Outsourcing IT functions can have environmental benefits, according to a report seen by IT Week.

The whitepaper from analyst IDC found argues that outsourcing providers can use economies of scale by sharing datacentre infrastructure across a large number of users, meaning that they can reduce overall energy use.

Outsourcing has the added benefit that companies can reduce their own exposure to green legislation, meaning that IT directors face fewer compliance pressures.

"Although today the EU would like the IT industry to regulate itself, this won't be the case forever," said James Eibisch, research director at IDC.

"Today, legislation is concentrated on areas such as materials and recycling, but discussions are going on within the EU and NGOs to extend environmental regulation to IT and communications, and companies must consider the future implications of this for their business."

Fabio Torlini of Rackspace, the company that commissioned the report, said that IT outsourcing firms were able to install the latest renewable energy technologies and energy efficiency kit, but that individual companies find it harder to justify such investments.

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were 'guaranteed response times' and 'allowing in-house IT staff to concentrate on more strategic issues'