Green IT:

The Financial Services Industry Benchmark

An international perspective

02

This paper compares the Green IT maturity of financial services institutions in four countries: the United States of America, the United Kingdom, Australia and India. It utilizes a unique methodology to quantify Green IT implementation across the many different components and compares the performance of the financial services industry to other industries, using the Green IT Benchmark.

An international perspective

table of contents Executive Summary The Green IT Global Benchmark How financial services compares to other industries The United Kingdom The United States of America Australia India Case Study Conclusions and Recommendations Acknowledgements 4 5 6 8 9 10 11 12 14 15

03

Executive Summary

The financial services industry is one of the largest users of IT. Banks, insurance companies and financial institutions typically run massive IT systems that are at the heart of their day-to-day operations.
Like all IT systems, these financial engine rooms use significant amounts of energy. As a proportion of total energy usage, IT energy consumption is more significant in financial services than any other industry. This means that institutions in the financial services industry have the most to gain from making their IT operations more energy-efficient. There are many ways this can be achieved; from purchasing equipment that has low levels of embedded carbon in its manufacture, to greater efficiencies in their IT operations (especially in the data center), through to ensuring IT equipment and other forms of e-waste are disposed of in an environmentally friendly manner. IT also has an important enabling role to play in reducing the institutions' overall greenhouse gas (GHG) emissions. Despite ITs importance to the financial services industry, this paper shows that financial services performs, overall, slightly better than the cross-industry average in the maturity of its Green IT operations. The financial services industry performs above the national average in the United Kingdom (UK) and the United States of America (USA) and on or below the national average in Australia and India. In most cases the differences are not substantial, and globally the financial services industry performs slightly better than the cross-industry average in implementing Green IT technologies and techniques. The analysis in this paper constitutes what we believe to be the most comprehensive analysis ever undertaken of the relative maturity of Green IT in the financial services industry. It demonstrates that, on average, the financial services industry can perform much better in implementing Green IT into its operations. Green IT comprises many different aspects; it is not all about technology in many cases improvements can be made with simple changes of policy or practice. Increasingly, IT practitioners are realizing that the general term Green IT is about specific areas of operation, and that the key driver is cost. Energy costs, as a proportion of IT budgets, are increasing substantially in most countries. Green IT is an obvious, and easy, way to improve the bottom line. This paper highlights areas where financial services can achieve this, by concentrating on IT efficiencies. It includes a case study from a leading Australian bank that has greatly improved their operations and environmental performance while saving energy costs, through the intelligent application of Green IT.

Alison Rowe Global Executive Director Sustainability

04

The Green IT Global Benchmark

This report uses the methodology developed by Connection Research and RMIT University to develop a standardized Green IT Readiness Index. The results allow the development of an overall index for IT-using organizations in any industry or country. The methodology allows separate indices to be calculated for each of the five key areas of Green IT: Green IT Lifecycle (Procurement and Disposal) End User IT Efficiencies Enterprise and Data Center IT Efficiencies Usage of IT as a Low-Carbon Enabler Green IT Measurement and Monitoring These areas are outlined in Figure 1, The Green IT Framework.
Figure 1

the Green it Framework

05

How financial services compares to other industries

Figure 2 below shows the overall Green IT Index across all industries for all 638 organizations surveyed in all four countries. Financial services, with an overall Green IT rating of 57.3, performs only marginally better than the overall index, of all organizations in all countries, of 56.4. It is an average performance, given the importance of IT in the operations of organizations in the financial services industry.

Overall Financial Services performs just above the average benchmark compared to other industries providing significant opportunity for improvement due to scale.

