Out-Law Guide 1 min. read

Green IT: the advantages of outsourcing

For IT service providers, there are many opportunities to get ahead of the competition by engaging with 'green' issues.

This guide is based on UK law. It was written and last reviewed in January 2010.

Being recognised as an energy-efficient business offering 'green' products and services can send a clear message to customers: that you are leading-edge and ahead of the competition. You may also demonstrate that you can offer considerable energy cost-savings to customers by providing energy-efficient technologies, which will bring utility bill savings and CRC credit savings in future. This should all be taken into account when the overall value proposition of a bid tender is assessed.

In addition, the Companies Act 2006 places a duty on company directors to consider the environmental impact of their business, which would extend to choice of service provider (see: Directors' statutory duties to the environment, an OUT-LAW guide).

Environmental effect must now, by law, be a factor in the decision-making process for all businesses. For the public sector, environmental concerns are now embedded in the procurement process (see: Green procurement in the public sector, an OUT-LAW guide).

The increasing volume of legislation impacting ICT could encourage businesses to outsource their ICT services to 'shift the risk' and cost of compliance to their service provider.

For example (although there is industry debate about this), the CRC Energy Efficiency Scheme potentially incentivises businesses to outsource their IT infrastructure and services (including data centres) so they do not incur the associated CRC costs and/or as a means of reducing their carbon footprint. There are certainly opportunities for ICT service providers to develop products and services to assist businesses in complying with the increasing levels of legislation. Equally, the costs of compliance should not be underestimated, changes in the law should be expected rather than being seen as purely conceptual (see, for example: The Ecodesign Directive for Energy Using Products, an OUT-LAW guide), and the associated risks allocated should be in the contract from the outset.


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