Sustainability is one of the greatest transformation challenges of our generation. The stakes have never been higher, with less than a decade to deliver on the UN Sustainable Development Goals. On the flip side, the opportunities to harness technology, innovation and a shared commitment for a more sustainable world has never been greater.
Business ESG performance not measuring up to reality
Why step up our game now on sustainability? For one thing, organizations are facing compounding pressure from a range of stakeholders, including investors, consumers, regulatory agencies, and employees to demonstrate Environmental, Social and Governance (ESG) performance alongside financial performance.
Consumers are making more sustainable purchasing choices and investors are putting greater weight on a company’s ESG score. They want to see the data to back up an organization’s sustainability credentials.
Here is where intention doesn’t match reality. We are seeing companies devote an above-average share of their earnings calls to ESG topics, but their actual performance on ESG indicators was consistently below average over the past three years, according to our recent Business Futures 2021 study.
In our report Shaping the Sustainable Organization, we found that many organizations lack the requisite management practices, systems, and processes (what we call Sustainability DNA) to drive the behavioral change required to deliver both financial value and sustainable and equitable impact. Those who embrace key practices generate greater sustainability and financial performance. Measurement is key to understanding a company’s sustainability maturity, and our Sustainable Organization Diagnostic is a data-driven tool to assess it.
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Technology is key to meeting ESG goals
The power of technology to help companies deliver on their ESG intentions came home to me when I recently participated in the inaugural session of the Green Cloud Advisors program in collaboration with the Massachusetts Institution of Technology (MIT) Sloan School of Management. We took a deep dive into one of the topics on my learning list: how the green cloud can put us on a more sustainable path, from energy efficiency and carbon reduction to new business models and product and service innovations.
The potential of the green cloud, as our research shows, is a perfect example of the double helix effect of technology and sustainability—we can boost shareholder and stakeholder value by simultaneously reducing costs and carbon emissions. Migrations to the public cloud can reduce CO2 emissions by 59 million tons per year, which equates to taking 22 million cars off the road. At the same time, making this shift can result in up to 30-40 percent of total cost of ownership (TCO) savings. Companies that re-platform their business on cloud at scale can substantially outpace their peers. By doing so, they gain computational flexibility, strategic agility, and access to the world-class technology capabilities of cloud hyperscalers—virtually overnight.
CIOs and CTOs play a major role in advancing sustainability
As part of the ESG agenda, companies must tackle the energy, climate change and carbon challenge. They can do this in three important ways: 1) change the supply of energy to renewables, 2) reduce the consumption of energy, and 3) improve the storage of emissions effects.
Here is where chief information officers (CIO) and chief technology officers (CTO) play a major role in helping their companies achieve ESG goals, particularly in becoming carbon-neutral and even net-zero. There’s a big opportunity for CIOs and CTOs to use technology in two crucial ways to help their companies meet ambitious sustainability goals and targets:
- Sustainability in Technology: Make technology more sustainable through different technological and strategic measures. These measures cover everything from infrastructure and equipment to operations and software, all with the aim to radically reduce the negative impact of companies’ technology footprints.
- Sustainability by Technology: Deploy technologies to advance sustainability. For instance, creating and integrating digital technologies that reduce the negative environmental and social impact of a company and its value chain by enabling sustainability use cases and organizational capabilities.
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If CTOs and CIOs get this right, we will redefine the nature of competitiveness and deliver true value to all stakeholders.
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Digital technologies and circularity part of the ESG equation
Digital technologies such as the Internet of Things, robotics and machine learning are all essential to the concept of the circular economy, which is another potent avenue for CIOs and CTOs to help deliver on ESG.
With circularity, our linear economy’s take-make-waste approach is replaced by a regenerative circular model in which waste is designed out. Circularity is a big part of the answer to any organization’s sustainability transformation, as our work with hundreds of companies has demonstrated. Circularity forces us to think of our impacts in a holistic way. Cloud computing, for example, is a technology that can deliver both economic and circular “quick wins.” A study by Microsoft and professional services firm WSP found that the Microsoft cloud is up to 93% more energy efficient (and up to 98% more carbon-efficient) than on-site solutions.
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Bringing the double helix DNA into the core
At Accenture, we are committed to support organizations to address their ESG challenges, improve their ESG performance, raise the bar on purpose, and embed responsible business into strategy, operating models, processes, and technologies to deliver sustainable growth. That includes working closely with clients and ecosystem partners to help transition industries to a low-carbon world.
At the same time, we are on our own sustainable transformation journey to bring the double helix DNA into the core of our business. This includes a number of ambitious commitments, which we believe are important for inspiring credibility and confidence among our clients, and for all our stakeholders. We will drive 360-degree value, delivering the financial business case as well as sustainability value in all its dimensions.
Accenture has achieved significant progress towards our net zero journey through sustainable technology. Our sustainable technology roadmap has been focused on three areas: 1) core operations, 2) products and services, and 3) ecosystems and partnerships. And we’re proud of our accomplishments so far: 95% of applications moved off premise to more energy-efficient locations as part of the CIO’s cloud transformation; 99% responsible disposal of devices through e-steward certified asset disposition programs; and 52% reduction of core carbon emission per employee against 2007 baseline.
Everyone and every small action matters. It’s about changing mindsets. We can all play our part in rising to the greatest challenge of our generation. Future generations are counting on us.
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