Eddy de Clercq is my kinda guy. A software engineer who works at a Belgian university, Eddy is widely known among his community for his sharp wit and incisive points of view. He makes the kind of connections many miss and tries really hard to live the sustainable life. This from a recent post about bottled water:

I’ve seen somebody drinking O2 water the other day. Not only it had artificial kiwi and apple flavour but also extra oxygen added. According the ‘manufacturer’, it uses patented technology from Life Technologies, Inc. to put extra oxygen into ordinary water. The resulting beverage has 10 times more oxygen (72mg) as ordinary water and provides an extra boost of energy by increasing the amount of oxygen in your blood. What a load of crap! Who needs this kind of water anyway? Nobody compos mentis does.

Eddy then goes on to rant about the resources that go into producing different kinds of bottled water and the impact it has on the environment. Given that our industry uses a LOT of water, not just to quench our individual thirst but also as a resource for data centre cooling, should we not give this apparently innocent aspect of our lives greater consideration?

Eddy has been helping me out on a sustainability project I am working upon. He may be The Grumpy Old Man, but he’s got a heart of gold. How many others might you know who fall into that category?

On a related economic note, my wife told me that a 500ml bottle of Pennine water in a local supermarket cost her 39p. The same bottle in a shopping centre not five miles distant was £1. I know there’s money in O2, I just didn’t realize there is quite so much.

Courtesy of my old mucker James Governor, I see McAfee is leading the charge in greening up its events. Reporting about a recent conference held in Las Vegas, McAfee made sure it was as close to being carbon neutral as possible. By the numbers:

In support of its environmental commitments, McAfee took steps to “green” the event in advance. According to ICF International’s measurement, through a series of event planning decisions and participant education efforts, McAfee reduced the event’s carbon footprint by 16% of its total non-air travel emissions. Specific CO2 emissions savings included:

• 25 metric tons saved by facilitating the sharing of rooms by participants
• 3.2 metric tons and 56,357 gallons of water saved through participation in the hotel’s towel and sheet reuse program
• 0.5 metric tons saved by providing a shuttle for airport and event transfers rather than travel by individual taxicabs
• 0.5 metric tons saved by eliminating bottled water and providing tap water only

“Companies who are committed to sustainability and minimizing their environmental footprint must first understand where their material impact can be made,” said Craig Ebert of ICF International. “For companies in the knowledge economy, often that material impact is in their electricity use, business travel and corporate events. We applaud McAfee for its industry leadership in corporate sustainability by conducting this in-depth measurement project, taking steps to reduce and offset the environmental impact and being transparent in sharing the results with others for the common good.”

Among the overall findings of the formal measurement project of the remaining environmental impact:

• The carbon footprint of the overall event was approximately 1,856 metric tons of CO2, or 1.03 metric tons of CO2 per event attendee
• 90% of the event’s carbon footprint resulted from air travel to and from the event
• Excluding air travel, of the remaining 10% of the event’s carbon footprint, the breakdown was as follows: food (35%), hotel rooms (33%), amenities (19%), facility use of hydrofluorocarbons (HFCs) (5%), solid waste (4%) and the event’s conference center (3%)

MacAfee used carbon offsets to compensate for the travel element, contributing to a reforestation project in Louisiana.

Ironically, James Governor’s Greenmonk is holding an Energy Camp unconference next week - in Las Vegas.

Business travel among software companies is a major contributor to CO2 emissions. One of the ways to overcome this is to organize virtual events. Like the one I recently ‘attended’ along with more than 2,000 SAP employees. Savings amounted to 724,000 km in travel alone for the three day event.

Next week I will be attending a meeting of Business for Social Responsibility in Boston. The meeting will be interesting as it is seeking to develop a framework that looks at the materiality concept as it applies to issues of importance to stakeholders.

One of the more interesting problems comes in finding the balance between what matters to stakeholders and what matters to business. What struck me from the graphic below is that in some cases, there is almost an inverse relationship between stakeholder importance of issues that get plenty of attention such as climate change risk and what influences business. Clearly there is an education process to be undertaken though the question I want answering is whether it is possible to develop software that adequately addresses both dimensions. For instance, data centre usage is high in the agenda but how might software be developed that uses less energy cycles than existing systems?

Immediately afterwards, I go to Orlando to attend SAPPHIRE, SAP’s annual customer shindig. I will be taking part in a round table discussion on issues around sustainability, a topic that is taking on increasing importance for companies like Intel, HSBC and others. Alongside this, a wiki has been opened that has the support of SAP, AccountAbility, and RedMonk in association with Business for Social Responsibility (BSR), and the International Business Leaders Forum (IBLF).

