Information Systems for Environmental Sustainability

How IT can make the world a greener place


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Business Education Jam #digitalforgreen

The Business Education Jam is being held online today (9/30) until Thursday (10/2).

Sponsored by Boston University and IBM (Financial Times article on the Jam), the goal is:

To envision the future of business education, we will focus on certain areas of interest to spark a global discussion.”

Ten topic areas (called Forums) have been identified. None explicitly refer to environmental sustainability or corporate social responsibility. There is a forum entitled “Fostering Ethical Leadership“, with questions such as “How can academia work with industry to broaden the understanding of ethical dilemmas in a global context?”

Given that analytics will be performed on all online content (comments, etc.), and given the lack of a forum on the topic  of environmental sustainability, it is possible that the analytics will conclude that environmental sustainability is not important to the future of business education (which is clearly incorrect).

So, anyone interested in corporate social responsibility, environmental sustainability, zero-waste production, supply chain transparency, smart energy, renewable resources, and related, please join the Jam and make your voice heard (thanks to Stephanie Watts at BU for bringing this issue to my attention). 


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Leverage Information Technology Trajectories to Enhance Sustainable Business

In a working paper that will be presented in a few months at the HICSS conference, I describe how leveraging technology trajectories is one of four principles of Digital Fitness. Digital fitness is how I refer to the digital capabilities and mindsets required of all organizational leaders in order to succeed in today’s chaotic digitally enabled business world.

Leveraging technology trajectories is encapsulated by the moving gears in the illustration below. IT continues to get faster, smaller, and cheaper. This leads to increasing and innovative uses to substitute away from older methods or complement existing ones. This ultimately leads to the data avalanche facing most large companies and the use of analytics and other creative software approaches to convert it into value.

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     Source: Melville, N.P. “Digital Fitness: Four Principles for Successful Development of Digital Initiatives,” paper accepted to HICSS-48, January 5-8, 2015.

 

A good example of leveraging technology trajectories in the environmental sustainability space is provided in a post on SustainableBrands by Paul Bosworth, which summarizes the critical role that data plays in driving sustainability at USPS:

Data, Data, Data

Sustainable business these days requires data, and lots of it. Companies are using sustainability data for a multiplicity of reasons: to inform corporate strategy, comply with regulations, evaluate investments, improve transparency, develop products and processes, manage risk, benchmark themselves against competitors, change organisational culture, and engage with supply chains.

Increasingly, companies that take a well-organised and data-driven approach are more likely to see investments in their sustainability programme pay off. This means using analysis to better inform decision making, leading to methodically prioritised initiatives that get off the ground far more quickly.

Once the data management programme begins to mature and data inputs are integrated that reach across a company’s financial planning databases and other operational information resources, opportunities for cost savings and revenue generation can be routinely identified and acted upon.

Driving Value From Data

My favourite example of an organisation using data to drive sustainable development is the United States Postal Service (USPS). Across 32,000 facilities, their Office of Sustainability designed an employee-led programme to address goals in waste reduction, energy conservation, fleet fuel reduction, consumables spending, recycling, and water use.

To aggregate and display relevant data, USPS developed a Green Initiatives Tracking Tool (GITT). This features dashboards that allow cost efficiencies and performance enhancements to be monitored across the organisation. The GITT system achieves this by providing status updates for core projects, as well as financial information, through direct connection with the accounting system for each facility.

GITT is also designed to be interactive. It includes a start-up list of 41 suggested projects for facilities as well as guidelines and training modules for their completion. Managers can also understand clearly what projects are in place and where via sustainability performance metrics that are triggered upon project implementation. Ready access to GITT information and comparative tables enable comparison between facilities and geographies. Most importantly, USPS can now track progress in real time at a national level and support those facilities that need additional help.

By using data aggregation and analytics, USPS was able to gain visibility into its progress on sustainability and isolate over $52m in savings in 2012 largely due to employee-led initiatives.

 

Unfortunately, as I argue in the article, too many digital initiatives fail to meet expectations. It’s my hypothesis that the lack of digital fitness is one source of these high rates of failure. If this is true, it would be interesting to refine the concept of digital fitness by studying leaders at companies that seem to excel at the intersection of IT and corporate environmental sustainability, including SAP, IBM, Danone, Intel, Nest, OPower, and Ebay. What might we learn?


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Conference Roundup: Green IS Topics at AMCIS

Several interesting Green IS papers were presented at AMCIS last week in Savannah GA.

Here’s a partial list:

It appears that Green IS scholarship is shifting from generalities to specifics, which I think is a good thing as we move out of the nascent stage and the literature slowly matures. We still need more studies that connect IS investment to environmental and financial value (more on that soon).


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Climate Risk Regulations Vs Enforced Regulations: The IT Elephant in the Room

In 2010 the SEC published “interpretive guidelines” for corporate disclosure of risks related to climate change, summarized in this table by Ceres (p. 8):

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The Interpretive Guidelines were hailed as an important step forward in providing material information to investors regarding climate change risks.

Did the Guidelines impact corporate disclosures in financial statements (10-Ks)?

Ceres analyzed all S&P 500 10-k filings from 2009 to 2013, finding that:

Most S&P 500 climate disclosures in 10-Ks are very brief, provide little discussion of material issues, and do not quantify impacts or risks. Based on this report’s 0-100 scoring scale, electric power companies received an average score of 16.7 for the quality of their SEC reporting—by far the highest industry average. Even within this group there was high variability in the quality of reporting. (Ceres, p. 5 [my emphasis in bold]).

