calls upon every employee to consider how his or her everyday actions impact the environment. “We firmly believe business cannot be built at the cost of ecology,” Wipro chairman Azim Premji said when announcing the plan in June. “It is not sustainable. Ecological sustainability will increasingly be the defining force for society and business globally. Wipro believes ecological sustainability is the right thing to do — in fact, it is the only way forward.”

Among other things, Wipro conducts screenings of Al Gore’s global warming documentary, An Inconvenient Truth, for employees; female employees are given burlap sacks to discourage the use of plastic bags and to have them serve as “Green Ambassadors” in their circles of social influence outside of the workplace.

“The objective is to create and spread awareness among employees and influence a gradual conversion to eco-friendly behavior,” says Swapnil Bhatnagar, a Wipro spokesman.

Using its products to reflect the corporate philosophy, the firm says it has or will launch green data centers; introduce a product called Greenware PCs, which it says is India’s first eco-friendly line of personal computers; conduct Earth-friendly product engineering; and start an e-waste disposal service for electronics that have reached the end of their useful service lives.

Why do it? Lynch says companies seem to be acting for many reasons, but a large one is simply increased awareness. There’s a greater willingness of managers now to say, “I’ve got to get on this green bandwagon.” Until late last year, small businesses almost never sought out his office on their own, looking for help with efficiency. “In the past, compliance was a driver, but now we’ve got more interest in ‘going green.'”

A Push from Europe

Helping to push this wave of eco-enthusiasm along is a standard that most Americans have probably never heard of, but is as familiar as the Clean Air Act among people in technology circles and in Europe. It’s the European Union’s Restriction of Hazardous Substances directive, which applies to electrical and electronic products for sale in EU member countries. Known as RoHS, and pronounced “ross” or alternatively, “row-haas,” the decree took effect in 2006 and forbids the use of lead, mercury, cadmium, hexavalent chromium and polybrominated flame retardants in electronic products such as computers.

“In Europe, there’s more of a willingness to move forward on environmental protection,” says Matthew White, a business and public policy professor at Wharton. “Europe has been a whole lot more willing to pay the short-term price.” That price, he added, can include higher upfront costs of enacting more aggressive regulation and subjective costs — such as aesthetic concerns about the placement of wind turbines.

The effects of the European rules have been far-reaching. While no similarly sweeping requirements exist in the United States, U.S.-based companies have made a point to comply with RoHS and to gird for possible future legislation.

The Telecommunications Industry of America, for instance, offers its members a service called EIA-TRACK — a global bill-tracking service from the Electronics Industries Association that provides members a heads-up on proposed environmental standards. Depending on a company’s revenue, annual subscriptions run from $3,000 to $17,500, for which the organization subcontracts an army of attorneys to monitor developing legislation. “They couldn’t do it on their own for anywhere near that,” says Mike Snyder, a TIA spokesman. “We’re seeing that the industry is concerned with environmental matters,” says Ellen Farmer, also of TIA. “Companies are heading in a more corporate-responsible direction.”

According to Elizabeth Grossman, author of High Tech Trash — Digital Devices, Hidden Toxics and Human Health, the industry has made considerable progress in just the past two years. When her book debuted in 2006, it exposed to the wider public some of the IT industry’s dirty laundry, such as e-waste dumping, toxic contamination of water sources during manufacturing and other dangerous practices.  “There’s actually been quite a bit of movement on the issues,” Grossman says. “When people first started talking about this, none of the manufacturers thought producer responsibility would work.”

Life-cycle Responsibility

“Producer responsibility” is the buzz-term for electronics makers reclaiming their products once they are no longer wanted, instead of placing the burden on the consumer to find a recycling program. In Europe, it’s a requirement of doing business. Now, Grossman notes, many makers of electronics include “takeback” initiatives, i.e., manufacturer-supervised recycling as part of the product lifecycle.

That’s important, Grossman says, because of the haphazard manner in which electronics have been disposed of in the past. In one common scenario, a U.S. computer “recycler” will accept junked electronics from consumers, businesses and government agencies; this “e-scrap” then gets sold to a wholesale operation, which ships the junk to China, India or another low-cost labor country. At its destination, unprotected workers in squalid conditions break apart the computers, TVs, printers and other e-waste and recover their valuable components. What can’t be salvaged — such as arsenic and lead-filled monitors — is piled up and allowed to leach into the soil and the local water supply. The shock value of films such as the Basel Action Network’s Exporting Harm, which depicted such scenes, placed a spotlight on e-waste.

Grossman says that when the film debuted in 2002 at a conference for electronics recyclers, gasps of surprise came from the crowd, many of whom were unaware the computers they collected and shipped away were causing so much suffering. Now, nearly all of the brand name computer manufacturers assiduously account for recycling done in their names. “I think that kind of primitive materials recovery is still going on,” nonetheless, Grossman says. “So much of this equipment is coming from all over the world.”

The Greening of IT goes beyond making less-harmful hardware. Firms are looking to clean up their processes and use of resources as well.

Wipro, for instance, tracks metrics such as carbon dioxide emissions per employee and per dollar of revenue, recycling versus landfill ratios and paper consumed per employee. Internet search engine giant Google is going a step beyond, having committed a “green energy czar” to the task of finding a way to create one gigawatt or more of renewable electricity at a price that’s less expensive than producing it from burning coal. Google plans to spend tens of millions of dollars each year on its renewable power project, called RE<C p way.?

The U.S. EPA estimates that data centers — the huge warehouses of server computers that process data in bulk, such as those used by Google — consume 60 billion kilowatt-hours annually, or roughly 1.5% of all U.S. electricity use.