Transcript of a discussion on how more companies are seeking sustainable resources improvement by adopting Circular Economy principles to make the most of their existing IT and business assets.

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How BT Makes IT and Technology
Sustainability a Business Advantage
Transcript of a discussion on how more companies are seeking sustainable resources
improvement by adopting Circular Economy principles to make the most of their existing IT and
business assets.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett
Packard Enterprise.
Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of
the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor
Solutions, your host and moderator for this ongoing discussion on digital transformation
success stories.
Our next use of sustainable resources improvement interview examines how more
companies are plunging into the circular economy to make the most of their existing IT
and business assets. We’ll now hear how more enterprises are optimizing their IT kit and
finding innovative means to reduce waste -- as well as reduce energy consumption and
therefore their carbon footprint.
Stay with us now as we learn how a circular economy
mindset both improves sustainability as a benefit to
individual companies as well as the overall environment.
Here to help us explore the latest approaches to
sustainable IT is William McDonough, Chief Executive of
McDonough Innovation and Founder of William
McDonough and Partners. Welcome to the show,
William.
William McDonough: Thank you, very much.
Gardner: We are also here with Gabrielle Ginér, Head of
Environmental Sustainability for BT Group, based in
London. Welcome, Gabrielle.
Gabrielle Ginér: Hi, there.
Gardner: William, what are the top trends driving the need for reducing waste,
redundancy, and inefficiency in the IT department and data center?
McDonough: Materials and energy are both fundamental, and I think people who work
in IT systems that are often optimized have difficulty with the concept of waste. What this
is about is eliminating the entire concept of waste. So, one thing’s waste is another
thing’s food -- and so when we don’t waste time, we have food for thought.
McDonough

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A lot of people realize that it's great to do the right thing,
and that would be to not destroy the planet in the process
of what you do every day. But it's also great to do it the
right way. When we see the idea of redesigning things to
be safe and healthy, and then we find ways to circulate
them ad infinitum, we are designing for next use --
instead of end of life. So it's an exciting thing.
Gardner: If my example as an individual is any
indication, I have this closet full of stuff that’s been
building up for probably 15 years. I have phones and
PCs and cables and modems in there that are outdated
but that I just haven’t gotten around to dealing with. If
that’s the indication on an individual home level, I can hardly imagine the scale of this at
the enterprise and business level globally. How big is it?
Devices designed for reuse
McDonough: It’s as big as you think it is, everywhere. What we are looking at is design
is the first signal of human intention. If we design these things to be disassembled and
reusable, we therefore design for next use. That’s the fundamental shift, that we are now
designing differently. We don’t say we design for one-time use: Take, make, waste. We
instead design it for what's next.
And it's really important, especially in IT, because these things, in a certain way, they are
ephemeral. We call them durables, but they are actually only meant to last a certain
amount of time before we move onto the next big thing.
If we design your phone in the last 25 years, the odds of you using the same phone for
25 years are pretty low. The notion that we can design these things to become useful
again quickly is really part of the new system. We now see the recycling of phone boards
that actually go all the way back to base materials in very cost-effective ways. You can
mine gold at $210 a ton out there, or you can mine phone boards at about $27,000 a
ton. So that’s pretty exciting.
Learn How to Begin
Your IT
Circular Economy Journey
Gardner: There are clearly economic rationales for doing the right thing. Gabrielle, tell
us why this is important to BT as a telecommunications leader.
Ginér: We have seen change in how we deal with and talk to consumers about this. We
actually encourage them now to return their phones. We are paying for them. Customers
Ginér

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can just walk into a store and get money back. That’s a really powerful incentive for
people to return their phones.
Gardner: This concept of design for reuse and recovery is part of the cradle-to-cradle
design concept that you have helped establish, William. Tell us why your book, Cradle to
Cradle, leads to the idea of a circular economy?
Reuse renews the planet
McDonough: When we first posited Cradle to Cradle, we said you can look at the
Earth and realize there are two fundamental systems at play. One is the biological
system of which we are a part, the natural systems. And in those systems waste equals
food. It wants to be safe and healthy, including the things you wear, the water, the food,
all those things, those are biological nutrients.
Then we have technology. Once we started banging on rocks and making metals and
plastics and things like that, that’s really technical nutrition. It’s another metabolism. So
we don't want to get the two confused.
When we talk about lifecycle, we like to refer it to living things have a lifecycle. But your
telephone is not a living thing -- and we talk about it having a lifecycle, and then an end
of life. Well, wait a minute, it's not alive. It talks to you, but it's not alive. So really it's a
product or service.
In Cradle to Cradle we say there are things that our biology needs to be safe, healthy,
and to go back to the soil safely. And then there is technology. Technology needs to
come back into technology and to be used over and over again. It's for our use.
And so, this brings up the concept we
introduced, which is product-as-a-service.
What you actually want from the phone is not
4,600 different kinds of chemicals. You want a
telephone you can talk into for a certain period
of time. And it's a service you want, really.
And we see this being products-as-services,
and that becomes the circular economy.
Once you see that, you design it for that use. Instead of saying, “Design for end-of-life. I
am going to throw it in a landfill,” or something, you say, “I design it for next use. That
means it’s designed for disassembly. We know we are going to use it again. It becomes
part of a circular economy, which will grow the economy because we are doing it again
and again.
Gardner: This approach seems to be win-win-win. There are lots of incentives, lots of
rationales for not only doing well, but for doing good as companies. For example,
Hewlett Packard Enterprise (HPE) recently announced a big initiative about this.
You want a phone you can talk
into for a certain period of time.
… It’s a service you want …
products-as-services, and that
becomes the circular economy.

