Dana Gardner's BriefingsDirect: Jun 19, 2022

As businesses worldwide seek to maximize their value to their customers and communities, the total value equation has expanded to now include the impact on sustainability for the environment.

The ways that companies, along with their partners, suppliers, and employees best manage and govern their resources and assets speaks volumes about their place among peers. And it allows them to take a leadership position as stewards and protectors of the future. The sooner the world’s industries develop a commitment to reach a net-zero carbon emissions posture, for example, the better for everyone in gaining environmental sustainability.

Stay with us as BriefingsDirect examines how Hewlett Packard Enterprise (HPE) has newly accelerated its many programs and initiatives to reduce its carbon emissions, conserve energy, and reduce waste -- including far earlier net-zero dates and more impactful emission-reduction milestones. Learn here how HPE’s newest living progress report provides a blueprint for other organizations in and outside of the HPE orbit to also hasten and improve their sustainability efforts.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

Here to share the latest on HPE’s plans and goals for broad and lasting sustainability is John Frey, Chief Technologist, Sustainable Transformation at HPE. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: How does HPE define ESG and how long has it been working toward improving its impacts across these goals?

Frey: To make sure everyone knows what we mean when we say ESG, that’s actually an acronym for environmental, social, and corporate governance. This is language that was first used by investors in the financial community, and now it’s used much more broadly to emphasize that when we discuss sustainability. We mean more than just the environmental aspects. We mean the social aspects as well.

Frey

From HPE’s perspective, we’ve named our ESG programs Living Progress, and that’s really our business strategy for creating sustainable and equitable technology solutions for a data-first world. These efforts are tied to our corporate strategy and our purpose, which is to advance the way people live and work.

Our programs go back many, many years. In fact, back in 1957 when our program started, the program was called Corporate Citizenship and it was based around how HPE would grow beyond the borders of the United States. We have a long history of leadership as Hewlett Packard. When Hewlett Packard and Hewlett Packard Enterprise became two separate companies, we adapted the best practices at that point in time and then built our Living Progress programs around that.

Our programs today have three main elements -- driving a low carbon economy, investing in people, and operating with integrity. We have goals across that entire spectrum of sustainability and throughout the lifecycle of our products.

Gardner: It’s very impressive that you have been doing this for going on 65 years. How has the world changed more recently that has prompted you to accelerate, to even dig in deeper on your commitments here?

Frey: Climate change is one of the greatest threats to our common future. We recognize that we have limited resources and lots of impacts that are complex societal and environmental challenges. At HPE, we believe that addressing climate change is not only a moral imperative; it is also a business opportunity as we innovate technology to help our customers thrive in this carbon-constrained world.

Years ago, we set our goal to be net-zero by 2050, and it was backed up by science-based targets throughout our entire value chain. When we set this goal, it was clear leadership. However, the Intergovernmental Panel on Climate Change (IPCC)’s most recent reports indicate that going to net-zero by 2050 is not fast enough. We have to accelerate our goals.

HPE has committed to becoming a net-zero enterprise across our entire value chain by 2040. Our commitment is backed by our roadmap to net-zero, which consists of a science-based targets.

Therefore, HPE has committed to becoming a net-zero enterprise across our entire value chain by 2040. Our commitment is backed by our roadmap to net-zero, which consists of a new suite of science-based targets that are consistent with that one-and-a-half-degree pathway and approved by the Science Based Target Initiative.

We set those interim targets and longer-term targets. Our interim targets for 2030 include reducing our scope-one and scope-two emissions by 70 percent and reducing our absolute scope-three emissions by 42 percent, both off of a 2020 baseline. And that scope-three target includes the use of our products by our customers, upstream transportation and distribution, and scopes one and two supplier emissions. Our longer-term target for 2040 is to reduce the absolute scopes one, two and three emissions by 90 percent off of that 2020 baseline as well.

Getting to these targets will require a fundamental transformation in everything we do. Our leaders need to be accountable for driving this and we’ve tied key climate metrics to executive compensation. We will need to ‘walk the talk’ and procure 100 percent renewable energy for our own operations while at the same time helping our customers and suppliers bring new renewables to the grid where they operate.

