Innovation for Low Carbon Society IT Supports Your Objective

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1 <4 th March 2010> Innovation for Low Carbon Society IT Supports Your Objective

2 The world is smaller, flatter and hotter. Objecti ve 1.86 Current % Curre 3.5 nt Most energy efficien t Least energy efficien t

3 The Reality of Living in a lobally Integrated World Water Increase in global water usage since the 1900s, twice the rate of human population growth Production Worth of produce is wasted in India because of outdated postharvest infrastructure Electricity The losses of electrical energy due to inefficiency - around the world Money Lost annually in the US due to healthcare fraud Computer Idle computer capacity Maintenance Spent on IT maintenance Port of total port volume in many major ports is empty containers Annual consumer product and retail sales lost in United States due to supply chain inefficiencies Consumer Annual impact of congested roadways Congestion

4 An IBM environmental policy and history 1971 Environmental policy 1997 First in the world ISO14001 Integrated 130 or more World level Environmental Awards Actual achievement of IBM Japan Ordinary Energy saving CO 2 66% reen IT No1 Energy saving, Business model change Reduced by Business model + innovation

5 Is 25% = 25%? - Severe facts in Japan Energy, CO2 (energy origin) エネルギー起源 CO2 Unit : million t-co2 H: reen House as エネルギー起源 CO2 以外のH CH 1990 Actual 1990 年実績 Actual 2005 年実績 % 15% by Aso 2020 年旧政府案 % 年鳩山目標 by Hatoyama % H(reen House as) 出所 : 地球温暖化問題に関する懇談会中期目標検討委員会

6 C&T in Tokyo Metropolitan: 8% (Ave) reduction is required(2010~2014) Restriction for 1,300 buildings in Tokyo Second phase(2015~2019) 17%reduction Base year emission 10,000 t-co2/year 8% Example : Base year emission = 10,000 t-co2 Compliance factor = 8% reduction Need totally 25%reduction by 2020! Need 8% reduction on an average (2.8% reduction per year continuously) Reduction Method 1) Self reduction 2) Emission Trading Reduction period 5 years (for 1st phase) Penalty for non- compliance Allowance 42,000 t-co2 (9,200 X 5 years) Supposed cost for purchasing CO2 = 15,000JPY/1CO2-t - Required 1.3 times reduce of shortage - Monetary fine - Fact of violation will be released to the public - overnor will purchase credit and charge its cost to the violating installation

7 The world will be changing Smarter Planet Digital infrastructure and the physical infrastructure unified + + = INSTRUMENTED INTERCONNECTED INTELLIENT New Intelligence Smart Work Dynamic Infrastructure reen & Beyond Smarter water management Smarter electricity supply Smarter traffic Smarter oil Smarter food supply chain Smarter cities 7

8 Environmental sustainability is an imperative for 21st century business one that not only encompasses conservation, pollution prevention, and more but also enables the creation of entirely new value and benefits. Lower costs while overcoming operational barriers. Strengthen reputations while meeting regulations. Create products and services that give rise to new markets. Cost Enterprise Value New Market

9 To achieve these benefits, organizations must build: IT Enterprise Society 1 reen Sustainable infrastructure solutions 2 3 Intelligent systems Take out cost & improve the efficiency of IT. Manage environmental impact of assets. Enable readiness with regulatory compliance. Increase organizational efficiency (processes, products and people). Decrease employee environmental impact with remote work and collaboration strategies. Mange resources at a macro level. Use predictive analytics for water management. Optimize power grid. Optimized transportation systems.

10 reen Innovation cases in the world

11 Sustainable solutions: Applications and benefits Distribution Manufacture Paper SMART IS Consolidating distribution centers to reduce emissions by 15% and fuel costs by 25%. SMART IS Reinventing manufacturing processes to use less water, energy and other chemicals. SMART IS Reducing travel, real-estate and office costs while appealing to top talent. COSCO: Performed an analysis of its operations across product development, sourcing, production, warehousing and distribution. The company ultimately consolidated its distribution centers from 100 to 40 to prevent 100,000 tons of emissions each year. IBM Burlington FAB: Retooled its chip-making process to cut annual water use by 20 million gallons, chemical use by 15,000 gallons and electricity use by more than 1.5 million kwh. A smart organization: Can reduce paper consumption by 80%, cut annual real-estate costs by tens of millions of dollars and eliminate 20% of programming (or software) code and associated energy costs by re-engineering its workforce operations.