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Another part of this in the IT field that people don't appreciate is the amount of energy
that goes into massive data centers. The hyperscale cloud companies are investing
billions of dollars each a year in these new data centers. It financially behooves them to
consume less energy, but the amount of energy that data centers need is growing at a
fantastic rate, and it’s therefore a larger percentage of the overall carbon footprint.
William, do carbon and energy also need to be considered in this whole circular
economy equation?
Intelligent energy management
McDonough: Clearly with the issues concerning climate and energy management, yes.
If our energy is coming from fossil fuels, we have fugitive carbon in the atmosphere.
That's something that's now toxic. We know that. A toxin is material in the wrong place,
wrong dose, wrong duration, so this has to be dealt with.
Some major IT companies are leading in this, including Apple, Google, Facebook, and
BT. This is quite phenomenal, really. They are reducing their energy consumption by
being efficient. They are also adding renewables to their mix, to the point that they are
going to be a major part of the power use -- but it's renewably sourced and carbon-free.
That’s really interesting.
When we realize the dynamic of the energy
required to move data -- and that the people
who do this have the possibility of doing it with
renewably powered means – this is a
harbinger for something really critical. We can
do this with renewable energy while still using
electricity. It's not like asking some heating
plant to shift gears quickly or some
transportation system to change its power
systems; those things are good too, but this industry is based on being intelligent and
understanding the statistical significance of what you do.
Gardner: Gabrielle, how is BT looking at the carbon and energy equation and helping to
be more sustainable, not only in its own operations, but across your supply chain, all the
companies that you work with as partners and vendors?
Learn How to Begin
Your IT
Circular Economy Journey
Ginér: Back to William's point, two things stand out. One, we are focused on being
more energy efficient. Even though we are seeing data traffic grow by around 40 percent
When we realize the dynamic of
the energy required to move
data – and that the people who
do this have the possibility of
doing it with renewably powered
means – this is a harbinger for
something really critical.

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per year, we now have nine consecutive years of reducing energy consumption in our
networks.
To the second point around renewable energy, we have an ambition to be using 100
percent renewable electricity by 2020. Last year we were at 81 percent, and I am
pleased to say that we did a couple of new deals recently, and we are now up at 96
percent. So, we are getting there in terms of the renewables.
What's been remarkable is how we
have seen companies come
together in coalitions that have
really driven the demand and
supply of renewable energy, which
has been absolutely fantastic.
As for how we work with our suppliers like HPE, for example, as a customer we have a
really important role to play in sending demand signals to our suppliers of what we are
looking for. And obviously we are looking for our suppliers to be more sustainable. The
initiatives that HPE announced recently in Madrid are absolutely fantastic and are what
we are looking for.
Circular Economy Report
Guide Users Toward
Circular Economy
Gardner: It’s great to hear about companies like BT that are taking a bellwether
approach to this leadership position. HPE is being aggressive in terms of how it
encourages companies to recycle and use more data center kit that’s been
reconditioned so that you get more and more life out of the same resources.
But if you are not aggressive, if you are not on the leadership trajectory in terms of
sustainability, what’s the likely outcome in a few years?
Smart, sustainable IT
McDonough: This is a key question. When a supplier company like HPE says, “We are
going to care about this,” what I like about that is it’s a signal that they are providing
services. A lot of the companies -- when they are trying to survive in business or trying to
move through different agendas to manage modern commerce -- they may not have
time to figure out how to get renewably powered.
But the ones that do know how to manage those things, it becomes just part of a service.
That’s a really elegant thing. So, if a company like HPE says, “Okay, how many
problems of yours can we solve? Oh, we will solve that one for you, too. Here, you do
What’s been remarkable is how we have
seen companies come together in
coalitions that have really driven the
demand and supply of renewable energy.