And most importantly, we’ll enable our customers to meet their own net-zero ambitions. This is important, because about two-thirds of our climate impact on the globe occurs when our customers use our technology solutions. So HPE is putting our innovation engine into action to develop more sustainable IT solutions while working closely with our customers to help optimize their IT infrastructure so that they can meet their own net-zero goals.

Gardner: That’s very interesting when you say nearly two-thirds of the climate impacts happen in your customer base from the use of your solutions. Can you expand on that? What does that mean?

Sustainability demands change

Frey: When we think about our footprint across the company, a small single-digit percentage is because of our own operations, our buildings and our employees and employee travel and those sorts of things. Around a third of it then is our supply chain – when we bring products to the market and when we take those products back from customers at their end of life. But the bulk, nearly two-thirds of our climate impact on the globe is when our customers use our technology products.

Learn More About

HPE's Living Progress Initiatives.

For us to help our customers get to net-zero and for HPE to lower our own carbon emissions across our entire portfolio means that we really must help our customers use their technology more efficiently. So that really gets to things such as helping them right-size the amount of technology they have, increasing the performance they get from the technology for each watt. We have to help them continue to optimize in real time their technology so that it uses the lowest amount of energy and does the most work at the same time.

Gardner: It’s no exaggeration to say that it’s technology that’s going to come to our aid, but it’s technology that we need to, in a sense, solve.

Frey: Absolutely. In fact, we think of technology as a force multiplier for solving climate challenges. Technology really enables a lot of these solutions, and it also facilitates a lot of clean energy innovation as well.

Gardner: What are some of the major hurdles that need to be overcome to achieve this? It’s quite a bit to bite off and chew.

Frey: Yes, absolutely. Experts estimate that about half of the carbon reductions that the world needs to achieve net-zero emissions in the coming decade will come from technologies that don’t even exist yet. So that’s challenging. And in fact, if we look at just the companies that have made net-zero commitments already, we don’t have enough capability in terms of renewable energy and carbon offsets and things to even cover those commitments.

Technology can be an enabler here. HPE is spending a tremendous amount of effort innovating with solutions such as HPC technologies that are used by climate scientists and clean energy researchers.

So that is a huge challenge, but technology can be such an enabler there. HPE is spending a tremendous amount of effort innovating with solutions such as our high performance computing technologies that are used by climate scientists and by clean-energy researchers who are trying to find better ways to bring those solutions to market. With our customers, who are using our professional services and our technology services, instead of buying assets, we help them right-size the technology they need, we help them manage their technology from the edge to the cloud and optimize all the way through that.

Lots of opportunity. I prefer to think in terms of the positive, rather than the hurdles, which I think of as business opportunities. But what I can say from my experience working with our customers around the globe is many of our customers are really fixated on trying to help solve these challenges, many of our customers see great business opportunities in trying to help fix these challenges, and they’re all turning to technology as the enabler of that innovation.

Gardner: Yes. I’ve heard it said elsewhere. You can do quite well as a business by doing good for sustainability in the economy.

Frey: Absolutely. We fully agree with that.

Gardner: It seems like HPE has taken quite a lead here, but it involves more than just you the company. It affects your supply chains, as you’ve mentioned, your customers, your partners. So how do you characterize HPE’s role in that larger community? Are you an example to follow, maybe a facilitator, an educator accelerating growth of potential, or all of the above?

Our example: Fail fast, then innovate again

Frey: We really play all of those roles. In some cases, we are an example that others point to and say, “Hey, we’re not going down this path alone. HPE has gone down this path.” In many cases, we’re an educator and will share with customers this long sustainability journey that we’ve been on, the lessons we learned. Often, it’s better to learn from what someone who has been down the path said they would never do again, or what they learned from their journey. We so often focus as a sustainability community on the things that went well. Yet, there’s a lot of lessons learned, and we really try from an HPE perspective to take a ‘fail fast and then innovate again’ approach. We’re constantly learning, and that education has great value.