Figure 2

Green it index by industry All Countries

IT / Comms / Media Professional and Other Services Utilities and Construction Manufacturing Financial services All Industries Government Health / Education / Welfare Wholesale / Retail / Logistics 0 10 20 30 40

62.6 60.0 59.6 58.1 57.3 56.4 54.2 52.3 51.1

50

60

06

Figure 3 illustrates how the financial services industry compares for each country to the cross-industry average in each of the five areas of Green IT defined by the Green IT Framework. As noted above, financial services performs slightly better than the overall average above average in the UK and USA, on average in Australia, and below average in India. The best performing country is the UK, which also has the highest overall Green IT rating.
Figure 3

Financial Services in the UK is leading the way.

Green it index Financial services vs All industries by Country 70 60 50 40 30 20 10 0 UK

Financial Services

63.8

61.0

60.3

58.6 53.9 53.9 51.1 52.0

57.3 56.4

USA
All Industries

Australia

India

All Countries

07

Green IT Benchmarking Comparisons

the united Kingdom Financial institutions in the UK perform better than the UK cross-industry average, and significantly better than the all countries financial services average, in every aspect of Green IT. In most cases the performance lead is significant, indicating a higher degree of overall Green IT maturity in the UK. The UK performance is testament to the relatively high ratings the UK achieves in Green IT across the board, and to the attention given to the subject amongst UK financial services institutions. The UK has the most stringent carbon reduction and carbon reporting regime of any of the countries. In all areas, and particularly in metrics, there is scope for implementing practices and technologies that will further boost performance.

UK Financial Services leads in every aspect of Green IT. In particular their performance in End User computing can be considered best practice.

Figure 4

uK Green it Benchmarking Comparisons 70 60 50 40 30 20 10 0 Lifecycle

UK Financial Services 66.9 63.3 59.5 69.3 68.2 62.1 65.8 62.6 61.4 62.1 60.6 55.5 54.8 50.2 47.8

63.8

61.0 57.3

End User

Enterprise

Enablement

Metrics

Green IT Index

UK All Industries

All Countries Financial Services

08

the united states of America In the USA the average Green IT indices of organizations in the financial services industry exceed that of both the USA cross-industry average, and the all countries financial services average. The only exception is Enterprise, where the USA is marginally below the all countries financial services average. This is a good result overall, but given the figures are reasonably low, there is considerable room for improvement. This is particularly the case in the area of metrics, the lowest performing index and an important precondition to effective and efficient Green IT. The slight underperformance in Enterprise in US financial institutions indicates a significant opportunity, given that data centers in the USA tend to be larger than in other countries. The US EPA (Environmental Protection Authority) has developed a rating system for data centers, and has identified data centers as a critical area for energy savings.

In the USA Financial Services performs better than the average except in the area of Enterprise.

Figure 5

usA Green it Benchmarking Comparisons 70 60 50 40 30 20 10 0 Lifecycle

USA Financial Services 65.3 64.8 59.5

63.3

63.4

62.1

60.6 59.5 61.4

58.7

60.3 55.8 55.5 51.9 51.2 47.8

58.6

57.3

End User

Enterprise

Enablement

Metrics

Green IT Index

USA All Industries

All Countries Financial Services

09

Green IT Benchmarking Comparisons

Australian Financial Services is tracking below average except for quick wins in the End User environment.

Australia In Australia the financial services industry performs at or below the Australian cross-industry average, and below the all countries financial services average, in Lifecycle, Enterprise and Enablement. It is above average only in End User, and while it performs better than the Australian average in Metrics, it is still lower than the all countries financial services average in this area. The results indicate that in many cases Australian financial institutions have undertaken quick wins at the end user level, such as turning PCs off at night, which is an important aspect of Green IT. However, using IT for Sustainable business, with a stronger focus on fundamental Green IT issues in Enterprise or Enablement, will result in considerable improvement. Whilst Australia has an advanced financial services industry that is a sophisticated user of IT, this does not extend to Green IT. Australian financial institutions are generally below organizations in other industries when it comes to implementing Green IT techniques and technologies.
Figure 6

