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2013 was a busy year for sustainability activities: more companies purchased more green energy, we saw advances in wind and solar penetration and efficiency, “natural capital” became a better defined and more prominent phrase, and environmental reporting continued to spread to more companies. At Microsoft we made progress as well – from signing our very first power purchase agreement for renewable energy, to developing novel software tools for ecosystem modeling, to improvements in how we manage and report our company’s carbon emissions, to expanding the types of offset projects we invest in. However, I can’t help but feel that we are still just scratching the surface.
As the chief environmental strategist at Microsoft, I am always interested in understanding not only where our partners and customers are investing today, but where they are hoping to invest in the coming years. For me, it’s an incredible opportunity to ensure that Microsoft continues to be on the leading edge of implementing sustainability in our own operations and with our partners around the world. As I look ahead to 2014, there are a handful of themes that we see taking shape that are likely to dramatically transform the role of ICT in sustainability – here’s the top five:
1. ICT Arrives as a Sustainability Strategy for Enterprises:
As a technologist, it is not surprising that this would be my top pick for 2014. For years we have seen a slow, but steady, increase around the awareness and early adoption of ICT for sustainability. Over 5 years ago, GeSI put forth a SMART2020 report highlighting the sustainability opportunities of ICT. While 2013 saw significant advances in the breadth and effectiveness of solutions built on cloud computing (and an updated report from GeSI dubbed SMARTer2020), we are still a long way away from mainstream adoption of ICT for sustainability. 2014 will see the beginning of the transition from early adoption to mainstream use of ICT-based solutions.
2. Green Energy and the Power of Procurement:
Despite expiration of some tax incentives here in the US, demand for green energy will only continue to grow. Companies and governments are increasingly seeking out, and investing in, low or zero carbon energy sources. Last month the Obama Administration ordered federal agencies to consume 20 percent of energy from renewable sources by 2020, doubling the renewable energy purchased by the federal government. Twenty-seven states and the District of Columbia have renewable energy portfolio standards. Last year numerous companies in the private sector committed to sizable purchases of green energy. Increasingly, these decisions are being made by procurement departments, and not sustainability departments. Why? Because operating teams within large companies see green energy as an opportunity for controlling costs. That’s a sign that we are driving sustainability into mainstream operations.
3. Smart Buildings Investments Will Increase Dramatically:
Cities will be the dominant, but not the only, area of increased investment on ICT-enabled smart buildings. We have all seen the numbers and reports in 2012 and 2013: More than half the world’s population lives in cities today, and it will reach two-thirds by 2050. A full 70 percent of the world’s greenhouse gas emissions comes from cities. But what is new are the advances happening in technologies that make it easier and more impactful to leverage ICT to change energy use in cities. Microsoft, our partners and our competitors, are all investing significantly more in this space than ever before. And landlords increasingly recognize that while LEED-designed buildings are great, realizing their potential requires that those well designed buildings are well run. We know from our own experience that even LEED gold or platinum buildings can still experience significant efficiency gains when coupled with smart building management systems. And, low capital costs, coupled with minimal work-flow disruption, suggest that 2014 will see a number of major real estate management and ownership companies and cities begin deploying smart building management systems at a much more rapid pace.
4. Finding New Ways to Measure Natural Capital:
Natural capital represents a significant opportunity for the planet and for business, but there’s a major challenge: Natural capital is notoriously difficult to measure and price accurately. As a result, decisions that are ecologically and economically damaging are often made because of the lack of good modeling. This is, in part, what led to oil and gas drilling in the Ecuadorian rainforest rather than preserving it. However, advances in computational power and improved modeling will enable more momentum around better valuing natural capital. As part of these advances, there is ecosystem modeling being developed by Microsoft Research and others. 2014 won’t see a transformation yet, but it will see a shift in thinking and approaches as enterprises, governments and NGO’s get far more sophisticated in leveraging data to better understand the real value of their natural capital.
5. Nexus of Food, Energy and Water Will Emerge
While we are seeing the start of a growing awareness of how ICT will transform agricultural and resource efficiency in food production, 2014 will see a significant shift as major companies begin deploying pilots around the world. This trend is not a one-year prediction, but this coming year will see the start of a transformation in agricultural and food production processes. In addition, as major companies like Monsanto invest heavily in new solutions, we can expect to see a flurry of ICT-related advances in this field in 2014.
There are many other trends that will also either continue or emerge in 2014 – increased shareholder pressure and scrutiny, increased regulations on energy sourcing and water and land use, ongoing conflict on land use in developing nations, more advances in climate and weather modeling, and both advances and retractions on clean energy investments. However, the biggest impact areas that ICT will drive will be the result of markets where the corporate, government, and citizen interests combined with the capabilities of advances in cloud computing and reduction in information gathering will naturally combine to transform resource use around the world.
2014 promises to be an exciting year for sustainability and technology!