It’s first post refers to the use of Web 2.0 tools in the context of developing policies and actions that not only address issues of importance but do so in a way that allows business to prosper.

Web 2.0 revolutionizes how we regulate business, how we govern business, how we design and implement future business models, and how we innovate. But, there’s no guarantee that everyone – or anyone – will be pleased with the results of this revolution. Web 2.0 is an enabler. But what it enables is up to us and billions of other individuals.

• How do we want Web 2.0 to enable responsible business performance?
• How can we collaborate effectively to utilize Web 2.0 tools to enable stakeholder engagement and citizen voice that enhances the business and society relationship?
• How can Web 2.0 enable innovative, collaboratively generated solutions for pressing environmental, social, and governance-related issues?

In talking with OpenPages earlier this week it is abundantly clear that those businesses which understand risk management also understand that executing against risk management strategies can lead to significant business advantage. From my perspective, we can talk all day about whether it is right or wrong to undertake sustainability measures in a risk based environment but unless there is a benefit to the business then it won’t happen. I don’t expect to find definitive answers to these problems but I hope that fresh light will be shed on the nature and scale of the problems with which business has to wrestle.

I was saddened to read Miya Knights report that significant number of UK IT managers are confused or in the dark about the greening of IT. What’s worse is that:

The Datamonitor survey of 245 CIOs and IT managers found over 75 per cent considered eco-friendly computing as an important element in their IT strategy while a further 15 per cent rated it as their top IT priority.

Why should this be worse? If something is top of agenda then you’d have thought that people would know what they’re talking about. In any event, I’d argue that the baseline argument is not about ‘greening’ but sustainability. There is a huge difference. Earlier, Miya reported that:

But most of those with an existing policy (85 per cent) were more likely to outsource IT functionality. Although only 27 per cent insisted on checking the green credentials of a supplier, a further 21 per cent admitted to having no knowledge if such checks were even in place.

“Faced with these findings one has to question the current ethics of outsourcing green IT,” said Antony Young, director of Bell Micro’s services, security and networking divisions.

With respect to Mr Young, it’s not a question of ethics, unless of course he is implying that by outsourcing, UK IT managers would effectively be moving the problem from one place to another. That seems to be the implied assumption in what followed:

“It is also worth remembering that if green IT does become subject to legislation it is highly unlikely that such unregulated outsourcing would be acceptable,” he added. “UK businesses clearly must introduce more vigorous vetting procedures when outsourcing to third party organisations. What is apparent from these findings is that IT departments require a quantifiable green education and structured response.”

Legislation is NOT the answer. I am currently engaged in a project where the notion of sustainability is being baked into ideas around business process software. Business is not going to adopt sustainable measures unless it sees a tangible business benefit. Simply mandating that companies do X or Y is not the answer. You only have to look at the extractive industries to realize that the number one agenda item has not been sustainability but about the extent to which companies can push the boundaries without getting caught.

My group is proposing (among other things) that developing assurance measures that become part of provisioning processes, you encourage the business to measure and assess its sustainability credentials in a constructive and structured manner. Moving forward, we believe that assurance will provide a pathway to external assessment and audit that can usefully adopt techniques designed to assess materiality in the same way that auditors use the term when testing financial statements. Our view is that by looking at sustainability from an end to end process perspective, companies will have a far clearer picture of the impact they have, both directly and indirectly on the resources they consume. We believe this approach will work well in a horizontal fashion across a variety of business processes. However, the real challenge will be in assessing the materiality elements for any particular business. So while it is convenient to pick on IT, it may not be the primary focus in industries where consumption of water (as an example) is a significant ecological drain. Unless your name is Google.

Much has been made of the tie up between Google and Salesforce.com. At first blush the deal has much merit, especially given that Salesforce.com has done a credible job of providing solid integration with Google Apps, and specifically with Gmail, GTalk, GoogleDocs and Spreadsheets. I wonder about the compliance angle.

During yesterday’s dog and pony show in San Francisco, executives from Google were keen to talk up the work Postini has done as providing a solid, secure, data solution for large scale business. Salesforce.com is already seen as a trusted provider for business applications running in the cloud. Where’s the problem?

My analyst colleague Josh Greenbaum has questioned the extent to which Google owns your content, noting that the Terms of Service (ToS) say:

“… you grant Google a worldwide, non-exclusive, royalty-free license to reproduce, adapt, modify, publish and distribute such Content on Google services for the purpose of displaying, distributing and promoting Google services…”

IDC’s Frank Gens thinks this argument has been shot down by the Writely founders, now part of Google offering that:

Google cannot legally, and doesn’t want to, make public your private data. [Upon looking at the Google Terms, it also appears to me that Google has revised its terms to more clearly point this out.]

