Sustainability has become a priority for business leaders who are facing rising calls for change from consumers, investors, regulators and their own employees.
There's another powerful reason to embrace change as well. Companies that take the lead on environmental, social and governance (ESG) issues also outperform financially, generating up to 2.6 times more value for shareholders than their peers.
Delivering on the sustainability agenda will be impossible without technology. That’s the over-riding conclusion from our latest sustainable technology survey. Every respondent in the survey of 560 companies with over $1 billion in revenue said technology was either 'important' or 'very important' for achieving their sustainability targets.
Developing a sustainable technology strategy
Delivering on the promise of sustainable technology will require CIOs to take a seat at the sustainability table. They must work in close collaboration with other executives to identify the technologies that will help the company achieve its sustainability goals. And, at the same time, they must address the environmental and social impacts of the technology itself.
Currently, only 49% of CIOs are part of the leadership team setting sustainability goals.
And just 45% are assessed on achieving these goals.
Only 7% of companies have fully integrated their technology strategies with their sustainability strategies.
Consider the following:
The information and communications technology (ICT) sector produced only 1.5% of CO2 in 2007, before rising to 4% today and potentially 14% by 2040.
Training a deep-learning AI model with 213 million parameters can generate more than 313 tons of CO2, equivalent to passenger emissions of 315 return flights between New York and San Francisco.
The introduction of well-intentioned AI can trigger public alarm about bias involving race and gender.
Technology is key to solving the world’s most daunting challenges, but it must be used in a way that helps maximize the benefits while minimizing its harmful side-effects.
Business leaders need to ensure their technology is providing solutions without contributing to a problem. We have identified three areas where the CIO will play a decisive role:
Net zero: Green software practices can reduce energy consumption.
Trust: Build systems that protect privacy and are fair, transparent, robust and accessible.
Governance: Make ESG the focus of technology, not an afterthought.
3. Sustainability at scale
Collaborating with your ecosystem to trigger progress beyond the company and across the world.
Consumers are concerned about the global impact of the products and services they use. This desire for a more holistic approach to business will increasingly shape how companies interact with investors, partners, regulators and customers.
Leaders can transition to a more holistic business model in four key ways:
Fast-track alignment with the United Nations Sustainable Development Goals.
Accelerate innovation through working beyond the boundaries of one company.
Foster standardization, bring in regulations and build awareness.
Join industry collaborations, alliances and advocacy groups focused on eco-friendly technology.
Companies that adopt sustainable technology to a significant extent achieve 4% higher ESG scores on Arabesque S-Ray dataset than those that do not. This can translate into an 11% jump in their ESG ranking.
CIOs must take a fresh look at their technology through the lens of sustainability. Creating and implementing a comprehensive sustainable technology strategy is now the core mission of the purpose-driven CIO.
Companies should use technology sustainably to drive growth while also delivering the environmental and social progress that their stakeholders desire.