Green issues reshaping business strategies
Updated: 2007-12-26 15:00
[The authors Michelle Kam, Yang Chengbin, Chris Harreld and Sun Lijun are researchers and consultants at the IBM Institute for Business Value, China.]
Environmental issues like greenhouse gas emissions, energy consumption and water and air pollution have become a major concern in China.
Heightened environmental concerns are reshaping the nation's approach to economic and social development, pressuring Chinese companies to manage environmental impact as effectively as other business operations.
Since China joined the WTO and won the right to host the 2008 Olympic Games, government and business leaders have been pursuing environmental investment and raising awareness. They realize that in today's world of global interconnectivity, companies that remain in an environmentally unfriendly mode of operation are not going to reach full potential.
In our report, "Green China: Leveraging innovative technologies and solutions to uphold companies' environmental responsibilities", we argue that companies can maximize the opportunities associated with incorporating environmental considerations into their business strategies.
Technology is a critical factor contributing to successful planning and implementation of environmental initiatives. While modern pollution detection and control equipment are critical in optimizing resource use and reducing pollution discharge from the core production process, advanced computing technologies can substantially reduce power consumption in data centers and by IT equipment in a typical office environment.
Furthermore, environmental technologies are not limited to operations within one company, but rather can allow for data collection, analysis and environmental performance management in extended organization networks like suppliers and business partners.
Heavy polluters can implement a comprehensive environmental management system to drive environmental protection initiatives.
The system provides a mechanism to facilitate continual improvement in environmental performance, bringing about enormous benefits and, more importantly, preventing environmental hazards that could result in substantial damage to company reputation and financial loss.
Successful implementation of such a management system requires a high degree of commitment, proactive communications and training, and alignment of the existing processes and structure with environmental improvement and risk management initiatives.
Also, a sound technical infrastructure, including effective pollution prevention and abatement and monitoring facilities, and an effective management information system to collect, integrate and analyze information and generate reports, are critical to effective environmental impact management.
Incorporating operational energy efficiency into a company's overall business strategy will facilitate progression toward a reduction in the environmental impact and cost of business operations.
One specific area of current focus is energy efficiency. From an IT standpoint, data center power consumption continues to receive significant attention. Maximizing computer power use through technological breakthroughs such as server consolidation and virtualization is one approach to optimizing energy efficiency.
Our report found that if Chinese companies could achieve a 10 percent energy reduction on all IT facilities, the savings could supply the entire 2008 Beijing Olympic Games, as well as reduce China's carbon footprint by 2.5 million tons.
Chinese companies that incorporate environmental considerations into business strategy and operations will be at the forefront of changing markets and contribute to strengthening the long-term sustainability of the Chinese economy.
A company's environmental impact and management initiatives are now a major factor for consumers, corporate partners and investors - so the potential benefits are enormous.
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