Embracing circular economy to achieve sustainability goals
Enterprises everywhere must begin making the changes necessary to embrace the circular economy to allow them to achieve sustainability goals.
This was one of the central messages of the recent HPE Sustainability Summit in Dublin.
According to Maeve Culloty, managing director, HPE Ireland, the conversation has changed from some years ago, when sustainability had fallen down the corporate agenda.
“Are we seeing a pull in the marketplace today? We absolutely are,” she said.
“As customers, as partners, we need to have a strategy around IT sustainability practices.”
Culloty highlighted the growing data deluge, as well as changing enterprise architectures, as drivers of the need for change in how IT is procured, deployed, managed and, critically, disposed.
Over provisioning, underutilisation and lack of visibility has meant that enterprise architectures have deep inefficiencies which can be addressed with better solutions to reduce consumption and improve the possibilities of re-use and recycling of IT equipment.
Sustainability, said Culloty, is now back on the corporate agenda, citing organisations who are setting themselves goals in alignment with the United Nation’s Sustainable Development Goals (SDG). She said non-financial material disclosures are increasingly being mandated and voluntarily reported.
Advocates and problem solvers
Chris Wellise, chief sustainability officer, HPE, said that this year’s Davos conference was characterised by a growing expectation that corporations need to become advocates and problem solvers in this area, not waiting for government to act.
Fortune 500 companies are making big commitments to sustainability, said Culloty, and the ‘win-win’ is going to be when government and corporates combine.
In many cases, said Culloty, it is now the CEO leading the sustainability message.
CIOs are trying to understand what sustainability goals would look like in their operation, she said. To make IT sustainable, you have to look at the entire model and that goes into procurement.
According to Ray McGann, sales leader, HP Financial services, most companies are not geared up, from an accounting perspective, for the kinds of measures necessary to facilitate true IT sustainability practices.
Accounting policies drive our usage policies, said McGann, that is no longer a viable solution if we want to adhere to sustainability.
“Challenging your CFO might be a hard thing to do,” he admitted, “and they have a very strong view as to how we use capital. Part of our jobs as vendors, partners, customers and manufacturers, is to sit with the financial organisation and explain how we see the shift in the marketplace.”
Culloty highlighted that currently, there is little reporting, or indeed, coherent strategy around IT sustainability efforts.
She cited a survey by HPE, where 80% of respondents said that they do have some kind of sustainability reporting, but less than 20% said they had an IT sustainability policy and practice.
IT employees are demanding more and demanding a policy around IT sustainability, said Culloty.
HPE has invested in software-defined infrastructure, Culloty said, to help with these goals.
“We believe your infrastructure footprint should be getting smaller and smaller, and redefined with a software layer that sits on it.”
Recent acquisitions, such as Nimble, and other developments has allowed the company to make a broad commitment to have its entire enterprise portfolio available as a service by 2022.
HPE is striving to get ahead of market demand for easier to manage, more flexible options, and for more and more to be consumable as a service.
McGann cited IDC figures that said 80% of IT infrastructure will soon be bought on a pay-as-you-go basis. Furthermore, consumption-based procurement in data centres will account for 40% of enterprise IT spend.
Wellise developed this further when he talked about the rise of edge computing to meet the demands of information generation in the future.
He cited Gartner research that suggests by the end of 2023, 75% of data created will be at the edge. This shift is compounded by research which suggest that by 2025, 80% of enterprises will have shut down their traditional data centre, versus less than 20% currently.
Wellise argued that it makes more sense to do at least of the data processing close to the edge, in an effort to maintain efficiency and reduce power consumption.
From an energy perspective, said Wellise, this is really interesting, because it takes nearly an order of magnitude more energy to move data to where it needs to be processed, than to process it.
Wellise said that efficiency is a key aspect of IT sustainability, and could be addressed under three headings. Equipment efficiency means running equipment at the highest levels of operational capacity; energy efficiency means operating at least amount of energy necessary; and resource efficiency is requiring the least amount of support equipment and personnel to run IT operations. This in conjunction with the adoption of a circular economy approach, is what is necessary to yield results.
“There is a lot of buzz around the circular economy,” said Wellise.
Circularity starts with material sourcing, he argued.
Design is critical, he added. About 85% of the environmental impact of a product, from a server to a washing machine, can be addressed at design time.
Since 1992, he said HP engineers have designed for the environment, with conscious efforts to ensure ease of disassembly, recycling, and re-use. There are also major efforts to examine and limit energy use within manufacturing process.
In the circular economy, said Wellise, refurbishment for extended use is the goal, with recycling being seen as a last resort.
Only when no further use can be derived is recycling considered, he said.
HPE has more than 20 years experience in this area, and has two major plants dedicated to refurbishment for remarketing and recycling, one in Andover, Massachusetts, and one in Erskine, Scotland.
In 2018, 23.6 million kilos (58 million pounds) of equipment was processed. The vast majority (89%) was remarketed, with just 11% recycled, representing more than 4 million units. These broke down into 1.7 million data centre products, and 2.3 million workplace products, according to HP Financial Services data.
McGann said that HPE, through its solutions such as GreenLake, its financial supports through HP Financial Services, and consultancy through Pointnext, can help organisations to make the operational, financial and strategic shifts necessary to become sustainable for the longer term.
He highlighted the reporting frameworks available that allow genuine comparisons to be made between organisations, but also how a vendor such as HPE could offer information on how similarly sized organisations, or comparable operators in a vertical are fairing in metrics. This would allow organisations to not only report in a transparent manner, but also allow them to see how well they are doing overall.
Wellise said that the drive to do more is being felt across the industry and resonates with deeply held beliefs within HPE. He said a quote from 70 years ago characterises it well.
“The betterment of society is not a job to be left to a few. It’s a responsibility to be shared by all,” said HP founder David Packard.
He added that under the leadership of CEO Antonio Neri, himself an engineer, the highlighted responsibility is a purpose that is understood and practised from the top down.