In many cases, there’s a need for a facilitator. We know that these challenges exist across many industries, but there isn’t a central body pulling together multiple stakeholders and multiple customers to help solve that challenge. A couple of examples of that are organizations such as the Responsible Business Alliance (RBA).That’s an organization that HPE helped found years ago. We realized when we were auditing factories in our supply chain that these factories were building products for other technology companies as well. So, the factories were following our expectations in the lines building HPE products but may not have been protecting workers adequately in some of the other lines. When we took a step back and said, “Well, why is that?” We were told, well, that other vendor doesn’t make us do these things, and we said, “Well, wait a minute. That’s actually not the right answer.”

If we’re really trying to make sure that workers in our supply chain are being treated fairly, paid a living wage, have their health and safety protected, and are protecting the environment that’s a non-competitive issue. So, we took a step back and formed what was then called the Electronic Industry Citizenship Coalition (EICC) and invited companies in our industry to come together to have a common set of expectations for our suppliers and then put in place assurance programs. Well, that was so successful, other industries came to us and said, “Could we adopt that same practice for our industry?” Today, the organization that does all of that is called the Responsible Business Alliance. And so, it’s having a huge impact on supply chains around the world, but all started because there was that need for a facilitator to bring companies together.

Another great example of that is the Clean Energy Buyers Alliance (CEBA). As more and more companies started making renewable energy commitments, we realized that to get the scale we needed in the pricing for renewable energy, we could do so much together as an alliance, have common procurement expectations and get better pricing.

Learn More About

HPE's Living Progress Initiatives.

One of the ways I talk about it is catalytic collaboration. How do we bring voices to the table that may not have been heard before? How do we think from an innovation and an accelerator perspective much broader than just for example, publicly traded companies coming together? How do we bring in the voice of stakeholders and customers and governments? So, in all of these ways, HPE plays a variety of roles trying to accelerate the world’s progress to solve these big challenges.

Gardner: John, it seems no matter where you live, you’re getting a steady stream of reminders about why this is important. It could be wildfires, hurricanes, permafrost melting, rising sea levels. But on the other hand, this has been a challenge for many of the rates of increase to be met or reduced. So, what are the risks for businesses if they don’t make sustainability a priority?

Ignore environmental impacts at your own risk

Frey: Well, there’s a variety of risks, but let’s start with the business risk. The missed market opportunities. Businesses cost more and they can lose customers. One of the things we know about sustainability is that in many cases it’s about preventing waste, and waste has a cost associated with it. At the same time, we find customers increasingly saying that they want to do business with companies who have strong reputations, who have strong social and environmental programs, and companies that have a purpose and assist in making the world a better place.

In all those ways from a business perspective, customers are watching what companies do, and they’re making purchase decisions based on the attributes of the companies that they want to do business with. Frankly, if you’re not being a sustainability leader or at least keeping up with your industry, you’re going to start missing many of those market opportunities.

Customers are watching what companies do, and they're making purchase decisions based on the attributes of the companies that they want to do business with. If you're not a sustainability leader, you're going to miss market opportunities.

Another one could be, and we hear this from many of our customers, in this increasingly difficult time that we live in, finding employees is very challenging. Employees want to work for a company where they can see how what they’re doing contributes to the company’s purpose. And so that’s another opportunity that they miss.

I’ll just give you a sense. We had International Data Corporation (IDC) do a survey for us last year. We asked technology executives across several countries why they were investing in and participating in sustainable IT and sustainability programs in their technology operations, and what they told us was really interesting. The digital leaders, those companies that are the innovators and the fast movers said that they were investing in sustainability programs to attract and retain institutional investors.

Now, the companies in the middle, the digital mainstream said they were doing it to attract and retain customers and the digital followers. Those companies that move a little slower are not quite as far in their own digital transformation said they were doing it to attract and retain employees. So, there’s a variety of business reasons to do this. Increasingly, there are regulatory reasons as governmental agencies start asking companies to talk about things that are either material from a financial perspective, such as we’re seeing here in the U.S. with the proposed Securities and Exchange Commission (SEC) regulations or other places around the world where there are regulatory reporting reasons to make sure that you have strong sustainability programs because you have to disclose data to a regulatory agency.

