Written by Glynn Davis
Green has over the years flitted in and out of financial institutions’ agendas. But how about the here and now? In tough times, is it high up on companies’ list of priorities? Glynn Davis reports
Wind the clock back to 2008 and green and sustainability were riding high on the agendas of most financial services firms. But the collapse of Lehman Brothers and the near-implosion of the banking system that year resulted in many firm’s mothballing their green strategies.
Alex Kwiatkowski, research manager for EMEA banking at IDC Financial Insights, says: “They made a big fanfare seven years ago and communicated their plans for reducing carbon footprints and cutting down on travel. Green IT sprang from the ground at this time when all the banks wanted to be green and it was in their annual reports. But it was a victim of timing and the crisis swept it off their agendas.”
Recent questions asked by IDC have found that banks typically do not have green IT high up on their agendas again at this stage and that it is extremely rare to find an individual whose sole responsibility is to be the green IT manager. Instead it is something that all the IT community should be aware of but, according to Kwiatkowski, there are now “few hero points to win” from being green and that will attract new customers. Of more importance is to improve operational ability, reduce costs and introduce new hardware and software that just happens to also contribute to banks and financial services firms being more sustainable and green.
“It’s not a standalone ‘let’s be green’ strategy anymore. It’s about cutting costs and showing the regulators best practice, which is then co-opted to the green agenda. Companies are interested in green IT but it’s no longer being done to get more customers,” he suggests.
Even though it sounds sensible to undertake actions that both reduce costs and improve sustainability (and such strategies have successfully been adopted by companies in other sectors including Marks & Spencer with its Plan A), Kwiatkowski says the problem for financial services firms is the “oil tanker principle”; that is to say, they are so big. “Sir Stuart Rose (former M&S chairman) is right to stress the benefits but if you look at the sorts of savings the banks need to make...Tens of millions looks good, but then it was hundreds of millions and now, what about a billion of savings?” he asks.
This has clearly been recognised by Bank of America, which has run a number of green initiatives. Mohit Sarvaiya, regional technology infrastructure executive for EMEA at Bank of America, says the bank completed a 10-year, $20 billion commitment to lending, investments, products and services focused on addressing climate change four years ahead of schedule. “To further this long-term commitment, we are continuing to support a global, low-carbon economy by embarking on a new 10-year, $50 billion environmental business initiative this year,” he says, adding that the visibility and use of sustainable business practices is becoming more common in the sector as evidenced by the increasing number of green IT rankings and awards.
Part of this new initiative involves the bank’s EMEA Green Infrastructure Technology (IT) programme; with commitments including all electronic waste streams to be disposed of using certified, responsible vendors. “Being an e-Stewards enterprise is one of our best practices – using only certified, environmentally responsible disposal vendors for electronic waste. We also roll-out recycling receptacles to select locations across EMEA and Latin America for responsible electronic device recycling and disposal,” explains Sarvaiya.
It also continues to reduce its consumption of energy by partnering with vendors that use more efficient and environmentally-friendly technology, including virtualised desktop and server solutions. EMEA Green IT has also helped reduce its datacentre footprint, servers, energy and water use across the UK. Efforts are estimated to save more than $1 million each year in electricity costs alone.
Improving the performance of the datacentres has also been an objective of Deutsche Bank in its eight-point green IT initiative that it completed in 2012, which involved doubling the utilisation of next-generation hardware. Marc Banks, lead eco-efficient IT architect in global technology at Deutsche Bank, says: “Our objective was to achieve a paradigm shift to an environmentally sustainable understanding of our IT infrastructure and lasting change in our designs, deployments and operating practices.”
IDC’s Kwiatkowski is slightly dubious of such big initiatives, suggesting nobody will check to see exactly what has been achieved from them and that they are often exercises in “grand-standing” by the companies involved. “On the one hand the company saves money, but does it mean they’re more ethical? Probably not.”
He would prefer it if they took a different approach and stated that they were making decisions based on tough market conditions, resulting in using more cloud solutions and less printing in order to be more efficient. “Yes, this is all greener and more environmentally-friendly, but they’d be doing it anyway!”
Another issue is the move to cloud that again has the possibility of being passed off as a green initiative. In this case Kwiatkowski has concerns that financial services firms are simply passing the energy usage on to the cloud provider.
“It just passes the onus on to the provider. IBM or Amazon or Google will then have to make decisions about the technology they invest in and how green it is. If the cloud gets more expensive as a result of the cost of the datacentre providers going green then it will not work,” he warns.
However, it is likely to be some years before cloud adoption will make a fundamental difference to the overall consumption of energy for financial services firms, and for now the focus is on things like ATMs, which require a large amount of power. The problem here is that the over-riding concern is for security so green does not get the focus. Barclays, however, has taken the lead with talking ATMs and the Co-operative is introducing them as well, whilst Bank of India has created solar-powered machines.
It might require a little more global warming before the UK could adopt such energy-saving devices but there is clearly an environmental benefit for any such developments, regardless of whether the banks choose to call them cost-cutting measures or dress them up as green IT initiatives.