What to make of these results?

Ceres recommends that the SEC: “devote increased attention to climate risk disclosure by issuing additional comment letters in response to inadequate disclosures, and educate registrants about how to comply with the Guidance.” (p. 28).

Regarding firms, Ceres essentially says: do a better job identifying climate risks and opportunities and disclosing these to the SEC. Ceres refers to the need for “systems, processes and controls to gather reliable information” but misses an important opportunity to address an underlying necessary condition to fulfilling SEC guidance:  implementing and managing specialized information systems for capturing, processing, and analyzing information related to energy, carbon emissions and other important environmental sustainability information.

It would be impossible for firms to comply with financial regulations without such systems, and it’s no different with environmental regulations. Imagine global corporations trying to comply with complex accounting and finance regulations using homegrown spreadsheet models developed and managed by one person: it wouldn’t work. The same applies to environmental regulations.

Here’s the bottom line.

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Guidance, regulations, board-level oversight, internal controls, emission reduction targets, management incentives, and reporting requirements are all well and good. But without addressing the IT elephant in the room – grossly inadequate information systems focused on environmental management information – I don’t foresee any significant changes in actions and impacts.


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Ceres Report – Why do Tech Companies Lead in GHG Emissions and Energy Efficiency?

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Ceres and Sustainalytics recently published “Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability.”

613 publicly traded companies were assessed on 58 indicators (governance, stakeholder engagement, disclosure, etc.).

Based on these indicators, the companies were grouped into 4 tiers based on their relative performance (tier 1 is best).

Regarding GHG emissions and energy efficiency:

More than half of the companies falling into Tier 1 for this expectation are Technology companies, including Hewlett Packard, which has not only set timebound targets for reducing GHG emissions and increasing renewable energy sourcing, but also sources more than 10 percent of its primary energy needs from renewable sources. (page 7). 

Why is this the case? The report does not elaborate on underlying causes. 

But it’s part of a larger pattern that I’ve observed (albeit anecdotally) in similar reports in recent years.

My own hypothesis is that tech companies excel in energy and GHG emissions management and reductions given their expertise in managing data and information (necessary to setting and meeting reduction objectives), combined with external pressures based on popular perceptions of energy hungry data warehouses. In essence, tech companies appear to have both the motivation and the ability to lead in energy and GHG emissions reduction efforts.

Could it be that tech companies are natural sustainability leaders? If this is the case, perhaps their strategies and tactics can be studied so that best practices can be diffused to other industries. I’ve spent much of my three-month sabbatical forming partnerships and developing projects related to these ideas. 


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New Research on Energy and Carbon Management Systems (ECMS)

Information systems for managing energy and carbon emissions data are critical to corporate environmental sustainability efforts.

Yet there is a lack of research on how these systems are adopted, used, implemented, etc.

To shed some light on this topic, I decided to explore how organizations are implementing and applying ECMS. Together with my colleague Ryan Whisnant, we looked at two different systems in two different organizations to identify patterns of use and make recommendations for practice.

Here’s the abstract and a link to the SSRN paper (a revised version of which is forthcoming at the Journal of Industrial Ecology):

This article examines an important class of information system (IS) that serves as the foundation for corporate energy and greenhouse gas accounting: energy and carbon management systems (ECMS). Investors, regulators, customers, and employees increasingly demand that organizations provide information about their organizational energy use and greenhouse gas emissions. However, there is little transparency about how organizations use ECMS to meet such demands. To shed light on ECMS implementation and application, we collected extensive qualitative interview data from two service-sector organizations: one that uses a spreadsheet-based ECMS and another that implemented an ECMS provided by a third-party vendor. Our analysis of collected data revealed numerous challenges in the areas of business processes, managerial capabilities, data capture and integration, and data quality. Though our results derive from only two organizations and require confirmation in large-sample surveys, we provide several general recommendations for organizations regarding ECMS. We also provide suggestions for future studies to build on our tentative results. Link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2411879

While this paper represents an important early step in this research stream, much more needs to be done. In particular, one of the most important next steps would be to examine the business value implications of these systems.

Continue reading


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Visit to Mauna Loa Observatory

I just returned from the Hawaii International Conference on System Sciences (HICSS) on the Big Island.

While there, I decided to take an extra day to visit the Mauna Loa Observatory (MLO) located on the Mauna Loa Volcano.

As this is a research facility, I was fortunate to get access after contacting MLO Station Chief John Barnes (Thanks John).

Here’s me at 11,141 ft, chugging more air due to the reduced oxygen content.

MLO_1

MLO is an important baseline for atmospheric CO2 measurement and is home to the famous Keeling Curve (here’s an interesting historical account from the American Institute of Physics). Physical scientist Aidan Colton showed me the original Keeling instrument and described its operation (IR spectrophotometry: measurement of reflection or transmission properties of a material as a function of wavelength). Here it is:

MLO-2

Fast-forward to the digital age, and here’s the new equipment that is better-faster-cheaper:

MLO_3

In addition to C02, I also got a great overview of solar radiation monitoring. Thanks Ben and Greg.

Concentrations of greenhouse gas CO2 in the atmosphere are exceeding 400 parts per million (ppm) for the first time in human history. Given the connection between CO2 and global warming, we are entering uncharted waters for human life on earth.

We can’t all visit Mauna Loa to see CO2 measurement first-hand. But we can collaborate to find systemic ways to reduce CO2 emissions and make daily choices that are climate positive.

HILO1

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