The critical role of the CIO in environmental sustainability

Categories: Digital TransformationSustainabilityTechnology

As the world becomes increasingly aware of the need for environmental sustainability, organisations are looking to their CIO to take a lead role in reducing their carbon footprint. 

For many organisations, this means moving away from traditional IT infrastructure and towards more sustainable options. 

However, making this transition can be difficult, and it is critical that CIOs understand both the technical and business aspects of sustainability to make the right decisions for their organisation. 

In this article, we’ll be taking a deep dive into what environmental sustainability means for the CIO, and how they can lead their organisation towards a greener future. 

The customer is taking notice 

Traditionally, IT infrastructure and its impact have not been at the forefront of customers’ minds when it comes to their opinions of a company. 

However, this is changing as customers increasingly demand that businesses reduce their carbon footprint and become more environmentally conscious. 

A recent Deloitte survey found that nearly 100% of customers surveyed believe that brands have a responsibility to make the world better, while 40% preferentially buy products or services that are sustainable. 

This has led to 35% of consumer product executives believing that consumer attitudes do more to drive their companies toward sustainability than demands from investors, boards, or other stakeholders. 

Given that 90% of companies are adopting ESG solutions (environmental, social, and governance) in the face of customer demand, this trend is unlikely to slow down anytime soon. 

Carbon disclosure is also on the rise, with 64% of companies now reporting on their carbon emissions. This has resulted in a notable increase in the number of organisations that are taking steps to reduce their environmental impact and demonstrate their commitment to sustainability. 

What these factors create, in essence, is a Venn diagram, with customers expecting change, companies focussing on ESG solutions, and carbon disclosure highlighting the environmental cost of IT infrastructure. 

In the centre of this diagram is the CIO, so it’s little wonder then that over 80% of CIOs and CTOs believe sustainability can impact growth strategy, cost optimisation, organisational design and a host of other critical areas of business development. 

The clear benefits of CIO leadership on sustainability 

While it’s clear that customers are expecting businesses to become more sustainable, there are a multitude of other benefits for CIOs in driving sustainability initiatives. 

Firstly, research shows that companies that take the lead on ESG issues outperform their competitors financially. Generating up to 2.6 times more value for shareholders over the long term. This is due to increased trust, higher brand loyalty and enhanced corporate reputation. 

It’s also been demonstrated that businesses with a commitment to sustainability are more attractive to potential employees, driving recruitment and retention. 

An organisation’s social licence to operate is also tied to its commitment to sustainability and how it manages ESG risk. 

Adopting measures that enhance the environment, reduce energy usage and bring about more ethical business practices can improve relationships with suppliers, customers and stakeholders – creating a win-win situation for all parties involved. 

In fact, surveys show that implementing sustainable technology contributes value across the board, with 48% of companies saying they saw increased revenue, 49% seeing a marked improvement in talent recruitment and business innovation, and 53% saying they’ve been able to use these changes to meet their ESG targets. 

There are still significant roadblocks to overcome 

Despite the clear benefits of CIO-led sustainability initiatives, many organisations are still at the early stages of developing their ESG strategies. 

Unfortunately, there is often a lack of resources and funding allocated to sustainability projects, along with a hesitancy to deploy technology solutions due to perceived complexity or cost. 

Around 40% of executives do not believe that the right solutions are available for their organisation, and some believe that investing in ESG initiatives is too expensive. 

Additionally, 33% struggle with the complexity of potential solutions, and 20% simply aren’t aware of the sustainability implications of the technology their company uses. 

CIOs are uniquely placed to overcome these challenges 

Given the sheer number of executives surveyed who agreed on the benefits of sustainable IT infrastructure, but we’re unaware of the solutions available, or were overwhelmed by the complexity of potential solutions, CIOs are uniquely placed to lead their companies in the right direction. 

The technical insights CIOs possess means they can develop an ESG strategy that meets the needs of their business, while also creating a positive impact. Crucially, this doesn’t have to be expensive. 

By implementing a cloud-first strategy, for example, businesses can take advantage of modern cloud solutions that reduce IT costs and free up resources for more strategic investments that create a positive impact. It also removes the need to own, maintain, dispose or recycle physical hardware. 

These solutions can also provide access to advanced AI and machine learning capabilities which enable predictive analytics, enabling companies to be more proactive when it comes to identifying ESG risks and opportunities. 

In addition, businesses should look for ways to reduce their carbon footprint through smarter IT infrastructure management and the use of renewable energy sources. 

They should also look for ways to increase their use of responsible suppliers, such as those that have adopted the UN’s Guiding Principles on Business and Human Rights. 

Finally, organisations should strive to become signatories of relevant industry initiatives, such as The Sustainability Accounting Standards Board (SASB) or the CDP Carbon Disclosure Project. 

By embracing and implementing ESG principles, businesses can not only build a strong reputation but also benefit from improved financial performance. Companies that focus on sustainability are more likely to attract investors and customers who share their values. 

Next step 

Are you looking for a partner to challenge your thinking around decarbonisation? Would you benefit from a partnership focused on creating a positive impact with an ESG strategy that also meets the needs of your business? Yes? Book an introductory call with the team today. 

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