12 Business DATA WORKSHOP ON DELIVERIN REEN ROWTH The Hakozaki CO2 Visualization Project. Existing System EPD (EMS) HQ Division Plant Factory LOB Energy MMT Invest? Facility Data Facility Data Facility Data Facility Data 視点財務顧客業務プロセス学習と成長 戦略上の目的 収益性の向上 顧客の意識向上への対応 業務プロセスにおける CO2 排出量の可視化と最適化 従業員の学習 成長と満足度の向上 BSC KPI 経常利益 / 環境投資 (Return on Environment Investment) CO21 トンあたり経常利益 (Return on Carbon) CO2 削減による財務効果 ( 直接効果 間接効果 ) カーボンフットプリントの表示割合 環境対応製品 サービスの割合 商品のエネルギー効率性評価 ( トップランナーとの比較 ) 自社の CO2 削減活動に協力いただいている顧客の割合 顧客満足度調査 ( 環境への取り組みの影響評価 ) 総エネルギー量 (CO2 排出量 ) 自然エネルギーの活用割合 排出源別エネルギー量内訳 ( 電力 ガス ガソリン ) 設備別エネルギー効率性比較 排出量の実測割合 排出量取得 報告の自動化割合 ( 含むサプライヤー 協力会社 ) 施設ロケーション サプライチェーン評価 法規制の学習率 従業員満足度調査 ( 環境への取り組みの影響評価 ) 経営層 Strategy acceler ator and brakes Cockpit Org.HR Info Business Energy DB Europe 総計 BS IBCS EMEA Total US Japan AP Europe Y EMEA Y Y AP Y R US Japan Management Water,Chemical Amount, quality Knowledge DB TS R Dashboard Practical Product/Accounting ass, LN Chemical Analysis Tool Operation

13 Intelligent systems: Applications and benefits Traffic Electricity Water SMART IS Lowering congestion and carbon emissions by influencing traffic patterns on a city scale. SMART IS Knowing exactly where a power outage occurs and instantly dispatching a crew to fix the problem. SMART IS Using real-time information to help reduce the energy required to desalinate and deliver water. Stockholm, Sweden: Implemented an intelligent toll system that uses cameras, sensors and central servers to identify vehicles and charge drivers based on when and where they drive cutting traffic by 20% and emissions by 12%. DON Energy: Installed remote monitoring and control devices to gain an unprecedented level of information about the current state of the grid, lessening outage times by a potential 25-50%. Malta: Is building an integrated water and energy system that will rely on 250,000 smart meters to monitor energy usage, identify water leaks and electricity losses, set variable rates and reward customers for using less.

14 Intelligent Traffic System Stockholm tax for congestion August, 2007 system started. One - July, 2006: Trial period Traffic: 20-25% reduction Public transportation: +40,000 people/day Discharge gas (CO2 grade) : 14% curtailment (in the city)

15

16 CO 2 emission WORKSHOP ON DELIVERIN REEN ROWTH Macro scale traffic simulation in Japan Agent simulation provide information for policy consideration Virtually validate enforcement of policy, societal change what if with consideration of traffic restraint, aging society 2,000 cars / day 32,000 cars / day Design driver model Decision making model for young / aged driver Capture from driving simulator Aged Young 49,000 cars / day Predicting number of traffic in aging society What-if analysis for traffic of metropolitan scale Macro scale simulator current aging Driver agent after Change of CO2 emission with policy enforcement Driver s model Cars Macro scale simulation environment

17 reen Innovation Advantage

18 Energy and Environment Framework House of Carbon. Regulation and compliance Stakeholder and Pressure groups Environmental groups Media Market Forces Carbon Management Strategy Customer Shareholder Financial and market analyst Competitor Manage Supply People Information Product IT Property Operation Reduce Demand Behavioral Change Complex Carbon Information Management

19 We become a low carbon company. We support improvement in clients' carbon productivity. We contribute to realization of low carbon society.

20 We ve only just begun to uncover what is possible on a smarter planet. The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet. By systemically managing water and energy use, as well as carbon emissions, smart organizations will realize true sustainability while achieving real business benefits driving growth at the individual, organizational and population levels. Beautiful blue earth To the next generation

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