Australia Green it Benchmarking Comparisons 70 60

59.5

63.2 62.3 62.1

59.2 59.2

61.4 55.5 49.1 51.5 47.8 43.7 40.6 57.3 53.9 53.9

50 40 30 20 10 0

54.5

56.1

Lifecycle

End User

Enterprise

Enablement

Metrics

Green IT Index

Australia Financial Services

Australia All Industries

All Countries Financial Services

10

india Similar to Australia, Indian financial services institutions are below the all countries financial services average in all areas of Green IT. In particular End User computing is significantly lower which demonstrates opportunity for immediate quick wins and cost savings. However, performance is slightly higher than the Indian cross-industry average in the areas of End User, Enterprise and Enablement. These results are largely a reflection of Indias relatively low overall performance in Green IT. Note that the results are only from financial organizations in the Mumbai area, where IT operations are for the most part comparable to those in Western countries. There is substantial room for improvement, in all aspects.

Indias strength is in the area of Enterprise, specifically data centers.

Figure 7

india Green it Benchmarking Comparisons 70 60

59.5

62.1

60.0 59.1

61.4 55.5 57.3 51.1 52.0 47.8 44.7 41.0

50
51.1

53.8

51.3 50.3

52.2 52.0

40 30 20 10 0 Lifecycle End User Enterprise Enablement

Metrics

Green IT Index

India Financial Services

India All Industries

All Countries Financial Services

11

Case Study Bankwest

This data center will enable Bankwest to continue to develop and refine new and innovative ways of banking that will benefit our million-plus customers across Australia. It will also enable us to significantly reduce our carbon footprint.
Andy Weir, Chief information Officer of Bankwest

Bankwest the customer Country: Australia Industry: Finance Founded: 1895 Website: www.bankwest.com.au To ensure the correct data center facility was selected to meet growing data, storage and regulatory requirements as well as delivering energy efficiency and state of the art technology. An advanced environmentally sustainable data center with security technologies that deliver maximum efficiency. Savings of approximately 20 percent on in-house data center costs 30 percent less energy 80 percent less water usage

the challenge

the solution

the benefits

In November 2010 Fujitsu, together with Bankwest, announced the opening of Australias most advanced and environmentally sustainable data center in Perth, Western Australia. the challenge As the leading Western Australian financial institution, Bankwest was looking for an efficient and secure local data center facility that could offer the appropriate security and energy efficiency to meet their growing data, storage and regulatory requirements.

12

the solution Bankwest chose to take advantage of Fujitsus brand new data center in Perth. Considered Australias most advanced, environmentally sustainable data center, it will deliver significant energy savings, while ensuring Bankwest continue to meet all of their customer and regulatory requirements for security and privacy. (This data center) also allows us to progress consolidating and migrating our critical systems into the new facility over the next 12-18 months. It is a very significant investment and underlines our continued commitment to the Western Australian community and will ensure we continue to meet all our customer and regulatory requirements for security and privacy, said Andy Weir, Chief Information Officer of Bankwest. the benefits The Perth facility offers Bankwest savings of approximately 20 percent on in-house operational data center costs. It contains sophisticated building control management systems that remotely monitor and adjust power settings throughout the complex. It incorporates biometric and other security technologies to deliver maximum efficiency and superior data integrity and resilience. The facility also features sophisticated metering capabilities to support Bankwests compliance with energy legislation. The new data center consumes 30 percent less energy than standard facilities and its cooling system saves up to 80 percent in water use. The advanced design features include a hybrid cooling system which allows free cooling over approximately eight months of the year. This potentially decreases the cooling load by up to 50 percent. The use of ultrasonic humidifiers delivers further cost advantages, as they require only 20 percent of the energy of traditional units. The end result is a data center that is more efficient, which is cheaper to run, and which satisfies all of Bankwests operational and security needs. The installation is a good example of Fujitsus active commitment to environmentally sustainable computing. Fujitsu has actively applied and promoted environmental principles since the introduction of its Environmental Protection Program in 1993. It has been recognized as a member of the Dow Jones Sustainability Index since its inception in 1999. In Australia, Fujitsu aims to save its customers over a quarter of a million tons of greenhouse gas emissions by 2012 from its outsourced data center operations. Bankwest is just one example.
(this data center) will also enable us to reduce our carbon footprint. Andy Weir, Chief Information Officer, Bankwest.

