As technology continues to take a larger role in corporate sustainability practices, CIOs can play a key role in driving both business value and environmental, social, and governance (ESG) performance.
In fact, creating and implementing a comprehensive sustainable technology strategy must now be the core mission of a purpose-driven CIO.
Every executive in Accenture’s recent sustainable technology survey agreed that technology is critical for achieving sustainability goals. So why have only seven per cent of businesses fully integrated their technology and sustainability strategies?
In part, it’s because this will require a fundamental shift to a business model that will affect the role of the CIO, who may not even be aware that their expertise is needed to address these challenges.
Delivering on the promise of sustainable technology will require CIOs to take a seat at the sustainability table, where they must work in close collaboration with other executives to identify the technologies that will help their company achieve its ESG goals.
Despite how critically intertwined these goals are with technology investments and operations, less than half (49 per cent) of CIOs are included in their corporate leadership team’s decision-making processes around sustainability objectives and plans.
Without CIOs being involved in these core responsibilities, ESG targets suffer — which is particularly concerning when considering companies that take the lead on ESG issues outperform their competition financially, generating up to 2.6 times more value for shareholders than their peers.
Why are some companies slow to action?
Given how important sustainability metrics are to companies and their stakeholders, it is crucial to identify why it is taking so long for some organisations to jump on board with new technological innovations to implement meaningful change.
Research has uncovered the following challenges:
- Perceived lack of readiness and expertise: 40 per cent of executives surveyed believe that the right solutions are not available or not mature enough, including availability of the right talent to lead these initiatives.
- Complexity and challenges with implementation: 33 per cent of executives surveyed are struggling with the complexity of solutions or with modernising their legacy systems to be more sustainable.
- Awareness and understanding of impact: 20 per cent of executives surveyed are not aware of the unintended consequences of technology or whether the technology they use is sustainable.
Examining these hurdles more closely, Accenture developed a Sustainable Technology Index, which ranks performance against the three elements on a scale of 0-1.
Interestingly, it revealed a “crowded middle” around the median score of 0.45, with roughly 60 per cent of companies posting scores within the range of 0.3 to 0.5. Put simply, this indicates that most organisations still have a long way to go in achieving a sustainable technology strategy, creating an opportunity — and sense of urgency — for CIOs to foster greater education and implementation of suitable solutions.
New responsibilities for CIOs
CIOs must be proactive in progressing these organisational shifts, as business leaders will continue to lean on them to ensure company technologies are providing solutions without contributing to an environmental problem.
While in years past this was not an active concern, the information and communications technology (ICT) sector has recently become a larger source of climate-related impact. Producing only 1.5 per cent of CO2 in 2007, the industry has now risen to four per cent today and will potentially reach 14 per cent by 2040.
Fortunately, CIOs can course-correct by focusing on three key areas:
- Net zero: Utilise green software practices that 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.
As a first step in this transition, CIOs can begin assessing their organisation’s technology through the lens of sustainability to ensure that those goals are being thought about in every facet of the business.
In addition, they can connect with other leaders in the company to encourage greater emphasis and dialogue in cross-organisation planning for technology solutions as they relate to sustainability targets.
What are the benefits?
While the path to implementation requires comprehensive analysis and a proactive approach, a switch to sustainable technology leads to numerous benefits for the company, its sustainability goals, and CIOs themselves.
Sustainable technology contributes value across the board: 48 per cent of companies said that they saw increased revenue, 49 per cent saw a marked improvement in talent recruitment and business innovation, and 53 per cent said they’ve been able to use these changes to meet their ESG targets.
In fact, companies that adopt sustainable technology to a significant extent achieve four per cent higher ESG scores from Arabesque S-Ray, a global specialist in measuring ESG metrics.
The emphasis on sustainable technologies also reflect a turning point in how organisations interact with CIOs. The expertise of these leaders is now needed across all aspects of the organisation, emerging as a strategic asset and a key part of a company’s sustainability DNA helping accomplish goals much larger than focusing solely on internal operations.
While these new responsibilities can certainly be daunting, they also mark a significant opportunity to transform the way a company views its technological resources, along with a turn in how company leaders and investors view and value CIOs as important decision-makers in the greater strategy of the organisation.