Like Josh, I am no lawyer but what I do know is that there is an ongoing inconsistency with Google Apps ToS which make it very difficult for the ordinary person to figure out the extent to which Google is protecting the privacy of business data and who owns what.

Right now, I defy anyone to explain to me how Google is offering to protect business data when, in its ToS it says in regard to Google Docs:

“You retain copyright and any other rights you already hold in Content which you submit, post or display on or through, the Service. By submitting, posting or displaying the Content you give Google a worldwide, royalty-free, and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through the Service for the sole purpose of enabling Google to provide you with the Service in accordance with its Privacy Policy.”

The link for this was lifted directly from Frank’s post and I can find no difference between what it says now and what Josh was referring to.

Google’s business model depends on being able to aggregate data it collects through its cloud computing platform. That provides it with the basis upon which it can display targeted advertising. No-one I know is concerned about this element of the implicit deal you do when you use Google’s free apps. It is the: “non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content” that causes concern. That is because these additional ‘terms’ appear to override Google’s otherwise transparent approach to general privacy. These general terms were last updated in October, 2005.

Elsewhere, Mike Arrington of TechCrunch notes that Google is trying to distance itself from its ‘Do No Evil’ moniker. I’m sure it is. As commercial businesses grow it is very difficult to live up to ideals of this kind. But if Google, which otherwise generally tries hard to be a good partner, is incapable of revisiting its ToS, then you have to ask: Will your data be compliant if it is in the Google cloud? At least one questioner at yesterday’s show put exactly that point to Google exec Dave Girouard, asking if Google will be (for example) HiPAA compliant. There was no clear answer.

My sense is that Google hasn’t thought this through, or if it has, then its lawyers are incapable of figuring out a wording that doesn’t destroy the business model of ‘free for ads.’ This is an issue that won’t go away any time soon. If you’re a smaller business then you may not be so concerned. But if you’re part of a supply chain where data is exchanged that might include emails and IM chats with larger third parties that are subject to compliance standards, then you need to think about this.

A recent report entitled The State of Green Business, 2008 is packed with facts and figures that make heartening reading for anyone concerned with governance.

I was particularly struck by the laggardly growth in CSR reporting, that despite:

Customers, investors, and stakeholders are demanding increasingly greater accountability and transparency from companies on environmental and social issues. They want to know what companies are, and aren’t, doing, warts and all.

The report says that even though the Global Reporting Initiative is now reasonably well established, growth in meaningful CSR reporting has barely grown 50 per cent among Fortune 100 companies in the US in the last five years. That’s around two-thirds of the total that could be reporting. Among those reporting since 2002: Intel, HP and Motorola. The report says that:

Initially, companies largely focused on environmental, health, and safety indicators because those were areas where regulations already required disclosure. But the GRI forced many corporations to look more broadly at other areas of corporate policy and performance, such as product responsibility, supply chain issues, sourcing, governance, diversity, and social issues.

When I survey the reporting scene, it is apparent that many companies find it very difficult to figure out how the framework applies. In Doing Good: Business and the Sustainability Challenge, companies are said to be “at the baby steps stage” as concerns sustainability issues because “business people recognize their importance, but when it comes to the practical question of what they mean to the organization, there is a lot of confusion”. Ever that was so. James Farrar put a more positive gloss on the report:

If I am to make one criticism of the EIU study it is that it did not go far enough to explore strategic value drivers by key industry to drive a more granular debate on strategic sustainability management…

So what does this mean for the tech sector? In many respects the sustainability pioneers of the private sector came from the extractive industry and often borne out of crisis. Sustainability 2.0 will be driven forward by innovation and market forces. Business models will be reinvented to tap into more environmentally efficient and socially inclusive markets. For sustainability 2.0 to be successful more will be demanded of the entire tech industry in serving as both exemplar and enabler.

I hope James is right but given the difficulties we are already seeing in operating a framework that has horizontal meaning, let alone in verticals, it seems there is a long way to go. The software industry could point the way, offering standard methods of arriving at certain measures. Right now that’s being tackled in an ad hoc manner and I would prefer to see the major players coming together and picking off relatively ‘easy’ measures as examples to pave the way. Whether we will see that kind of cross party meeting of minds is another matter.

What I am confident is that as a market, CSR and GRC combine could well be larger than the ERP market.