PWC On Tech Sector Going Green: Efficiency, Ambivalence and Pretty Pictures

PwC is to be congratulated at the very least for the aesthetics of their latest report: Going Green: Sustainable Growth Strategies. This is a truly handsome report with pretty brown coloured text interspersed with striking images of wind turbines, sail boats, happy children, adults playing in autumn foliage and even slightly more obscurely, a flamenco dancer.

PwC is to be congratulated at the very least for the aesthetics of their latest report: Going Green: Sustainable Growth Strategies. This is a truly handsome report with pretty brown coloured text interspersed with striking images of wind turbines, sail boats, happy children, adults playing in autumn foliage and even slightly more obscurely, a flamenco dancer. I’m gently ribbing PwC here – many of us are a little guilty of presenting the climate change crisis with utopian imagery. Although Freud might have a field day figuring it all out, the masking accurately represents the superficial, ambivalent and confused state of thinking at this tipping point. Apparently executives continue to genuinely struggle to orchestrate, within the constraints of the market, a rational response to the sustainability question.

The tech sector is no less confused with 70% of surveyed executives convinced the tech industry does little or no harm to the environment yet 61% believe it is important that their companies take action to reduce their foot print leading PwC to ask:

is the pursuit of anything green by the technology industries little more than a feel-good exercise resulting in higher costs and possibly insignificant environmental benefits?

So what is the driving all this sentiment and is the green boom sustainable? Executives expect green to be an increasingly important factor in the procurement decision. Yet 70% of tech industry executives believe that although customers say they want green products they are highly resistant to paying extra. This consumer ambivalence is taxing the wits of marketers everywhere. A spokesperson for a US based computer maker explained the conundrum:

The challenge, she says, is “to try and fathom whether this is your customer’s core belief, as is often the case with individuals, or whether it’s the desire to be perceived as environmentally conscientious, as is often the case with businesses.” It’s a subtle distinction, she says, “but it’s an important one as you’re developing product appeals and brands.

Interesting to note a separate report from PwC out last month which asserts the ‘going green’ marketing revolution got started in the blogosphere in 2006 and became a pervasive conversation by 2007. Not totally unconnected, employee sentiment is also a driving issue with grass roots green initiatives increasingly touted as the hallmark of a progressive employer. So is all this green marketing only hubris?

When it comes to brass tacks, the top business driver for going green in the tech industry is energy efficiency followed by regulatory compliance or fear of future regulatory action. The survey also shows that energy efficiency is the number one R&D priority for the industry over the next two years.

Still it is clear at least in the B2B market and there is a mandate for environmental performance in the purchase decision making process and this is especially true of public sector customers. But tensions over who exactly should pick up external costs are never far from the surface. Peter Zeven, CEO of Philips Electronics North America commenting on mandatory take back programmes:

If you read a newspaper, you throw it in the trash. When you finish with a tire, you throw it in the trash. Why then is it the manufacturer’s full responsibility and cost if you finish with a television?

Coverage of the software sector was weak in this report and PwC missed a trick to more fully explore the role software can play. We learned about Microsoft’s Live Meeting and energy saving settings for Vista but then, inexplicably, we were treated to detail about inter campus eco friendly transport arrangements at Redmond. Laudable, but hardly material or relevant to a discussion on software solutions for climate change. Although I am bias here (see my disclosure) I was disappointed PwC did not consider the contribution enterprise software can make in this space in helping industry become more resource efficient and transparent to public stakeholders along dimesnsions from regulatory compliance through to carbon labeling and emissions trading.

My take on all this: this report shows the tech industry like everyone else buffeting in the winds of change from climate change. Sure, the tech sector may account for 3% of total CO2 although arguably that 3% is helping to make other parts of the economy more efficient through productivity gain and dematerialization. And yes, the manufacturing and services side of the tech business can do its bit to become more eco efficient. But the industry shouldn’t navel gaze too long - the other 97% of the economy needs all the innovative focus and ingenuity the tech sector can bring to bear. Consumer sentiment maybe a little flaky but over time this will certainly harden up into pervasive market demand.

The skepticism I detect in the PwC report is well placed. Similarly last week at the Economist Sustainability conference in London I sensed consensus that the euphoria around green marketing was tipping towards more realism. After the low hanging fruit have been picked, we settle into the long haul struggle to reinvent and renegotiate our economic structures and not just for eco efficiency but also other connected aspects of sustainability including human rights, economic development and transparency. This is when and where the tech sector can make its best mark for sustainability.