Part of:Why companies should prioritize sustainability
Learn the key role technology plays in sustainability
With ESG and environmental sustainability becoming more important for enterprise success, IT will need to understand its key role. Here's the overview.
The growing focus on environmental sustainability requires new technology processes and approaches.
"Sustainability can't happen without a lot of technology enablement and, therefore, a lot of support from technology leaders," said Bruno Sarda, TMT climate change and sustainability services leader at EY. "When CIOs look at their priorities, sustainability should cut across all of them."
That support doesn't just mean throwing lots of tech at the sustainability problem but, rather, getting strategic about how and where IT uses technology. As environmental, social and governance (ESG) issues become more critical for businesses, IT leaders have their work cut out for them in understanding the role of technology in sustainability.
Here, Sarda discusses how IT can drive environmental sustainability, support ESG initiatives for the organization as a whole and incorporate circular economy principles into sustainability efforts.
Editor's note: The following has been edited for length and clarity.
Bruno Sarda: Recently, EY conducted a survey of leaders at Fortune 1000 companies. Fifty-two percent of these executives saw technological issues as an emerging sustainability and ESG risk factor.
IT leaders really need to look within their own organization and ask, 'What do we need to do different or better?'
The carbon footprint of enterprise IT is driven by two key factors:
The products we buy.
The way they run them, especially in terms of the energies products consume.
To reduce the energy side of the footprint, IT needs to look first at procuring as much clean energy as possible. This is done through procurement but also practically through strategic siting decisions -- for example, locating data centers in areas where they have access to abundant clean energy. That could be hydroelectric power. It could be more renewable sources. But it could also be things like fresh air cooling. Then IT can also reduce energy consumption through virtualization, load balancing and other kinds of energy-saving features in how they manage the overall compute load.
On the product side, IT leaders should look to procure equipment that is energy efficient, for sure, but also that has low embodied carbon. [Embodied carbon] is basically all the carbon that was used to make the product, from the extraction of the raw materials to the manufacturing. Now a lot of the carbon accounting through scope 3 and upstream emissions will include the footprint of how the product ultimately came to market.
The Critical Role of Enterprise Technology in Sustainability
Sarda: A lot of large IT organizations are now actually at the forefront of, for example, trying to both produce and procure [lower carbon] products. They are making use of circular business models and circular economy practices … that use more recycled metal or less carbon-intensive components and materials.
Moore's law is a great enabler, but it also meant that a lot of technology becomes obsolete very fast. A lot of technology has gone to waste relatively quickly.
[Technology and IT] didn't have as much of a second life as it could have. That's certainly one consideration on the design side: how to design things that are more modular so you don't need to replace the whole thing when you want [greater functionality] -- whether it's memory, whether it's storage. There's also this concept of circularity: How can the things that come off the line go back into the next product as opposed to finding their way into the waste stream?
Sarda: There are two categories of technologies that are really important in advancing an organization's overall environmental or even ESG initiatives and impact. And they're rooted in implementation and execution.
We're seeing a lot of demand in our practice now from organizations that are looking for software to implement, manage and track ESG programs. These platforms are rapidly emerging in the space of ESG and sustainability. The company's IT department will enable and support a whole set of tasks and activities for organizational ESG data, especially now that a lot of that data is required or will soon be required for regulatory reporting.
IT leaders should look to procure equipment that is energy efficient for sure, but also that has low embodied carbon.
Most sustainability efforts today have been voluntary. The stakes have increased [due to regulations]. Regarding the professionalization of ESG reporting and ESG data management, there's a lot of work to do. There are technologies that can help you better collect data -- think of things like sensors or even satellites -- that help you do real-time data collection and data tracking. All those technologies are about better knowing what your footprint is and how to manage it.
The other set of technologies is about how companies can deliver on their environmental goals. What are the technologies that are going to help them be more sustainable? In the IT realm you see things like building management systems, for example, but also new innovations like digital twins of networks and facilities that allow for designing more sustainable operating models and practices.
Then there are some more time-tested but still valuable technology approaches like dematerialization. Most of us have moved to a quasi-paperless environment. That increases the IT footprint, but it reduces -- a lot -- the amount of paper that you use, the amount of toner and printers that you consume, and the amount of stuff you have to ship from one office to the next. Digitization and dematerialization can actually increase the IT footprint but [enable] net and avoided emissions.
You see that in things like digital health, or telehealth, where you get a higher IT footprint for telehealth. But then you maybe have a lower footprint of healthcare delivery and maybe actually more affordable, potentially more accessible healthcare, especially to rural areas.
On the balance when you look at the total package, it's often a good decision to increase the IT dimension of a sustainability program. It offsets a much larger part of organizations' overall footprint.
Bruno Sarda
