Green IT at Washington Mutual Saves Lots of Green (Money) -- and Electricity and Trees, Too

CIO Debora Horvath is leading a cross-functional effort to cut WaMu's computing costs and environmental impact. Here's how WaMu got started, takes advantage of its green-thinking employees and is already saving millions.

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In particular, Forrester's survey results showed that U.S.-based companies were more likely to cite cost-cutting as a prime motivator for green IT rather than more environmental or brand-related motivations.

WaMu and many other companies in financial services are hurting right now and could use any reductions in operational costs to offset losses related to downturns in credit, mortgage and other markets. (For more, see "Does Your Work in Information Technology Matter to Wall Street?") WaMu reported a net loss of $1.14 billion in the first quarter of 2008, due to deterioration in WaMu's home-equity and home-loan portfolios, and increases in delinquent loans.

Unfortunately, Horvath says, green initiatives tend to be viewed as adding expense. "It's very difficult to suggest that you are going to increase the company's overall expenses at this time," she says. "There is a concern by people on the peripheral that trying to become environmentally friendly is just going to increase costs, because environmentally friendly products come with a price premium, initiatives take project teams [away from what they're doing], and they cost money. That's the pushback you get early on."

From the get-go, Horvath's environmental council set out to "foster and support green initiatives that could be self-funding," she says. As an example, Horvath mentions office paper. "If we could reduce the amount of paper that we utilize, we would save enough money to then consider buying paper that was more environmentally friendly," Horvath says. "And if the paper is more expensive, it still might be a net reduction [in cost] because we've reduced our volume of [paper consumption]."

WaMu's legal department, for instance, had been the company's biggest consumers of paper. IT already had reduced the legal department's use of dedicated printers and moved them to multifaceted printer-copier-fax machines, which saved on paper-related costs. "We then asked them to go to duplex printing," she says, which is printing on both sides of a piece of paper. "And then we asked them to think twice about all the things they're printing."

In a short time, Horvath reports that the legal department had reduced its paper usage by 15 percent. From the legal department pilot, plans are now underway to replicate the program throughout the rest of WaMu's operations. Even just a 5 percent reduction in paper usage spread out across the rest of the bank's operations would make moving to more environmentally-friendly paper, which can be more expensive, "quite easy to justify," Horvath notes.

"How we get everybody to think about green is that it doesn't have to be more expensive or increase our costs," Horvath says.

To its customers, research showed that a more environmentally friendly WaMu is a big selling point. In 2007, WaMu's marketing department conducted an online survey of 500 customers in areas where WaMu has retail branches. The goal was to find out how important green-related corporate initiatives and services mattered. The findings showed that 38 percent of those surveyed thought it was important for their bank to be passionate about environmental causes, and 45 percent said their bank should operate as a green company, Horvath reports.

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