• Daryl Elfield, Partner |
  • Luis Rosenthal, Leadership |
4 min read

As organisations look to lower their carbon footprints and help combat climate change, the IT function can be a key ally to the business in achieving ESG goals. Technology teams are proving a key enabler for initiatives like ESG reporting. As custodians of business data and analytics, they are key to the tracking of emissions across the business lifecycle and providing the data needed for better governance and decision-making. In parallel, new technology solutions for more sustainable outcomes bring additional hope for renewed progress in this space – giving the CIO a crucial role in helping organisations meet sustainability goals.

But in order to truly maximise the positive impact of Enterprise IT (EIT), the CIO needs to lead the charge to drive down the carbon emissions of the IT function itself. In this way, EIT can be not only an enabler but a leader of the organisation’s low carbon and broader ESG ambitions.

And of course, as technology teams grow in every industry the CIO can take a leading role solving beyond the E in ESG. Social issues like mobility, diversity, inclusion and equity are equally relevant, as is ensuring algorithms utilised don’t reinforce social bias. There are multiple levels at which a contribution can be made.

The (not so hidden) cost of technology

The fact is that the digital revolution accelerated by the pandemic has generated a surge in technology and energy-hungry operations, all of which have an associated carbon footprint. And it’s not just about data centres. Software development, for example, can be surprisingly energy intensive. Training a single neural network model can emit as much as five times more carbon than five regular petrol-powered cars would during their entire lifetime. In fact, in 2021 global EIT contributed a staggering 400 megatons of carbon – equivalent to the entire UK economy in the same year.

In short, EIT has a significant impact on the very carbon goals it is involved in tackling. This only increases the imperative for the CIO and fellow IT leaders to make the pivot from low-carbon enabler to ESG leader.

Starting with the E

Perhaps the single biggest impact EIT can have is moving the organisation’s infrastructure to a sustainable cloud – most major cloud providers power their data centres from renewable energy sources. There are variations between providers, of course, as well as decisions that can be taken around which geographical centres to host data in, as that has implications for the amount of energy consumed (servers in hot climates, for example, needing more energy to keep them cool).

However, this only addresses a part of the problem. Some other very tangible initiatives that EIT can spearhead include working with vendors to address e-waste (for example retiring old and energy-inefficient laptops, hardware and cabling) and moving to ‘green label’ hardware in its place. These are good steps to build ESG awareness in relation to IT and can serve as building blocks to larger, more complex transformations.

One of these is to reduce carbon emissions in the Software Development Lifecycle (SDLC). Building and implementing a strategy for more sustainable SDLC is one way for CIOs to make a lasting impact. This might include a focus on coding that runs algorithms more efficiently or cutting out superfluous testing iterations. A similar rationale applies to reducing the use of legacy software and decoupling old, energy intensive applications from the architecture.

Hitting the social goals

But as we observed earlier, it is not only about carbon and sustainability. With IT teams now often reaching a significant size, the CIO can actively help the organisation make progress towards its social goals by driving a progressive inclusion & diversity approach in line with the company-wide aspiration, as well as through work-life balance and wellbeing initiatives, strategic social investments and focusing the hiring process on under-represented social groups. Growing EIT teams everywhere have the opportunity to lead the way and role model for the rest of the organisation.

Governance and collaboration

To build a sustainable IT organisation, getting the right governance structure in place is critically important. The CIO and other IT leaders may need to consider whether a dedicated ‘Head of Sustainable IT’ (or similar), reporting to the CIO, is needed to take ownership of the issues and drive the agenda. A robust framework will also be needed to track, measure and report against ESG goals, along with clear lines of accountability.

It goes without saying that EIT can’t act in an independent silo on this. There needs to be collaboration and coordination across key functions. In particular, EIT and the CIO need to build a close working relationship with the Head of Sustainability and their unit – wherever they sit in the business. This must be a two-way relationship: the sustainability team will have the clearest view of organisation-wide targets, while EIT can provide essential technical input on current and future state activities that impact their trajectory. 

Three key actions

We would highlight three essential stepping stones for any CIO looking to make a real ESG contribution and move from enabler to leader in this critically important sphere:

  • Define your ESG strategy (within EIT and in support of the whole business)
  • Create a sustainable IT roadmap, complete with key milestones and KPIs
  • Move to a sustainable cloud

With so much further for organisations to go on the ESG journey, CIOs need to step up to the challenge. Are you ready to help drive a lasting difference?

For more information on how to get started on your journey, get in touch with our team:

Ross Molyneux, Director – Financial Services ESG

Daryl Elfield, Partner - Quality Engineering & Testing

Luis Rosenthal – Innovation Lead, Ignition