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what you do, we will all do what we do -- and we will all do this together.” So, I think the
notion that it becomes part of the service is a very elegant thing.
Gardner: A lot of companies have sustainability organizations, like BT. But how closely
are they aligned with the IT organization? Do IT organizations need to create their own
sustainability leaders? How should companies drive a more of the point of the arrow in
IT department direction?
McDonough: IT is really critical now because it’s at the core of operations. It touches all
the information that’s moving through the system. That's the place where we can inform
the activities and our intentions. But the point today is that humans, as we see artificial
intelligence (AI) coming in, we have to remember there is this thing called human
intelligence that goes with it, and there is a natural intelligence that goes with being in
the world.
We should begin with our values of what is the right thing to do. We talked about what's
right and wrong, or what’s good and bad. Aristotle talked about what is less and more;
truth in number. So, when we combine these two, you really have to begin with your
values first. Do the right thing, and then go to the value, and do it all the right way.
And that means, let’s not get confused. Because if you are being less bad and you think
it's good, you have to stop and think because you are being bad by definition, just less
so. So, we get confused.
What we really want to be is more good. Let’s do
less bad for sure, but let’s also go out and do
more good. And the statistical reference points for
data are going to come through the IT to help us
determine that. So, the IT department is actually
the traffic control for good corporate behavior.
Gardner: Gabrielle, some thoughts about why sustainability is an important driver for BT
in general, and maybe some insights into how the IT function in particular can benefit?
Ginér: I don't think we need a separate sustainability function for IT. It comes back to
what William mentioned about values. For BT, sustainability is part of the company’s
ethos. We want to see that throughout our organization. I sit in a central team, but we
work closely with IT. It’s part of sharing a common vision and a common goal.
Positive actions, profitable results
Gardner: For those organizations planning on a hybrid IT future, where they are
making decisions about how much public cloud, private cloud, and traditional IT --
perhaps they should be factoring more about sustainability in terms of a lifecycle of
products and the all-important carbon and energy equation.
The IT department is actually
the traffic control for good
corporate behavior.

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How do we put numbers on this in ways that IT people can then justify on that all-
important total cost of ownership and return on investment types of factoring across
hybrid IT choices?
McDonough: Since the only constant in
modern business life is high-speed
change, you have to have change built into
your day-to-day operations. And so, what
is the change? The change will have an
impact. The question is will it have a
positive impact or a negative impact? If we
look at the business, we want a positive impact economically; for the environment, we
would like to have a positive impact there, too.
When you look at all of that together as one top-line behavior, you realize it’s about
revenue generation, not just about profit derivation. So, you are not just trying to
squeeze out every penny to get profit, which is what's leftover. That’s the manager’s job;
you are trying to figure out what’s the right thing to do and bring in the revenue, that’s the
executive’s job.
The executives see this and realize it’s about revenue generation actually. And so, we
can balance our CAPEX and our OPEX and we can do optimization across it. That
means a lot of equipment that’s sitting out there that might be suboptimal is still
serviceable. It's a valuable asset. Let it run but be ready to refurbish it when the time
comes. In the meantime, you are going to shift to the faster, better systems that are
optimized across the entire platform. Because then you start saving energy, you start
saving money, and that’s all there is to it.
Circular Economy Report
Guide Users Toward
Circular Economy
Gardner: It seems like we are at the right time in the economy, and in the evolution of
IT, for the economics to be working in favor of sustainability initiatives. It’s no
coincidence that we are seeing at HPE that they are talking more about the economics
of IT as well as sustainability issues. They are very closely linked.
Do you have studies at BT that help you make the economic case for sustainability, and
not just that it's the good or proper thing to do?
Ginér: Oh yes, most definitely. Just last year through our Energy Efficiency Program, we
saved 29 million pounds, and since we began looking at this in 2009-2010, we have
saved more than 250 million pounds. So, there is definitely an economic case for being
energy efficient.
If we look at the business, we want
a positive impact economically; for
the environment, we would like to
have a positive impact there, too.

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Gardner: I’m afraid we’ll have to leave it there. We have been exploring how more
companies are plunging into the circular economy to make the most of their existing IT
and business assets. And we have learned how a circular economy mindset both
improves sustainability as well as enhances the ability of companies to adapt to change
and put in more of a hybrid IT-factored economic benefit.
So please join me in thanking our guests, William McDonough, Chief Executive of
McDonough Innovation and Founder of William McDonough and Partners. Thank you,
sir.
McDonough: Thank you.
Gardner: We have also been joined by Gabrielle Ginér, Head of Environmental
Sustainability for BT Group, based in London. Thank you, Gabrielle.
Ginér: Thank you, very much.
Gardner: And a big thank you to our audience for joining this BriefingsDirect Voice of
the Customer digital transformation success story. I’m Dana Gardner, Principal Analyst
at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-
sponsored interviews.
Thanks again for listening. Please pass this on to your IT community, and do come back
next time.
Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett
Packard Enterprise.
Transcript of a discussion on how more companies are seeking sustainable resources
improvement by adopting circular economy principles to make the most of their existing IT and
business assets. Copyright Interarbor Solutions, LLC, 2005-2019. All rights reserved.
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