Luxembourg Green ICT Report: Where does the banking sector stand?

The integration of green ICT is a crucial issue for the financial industry. To evaluate the maturity of Luxembourg banks, the ABBL, in collaboration with Deloitte Luxembourg, conducted a survey. The results reveal that the sector is still in the early stages of integrating the concept of green ICT into its sustainability transformation journey. The report therefore includes guidance on priorities and on the necessary support.

Discover the Green ICT survey here below.

In relation to the transformation of banks towards sustainable development: Discover the ABBL Energy Savings Guidelines for the Banking Sector here, as well as the FAQs on energy savings for banks in Luxembourg.

• Green ICT survey: Public report for the banking sector October 2023 – ABBL/Deloitte Luxembourg

Green ICT: a pivotal theme

In an era defined by rapid technological advancements and a growing emphasis on environmental sustainability, the concept of Green ICT, or Green Information and Communication Technology, has emerged as a pivotal theme in the global dialogues. Green ICT signifies the convergence of innovative technologies and eco-conscious practices, aimed at reducing the ecological footprint of the information and communication technology sector. As our world becomes increasingly digital, the importance of this topic cannot be overstated. It resonates profoundly within the financial industry, where data-driven decision-making and digital infrastructure are integral to operations.

Financial institutions, serving as the economic backbone of nations, have a unique responsibility to address environmental concerns, given their substantial energy consumption and reliance on data-intensive operations. The adoption of Green ICT principles has become crucial in aligning the financial sector with sustainable development goals and mitigating the environmental impact of their technological infrastructure.

Slow but steady progress

Notably, the survey revealed that, while there is a general awareness of Green ICT within the sector, the overall Green ICT maturity score averaged at 2.3 out of 5. This suggests a slow pace of development and commitment to green ICT practices. A higher score would indicate a higher level of maturity and commitment to Green ICT practices.

The relatively slow development can be attributed to a complex interplay of factors and circumstances:

• Emerging concept of Green ICT: Green ICT is still relatively new to the Luxembourg banking sector, and it’s a concept that is gaining recognition but not yet fully understood. There is a learning curve associated with these environmentally sustainable practices.
• Awareness of benefits: Many banks are not fully aware of the advantages of Green ICT beyond environmental benefits. These advantages include cost savings, more efficient resource allocation and fostering a sustainable organisational mindset.
• Progressing initiatives: Some banks have already taken steps to embrace Green ICT, such as integrating environmental criteria into IT procurement, implementing eco-friendly e-waste disposal practices, partnering with green energy providers for data centres, and adopting power management processes to reduce energy consumption. These initiatives demonstrate a growing commitment to sustainability and environmental responsibility in the banking sector.

Priority areas where support is needed

Although there is a general awareness of Green ICT initiatives within the sector, banks require further assistance to optimise and seamlessly integrate these initiatives into their everyday operations.

The surveyed banks have identified specific areas where support and knowledge are pivotal as they progress on their journey toward greater sustainability.

Notably, they prioritise:

• Enhancing industry awareness of Green ICT by leveraging Benchmark Analysis to compare banks with the market average
• Getting further knowledge of relevant green ICT market regulations
• Refining IT procurement and governance practices by defining and applying environmental criteria when selecting and purchasing hardware
• Adopting best practices and guidelines for selecting energy-saving and low emission software
• Improving the management of end-user devices

Paving the way to sustainability

The Green ICT survey conducted by ABBL and Deloitte Luxembourg provides valuable insights into the early stages of sustainability adoption in Luxembourg’s banking sector. While the sector demonstrates an evolving awareness of Green ICT, it is evident that the journey has only just begun.

At the ABBL, we are deeply committed to the sustainability journey of the Luxembourg financial sector. We stand ready to work in partnership with our member banks, providing the necessary resources, knowledge, and guidance to expedite the adoption of Green ICT practices. Together, we can collectively embrace a future of eco-conscious banking, reduce our environmental impact, and align our industry with global sustainability objectives.

Survey methodology

The survey, conducted in June 2023 amongst ABBL credit institutions members, centered around two core components:

• The evaluation of Green ICT maturity
• The calculation of ICT CO2 emissions

Within these components, a comprehensive assessment was carried out across a diverse range of specific ICT areas, which included ICT procurement, ICT governance, end-user devices and printers, cloud computing, software and services, data centre operations, and network management. For each of the 8 areas, participants were presented with 2 to 17 questions. Based on their responses, an average score between 0 and 5 is assigned to each answer. Such scores, calculated at a response level, are then consolidated based on the average for each of the 8 areas defined in the framework. Finally, the averages per area are used to calculate the overall ICT maturity average at a banking sector level, which incorporates all areas.