Outsourcing vendors are running the risk of being dumped by their customers if they don't have green policies or are seen as environmentally unfriendly.

Buyers are increasingly including green and environmental criteria in the vendor selection process for outsourcing contracts, according to The Black Book of Outsourcing report from consultancy Brown-Wilson.

A fifth (21 percent) of US and European companies that already outsource have added green policies and performance indicators to outsourcing agreements during 2007, according to the research.

Almost half (43 percent) of first time outsourcing customers also added green issues in their selection process and 18 percent included them as contractual goals in agreements.

Nearly all (94 percent) of the companies surveyed plan to add green clauses to outsourcing contracts during renegotiation but only 36 per cent are planning a move to greener outsourcing in the next year.

Brown-Wilson claims the rise of environmental and green considerations is down to investor and consumer demand as well as new government regulations, with issues such as energy consumption, alternative energy sources and waste disposal increasingly being incorporated by executives in their decisions.

Scott Wilson, partner at Brown-Wilson and co-author of the report said there are currently very few outsourcers committing to green polices and "making the grade as good stewards of the planet" but he added there will soon be a flurry of activity among offshore companies in China and India aimed at improving their green credentials.

Australia's mixed bag
Rob Mackinnon, a consultant with IBRS, told ZDNet Australia that Australian companies and government departments are beginning to include green policies and performance indicators within outsourcing arrangements, however, often outsourcing firms are unable to meet those requirements.

"I was lucky enough to view the responses to a tender for a datacentre recently. Some of the responses were weasel word-ish or simply couldn't comply," he said.

"The NSW State Government has introduced some green requirements for PC and desktop procurements, which requires some sort of certification that, at the end of the period, equipment is disposed of in a sensitive fashion," said Mackinnon.

The Queensland Government also recently introduced a hardware disposal policy that suppliers of PCs and desktop must meet in order to maintain supply relationships with its departments.

Shadi Haddad from Ethan group -- co-authors of the Australian Computer Society's recent research into green house emissions by Australian businesses -- told ZDNet Australia that while Australian CIOs are aware of environmental concerns they are often unsure how to respond to the issue.

"A lot of CIOs are starting to raise the question but not a lot understand the problem and where they can actually make changes to the environment. It's still fairly early stages for CIOs in Australia," he said.

Both Mackinnon and Haddad said that banks and government departments are leading the way to introducing green standards in outsourcing arrangements.

Tim Ferguson writes for silicon.com