- Study by Deutsche Telekom, Huawei, SAP, Siemens and The Boston Consulting Group: With smart ICT solutions, CO2 emissions can be reduced by 207 megatons by 2020
- Greatest potential in the transport and logistics industry and in building management
- Business volumes for environmentally-friendly ICT solutions around EUR 84 billion
Up to 25 percent of all emissions of CO2 or equivalent hazardous substances (CO2e) – equivalent to 207 megatons (Mt) – can be saved in Germany by 2020 by the use of information and communications technology (ICT). This is the finding from the study entitled "SMART 2020 Deutschland." It identifies the ICT sector as the driving force on the road to sustained climate protection. This study was carried out jointly by Deutsche Telekom, Huawei, SAP, Siemens and The Boston Consulting Group. The business value of so-called SMART energy-saving concepts in the ICT sector is estimated at up to EUR 84 billion by 2020.
As one of the leading industrialized nations, Germany is among the world’s largest emitters of the pollutants that are responsible for global climate change. Although the information and communications technology sector accounts for only a small proportion of the emissions, it also offers a considerable climate protection opportunity for other branches of industry, such as transport and logistics and electricity generation. While ICT can make savings of 13 Mt in CO2e emissions in its own sector, potential reductions of 194 Mt can be achieved in other industries in 2020 by the general deployment of ICT.
The SMART concept used in the study stands for five factors that make this reduction possible: S tandardization, M onitoring, A ccountability, R ethinking and T ransformation.
Direct contribution of ICT towards reducing CO2e emissions The ICT sector can make a direct contribution towards climate protection by reducing its own emissions. By producing 23 Mt of CO2e in 2007, the industry was responsible for around 2 percent of emissions in Germany. The constantly increasing importance of ICT in business and private households means that this figure will rise to around 3 percent by 2020. With the aid of various "green ICT" measures, the study forecasts that these emissions can be reduced by more than 50 percent – equivalent to 13 Mt of CO2e in the year 2020. Need for action in five sectors – main potential for CO2e reduction in logistics and building management The study also identified five core areas in which ICT solutions can help to make significant reductions in emissions: building management (Smart Buildings), logistics (Smart Logistics), electricity generation (Smart Grid), industrial automation (Smart Motors) and dematerialization. The study finds that total annual CO2e emissions in these areas can be reduced by around 194 Mt over the next ten years.
With possible savings of up to 85.4 Mt of CO2e in the year 2020, the logistics sector, which also includes road transport, offers the greatest potential. Promising business models to reduce pollutants that damage the climate include the intelligent management of traffic flows and the introduction of an ICT-based urban toll. In building management, emissions of up to 41.8 Mt of CO2e can be saved, through climate management systems, for example. In industrial automation, the study estimates the potential reductions at 26.4 Mt CO2e, while it sees possible savings totaling 23.6 Mt of CO2e in the electricity industry. Finally, the dematerialization of products and services, e.g. limiting business travel by the use of videoconferences, offers potential reductions of 16.3 Mt of CO2e. In each case, the study indicates the theoretical maximum possible reduction. However, the development of the market alone produces a realistic potential of just 64 Mt of CO2e – a "gap" of around 130 Mt of CO2e.
Creating the conditions to reduce CO2e emissions To close this gap between the theoretical maximum potential reductions and the market-driven reality, business models are needed that significantly reduce CO2e emissions and are also commercially attractive. Policy-makers can also help to create suitable conditions to enable the widest possible access by consumers to new low-emission business concepts. The study identifies four ways in which business and policy-makers can work together to overcome the existing social, economic, legal and technical barriers to a nationwide implementation of these business concepts:
- Joint information campaigns to inform the public about the ways in which they can help to reduce emissions
- Public financial support to ICT companies for efforts to make business concepts more attractive to end-customers, e.g. by way of uniform technical standards
- Levies, such as special charges and taxes, to motivate end-customers and companies to deploy emission-reduced business concepts
- Legal standards for environmentally conscious behavior, e.g. in climate management systems for buildings
Although Germany is already playing a leading role in the worldwide battle against global warming, the study concludes that there is still untapped potential to make permanent reductions in greenhouse gases with the aid of the ICT sector. If these opportunities are to be exploited, both ICT companies and the government have to play their part.
You can find the complete study at: www.gesi.org
Companies involved: Deutsche Telekom AG is one of the world’s leading integrated telecommunications companies with almost 150 million mobile customers, around 40 million fixed-network lines and over 17 million broadband lines. Its product brands are T-Home (fixed-network telephony, broadband Internet), T-Mobile (mobile communications), and T-Systems (ICT solutions). As an international Group with over 261,000 employees operating in around 50 countries worldwide, Deutsche Telekom generated more than half of its revenue – 61.6 billion euros – outside of Germany in 2008.
Huawei is a leading provider of innovative solutions for next-generation telecommunications networks. 36 of the world’s 50 leading network operators are customers of Huawei. The company’s products and services are used by more than a billion people around the world. Huawei sees it as its mission to provide innovative, made-to-measure products, services and solutions to create lasting added-value and growth for its customers. In the 2008 financial year, Huawei signed contracts worth USD 23.3 billion. Around 75 percent of its sales of products and services are now to businesses outside Chinas in over 100 countries around the world. SAP AG , based in Walldorf, Germany, is the world’s leading provider of business software and services, which companies of all sizes in over 25 industries can use to shape their business processes towards growth and profitability. More than 92,000 customers in over 120 countries now run SAP applications. Founded in 1972, SAP is now the world’s third-largest independent software vendor, with offices in more than 50 countries. In the 2008 financial year, the company generated revenues of EUR 11.6 billion. SAP is listed on several exchanges, including the Frankfurt Stock Exchange and the New York Stock Exchange (NYSE: SAP).
Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. The company has around 410,000 employees (in continuing operations) working to develop and manufacture products, design projects, systems and equipment, and tailor solutions for individual requirements. For over 160 years, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. In the 2008 financial year, the company generated revenues of EUR 77.3 billion (in IFRS terms), with after-tax profits of EUR 5.9 billion. The Boston Consulting Group (BCG) is an international management consultancy and a world leader in the field of corporate strategy. BCG assists companies from all sectors and regions to exploit growth opportunities and adapt their business models to new conditions. BCG develops individual solutions in partnership with its customers. The shared goal is to create sustained competitive advantage, enhance the company’s performance and improve results in the long term. BCG was set up in 1963 by Bruce D. Henderson and now has 66 offices in 38 countries. The company is wholly owned by its directors. In Germany and Austria, BCG’s 847 consultants generated revenues of EUR 369 million in 2008.