Gardner: Do you have any examples or use cases for how sustainability leadership moves beyond reputation to be a driver of business growth, which, as you said is one of the chief reasons to embrace sustainability fully?

Frey: There are a variety of opportunities. We’ve seen it ourselves. For example, in the last year, we’ve had over 1,400 customer inquiries asking HPE about our own sustainability and social and environmental programs whether it relates to our products or whether it relates to our business. That’s just one example of the way customers are paying attention and they’re asking increasingly in-depth questions. It used to be questions such as, “Do you have your own sustainability program, yes or no?” Then it moved into “Are you using some of the various standards that show us that you’re managing this as a process and as a system across your business?” Now, they’re asking us questions all the way down to “Tell us the carbon footprint of this product or solution that HPE is bringing to the market.”

Now, what we know is when we have good answers to that and we share expertise with customers, we tend to do much better from a business perspective as well, and customers want to do business with us. We certainly see on our own that there are lots of opportunities for additional value by having the strong programs.

Gardner: All right. Are there any even more specific examples of how HPE has helped customers to improve their businesses while also accelerating sustainability improvements? Do we have some concrete examples of how this works in practice?

Win-win: Great business and ESG results

Frey: Yes, I’ll give you just a few. Wibmo is India’s leading digital payment provider, and they use a variety of HPE technologies, but they wanted to consider moving to a much more flexible technology we call HPE Synergy, which is a composable infrastructure. What that really means is that you have compute, storage, and networking in a common chassis that shares power supplies and gives you great scalability. It gives you a pool of resources that the customer can tap from, and what Wibmo really wanted to do was move from a blade infrastructure to that Synergy infrastructure to increase their capability to respond very quickly to changing customer requirements. As we did that for them, to give them the same capability, reduced their IT capital expenditures by 80 percent, reduced their creation and delivery of new accounts from weeks to hours and it lowered their carbon footprint by 50 percent. So, we observed great business outcomes and great environmental outcomes coming from the work with that provider.

Now, another one was Nokia Software, and they’re an HPE GreenLake customer, which is our as-a-service offering. Nokia has always been progressive around their environmental objectives, and they wanted to strive for a carbon-negative data-center operation, and one of the things they wanted to do to achieve that was using a renewable energy source. They wanted to take water from a nearby Finnish lake to cool the data center. They wanted to move to liquid cooling and using renewable energy sources to power that data center. HPE was able to help them do that. One of the great things about HPE GreenLake is that because it’s consumption-based, we help customers tailor the infrastructure to their needs without additional equipment that is sitting there and not doing any work. We enable them to reduce their capital expenses and reduce their environmental footprint at the same time.

Gardner: Let’s talk next about one or two examples of how technology accelerates environmental change, not just from the IT perspective, but perhaps other views that are more data driven and offer the capability to exercise more efficiency, and more ways when you’ve got a data driven organization from edge to Cloud.

Learn More About

HPE's Living Progress Initiatives.

Frey: I’ll give you two quick examples. Purdue University is one, and we’re really partnering with Purdue on sustainable agriculture. One of the challenges we have as a global population is that we’re swelling to about nine-billion people by 2050. And, so, the world is going to have to double our agricultural output or have starvation challenges around the world. Purdue’s College of Agriculture partnered with us to do a variety of research around sustainable agriculture, increasing agricultural output in using edge technologies to allow farmers to really be able to tailor things such as irrigation and fertilization only to the places in their fields that they are absolutely needed. The ultimate goal of this, of course, is to drive more effective ways to grow nutritious, healthy, and abundant food for this growing planet. So that’s one great example and that research continues.

Another great example is Carnegie Clean Energy, and they’re an Australian wave, solar, and battery energy company. But they’re really focused on making wave power a reality. They’ve developed a wave energy technology called CETO that uses the wave energy off Western Australia’s Garden Island to power the country’s largest naval base.