13

Conclusions and Recommendations

The Financial Services industry is uniquely placed to reap the benefits of Green IT.

Green IT, in all its forms, is becoming more important for all organizations. It is not a luxury but a key cost saving activity. Strategically adopting Green IT results in energy-efficient IT, at a time when the cost of electricity is rising; as is its visibility as a significant component of the IT operational budget. This is particularly true in the financial services industry, where IT is so integral to operations. In no other industry is IT more energy intensive. Financial institutions typically run large data centers and all employees are end users. IT permeates the financial services industry from top to bottom, any efficiencies that can be achieved and any cost savings that can be found, will have more effect due to scale in the financial services industry. The findings of this report indicate that for financial institutions significant opportunity exists to make IT operations efficient, and make significant savings in energy consumption and carbon emissions. There has been some improvement in recent years; in Australia, the only country where data exists for Green IT maturity in previous years, the financial services industry has improved from one of the lowest performing industries to now at the cross-industry average. The analysis in this paper shows that the single area of Green IT where financial organizations can make the most improvement is Metrics in measuring how well they are performing in areas such as energy efficiency and carbon emissions. Measurement is a precondition to effective energy and emissions management. That is one of the reasons for the development of the Green IT Benchmark used in this report by comparing organizational behavior across industries and across countries, it highlights areas of comparative strengths and weaknesses. Green IT is not a single action, policy or technology. It comprises a number of aspects, in a number of different disciplines. It is best implemented through a holistic approach, in areas as diverse as procurement, end user operations, data center management, and applications implementation. And the greatest savings are potentially not within the IT department, but in the use of IT to enable greater efficiencies across the whole organization, in terms of reduced energy consumption, lower carbon emissions and greater operational efficiency. The financial services industry is uniquely placed to reap the benefits of Green IT. Information systems are central to its operations, and the data in this paper shows the unrealized potential. In many cases there are simple solutions, and in virtually all cases there are many opportunities for improvement and savings to be made.

14

Acknowledgements

Fujitsu would like to thank the many people and organizations involved in the production of this report. We would particularly like to thank the CIOs and senior IT managers who responded to the survey upon which it is based. We appreciate the time constraints they face, and without their assistance the exercise would not have been possible. We would also like to thank Connection Research for providing research expertise, and for analyzing and interpreting the results. About Fujitsu Fujitsu is a leading global service provider of business, information technology and communications solutions. In more than 50 countries around the world Fujitsu partners with customers to consult, design, build, operate and support business solutions. From strategic consulting to application and infrastructure solutions and services, Fujitsu has earned a reputation as the single supplier of choice for leading corporate and government organisations. Fujitsu is a global leader is sustainability, listed on the Dow Jones Sustainability Index since inception and holds worldwide ISO 14001 certification. For further information visit www.fujitsu.com

About Connection Research Connection Research is a market research and consultancy company specialising in the analysis of sustainability issues. Services are provided in Consumer and Community Sustainability, Green IT, Building Industry and Trades and Carbon and Compliance. Connection Research undertakes primary research (surveys of users, trades people, suppliers, practitioners), conducts market modeling analyses (combining our primary data with other sources) and consultancy in these fields. For further information visit: www.connectionresearch.com.au

15

Fujitsu AustRALiA AND NEW ZEALAND LiMitED

Level 16, 15 Blue Street, North Sydney NSW, 2060, Australia Tel. +61-2-9113-9200

www.fujitsu.com/au
Printed on Mega Recycled, an environmentally responsible paper, 50% Recycled - Post consumer waste and 50% FSC Certified fibre, ISO 14001 EMS Accreditation