Now, you may not realize that one of the big advantages of wave power is predictability. The sun stops shining at times, the wind stops blowing, but the ocean’s waves don’t stop flowing in. Wave forecasts can look out about a week in the future to figure out how the wave energy is going to be, and they only have about a 20 percent margin of error, which allows CETO to predict how much power is going to be generated looking into the future. It even allows them to tailor the effectiveness of CETO, based on how big or small they predict those waves are going to be. They can generate precise knowledge about the shape and the timing of upcoming waves so that they can make sure they get the maximum amount of energy from each wave that comes in.

Those are two examples of the way we’re using technology for social and environmental good.

Gardner: John, you mentioned, of course, about the long period that HPE has been involved with looking for sustainability and improvement and the impact on its communities, and you’ve just said, “Okay, we were on track, but we’re going to accelerate that. We’re going to move it forward.” How can other companies who might want to decide to accelerate what they’re doing get started? What’s a good way to think about a methodological or comprehensive way to get faster, better, and more impactful when it comes to sustainability?

Partner up for possibility

Frey: The first way we suggest is do a materiality assessment, and that’s talking to your customers, your stakeholders, and your employees about the things that are most relevant to your business and the things that you have the greatest ability to impact. So, figure out what’s most material and publish plans to solve those challenges. In fact, HPE gives an example every year in our Living Progress Report. We publish our own materiality assessment and then show how the initiatives we’re taking are driven straight from that materiality assessment.

Another thing that we would recommend is to learn from leaders. Don’t reinvent the wheel. Companies like HPE freely share this knowledge with our customers, stakeholders, and others in the broader community because we feel that not everybody needs to go back and develop their programs from scratch. Learn from those that have been doing it, learn those lessons and then use that to accelerate your progress.

Learn from the leaders, Don't reinvent the wheel. Companies like HPE freely share their knowledge with our customers, stakeholders, and others in the broader community because we feel that not everybody needs to go back and develop their own programs from scratch.

And finally, partner for success. You don’t have to go it alone. Leverage the expertise throughout your value chain. In HPE’s case, for example, we share our sustainable IT strategy, our white papers and our workbook that helps customers implement a sustainable IT strategy freely, and we put them out on the Internet so that anybody can have access to them and tap into those resources. So, look up and down your value chain and see where there are others that already have that expertise and learn from them.

Gardner: Before we close out, let’s take advantage of the fact that we must look to current and new technologies to solve these problems. What are some of the future opportunities? Even if we don’t know the how, perhaps we have a sense of the what. What is it that we can be doing in the future to bring these carbon net-zero realities right into our backyards?

Frey: We’ve talked a little bit previously about the fact that we don’t have all the low-carbon solutions we need. And one of the things that HPE did to help with that effort is we co-launched the Low Carbon Patent Pledge. HPE gathered with partners Meta, formerly Facebook, JPMorgan Chase, and Microsoft.

By putting those patents out there, making them freely available, we hope to accelerate the innovation opportunities out there. Perhaps it will be for things that we could have never imagined patents being used for, but some innovator will see a connection and be able to accelerate some new low-carbon solutions. I think there are other ways as well and that we’re seeing a shift from moving in technology from the general compute world to workload specific hardware and software solutions. We’re seeing advances in liquid cooling that are necessary as densities go up, and I think there’s a huge opportunity around software efficiency as well. This is a great untapped opportunity. Yet, some studies say that using a more effective software programming language, such as, for example, Rust, could reduce power consumption by the technology industry by up to 50 percent.

Learn More About

HPE's Living Progress Initiatives.

I think there are opportunities to have common platforms from the edge of the cloud so that we can all see across our technology operations, look at things such as utilization rates, power consumption, carbon emissions, and see those in a common way across that value chain and by being transparent, it highlights opportunities for improvement.

And finally, I think there’s a lot of opportunity that artificial intelligence (AI) and machine learning (ML) bring to optimization.

But we have to do that while paying attention to ethical AI principles as well, because these types of technologies can be misused if we’re not paying attention to the ethical implications. I feel that we have a strong need to not only use the ethical AI principles that are in place today but to continue to advance that thinking as well as more and more AI and ML solutions are brought to market.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Hewlett Packard Enterprise.