How can CIOs help drive their organisation’s sustainability agenda?
- Alastair Lechler & Mark Reid, Interim CIO,
- July 13, 2023
Combine a struggling UK economy with the continued rising cost of raw materials, a hangover from Brexit and Covid, add in record high inflation — it might be easy to understand why most companies are focused on cost containment, driving efficiencies and generally in ‘tighten belt’ mode!
Add into this the continued demands for digital transformation and the euphoria of opportunity (and concerns) in the use of generative AI and it’s not surprising that technology leaders have a packed “to do” list.
But as COP 28 draws closer and the pressure mounts to see a real step changes in the pace towards the target of the Paris Agreement to limit the global average temperature to 1.5°C above pre-industrial levels, we continue to see the impact of climate change around the world on a daily basis.
Where does this all leave the CIOs; Promisingly a recent CIONet survey also indicates that 60% of CIOs now have sustainability on their agendas and CIO recruitment firm Nash Squared, 70% of business technology leaders said that technology plays a crucial part in sustainability. Across Argon International’s CIO network we are see growing opportunities for the CIO to bring their transformation expertise to the Board table in order to help organisations achieve their ESG targets.
It also provides CIOs with the opportunity to push the focus beyond an efficiency play to a broader business growth and value transformation ; a McKinsey survey found that 83% of C-Suite leaders and investment professionals expect that environmental, social, and governance (ESG) programmes will contribute more to shareholder value in five years than they do today.
Despite major headwinds, continued uncertainty and instability in the current market — in this short piece we aim to offer some practical suggestions around how weaving sustainability into strategy can enable efficiencies and avert nasty penalties for inadequate ESG reporting.
Firstly — a few notable case studies to demonstrate the point:
Walmart has implemented a technology transformation program that uses new technologies such as AI and machine learning to improve supply chain and logistics operations. Walmart now uses drones to monitor inventory, and is constructing automated robotic trucks to reduce emissions.
Airbnb has used a ‘transformation hub’ to support its commitment to sustainability. This hub uses technologies such as big data analytics and predictive analytics to identify ways to reduce resource consumption.
IKEA has implemented a “Transformation Office” that is focused on developing innovative digital technology to increase sustainability. Examples of this include the use of big data and blockchain technology to create a more circular supply chain.
Pukka Herbs’ sustainability-focused approach has been a driving force behind its business growth. The company has experienced significant revenue increases, expanded its product offerings, and entered new markets both within the UK and internationally. Pukka Herbs’ success demonstrates that even small and medium-sized enterprises can leverage sustainability as a strategic advantage, driving growth while making a positive impact on the environment and society.
Innocent Drinks has successfully built a strong brand identity by aligning with the values of health, sustainability, and social responsibility. Their commitment to using natural ingredients, responsible sourcing, environmental sustainability, and philanthropy has resonated with consumers who prioritise these values, leading to a loyal customer base and increased market share.
Innocent Drinks’ acquisition by Coca-Cola sparked some concerns among consumers who were wary of the impact on the company’s values and practices. However, Innocent Drinks has remained dedicated to its founding principles and has continued to prioritise sustainability, ethical sourcing, and social responsibility.
Overall, the acquisition by The Coca-Cola Company has allowed Innocent Drinks to scale its operations and increase its global presence while maintaining its core values and sustainability-focused approach.
What did ChatGPT say (we had to ask…) ?
Chief Information Officers (CIOs) play a crucial role in driving their organisation’s sustainability agenda. Here are several ways CIOs can contribute to and help advance sustainability initiatives:
Establish a sustainability strategy: CIOs can collaborate with senior leadership and other stakeholders to develop a comprehensive sustainability strategy aligned with the organisation’s goals. This involves understanding the environmental impact of technology infrastructure and identifying areas for improvement.
Implement green IT practices: CIOs can lead efforts to optimise energy consumption and reduce the carbon footprint of IT operations. This includes implementing energy-efficient hardware, virtualization, and cloud computing solutions to minimise energy consumption and optimise resource usage.
Drive digital transformation: By leveraging technology and digitalization, CIOs can drive organisational changes that promote sustainability. For example, promoting paperless processes, enabling remote work and video conferencing to reduce travel, and implementing smart building technologies for energy efficiency.
Data analytics for sustainability insights: CIOs can leverage data analytics to gain insights into the organisation’s environmental impact. By analysing data related to energy usage, waste generation, and supply chain, CIOs can identify opportunities for improvement and make data-driven decisions to enhance sustainability performance.
Enable collaboration and communication: CIOs can implement collaboration tools and communication platforms that facilitate remote work, virtual meetings, and knowledge sharing. By enabling virtual collaboration, organisations can reduce the need for travel and physical meetings, resulting in lower carbon emissions.
Support renewable energy initiatives: CIOs can explore opportunities to shift to renewable energy sources for powering data centres and IT infrastructure. This may involve partnering with renewable energy providers or investing in on-site renewable energy generation, such as solar panels or wind turbines.
Foster innovation and partnerships: CIOs can encourage innovation and support initiatives that promote sustainability across the organisation. This includes exploring emerging technologies, such as Internet of Things (IoT), artificial intelligence (AI), and blockchain, to drive sustainability improvements in areas like energy management, supply chain transparency, and waste reduction.
Educate and raise awareness: CIOs can play a role in educating employees about the importance of sustainability and providing guidance on sustainable practices. This can include training programs, awareness campaigns, and regular communication to foster a sustainability-focused culture within the organisation.
Measure and report sustainability metrics: CIOs can collaborate with sustainability and finance teams to define key performance indicators (KPIs) and metrics for measuring the organisation’s sustainability progress. They can establish reporting mechanisms to track and communicate sustainability achievements, both internally and externally.
By taking a proactive approach and leveraging their technology expertise, CIOs can contribute significantly to their organisation’s sustainability agenda. Their role involves implementing green IT practices, driving digital transformation, leveraging data analytics, fostering collaboration, supporting renewable energy initiatives, promoting innovation, and raising awareness about sustainability throughout the organisation.
The human angle: CIOs; within their technology strategy and operating mode
No different from any other business leader, the CIO needs to be able set-out their own approach to building sustainability within the technology strategy and operating model; not separate from it but be integrated within the overall objectives of the strategy.
Some ideas here would be:
- Share responsibility with the team; it’s a team sport after all.
- Understand your carbon footprint data and metrics; how you will measure it?
- The data and tooling should align with strategy and data governance models
- Adopt a cloud first strategy but with full understanding of the cost and operating model implications
- Embrace digital transformation: Leverage technology to drive sustainability initiatives and improve efficiency
- Automate processes where possible to minimise paper usage and streamline operations
- Use AI to optimise data gathering and reporting
- Make ESG a part of your supplier selection and review processes
- Learn from your key partners and suppliers
- Understand how the regulatory environment impacts your decisions
- Explore digital solutions such as cloud computing, data analytics, and IoT (Internet of Things) to optimise energy usage, reduce waste, and enhance resource management
- Maximising IT equipment life cycles, using renewable energy
- Many sustainability initiatives focus on simply buying less technology, which reduces transportation costs, e-waste and energy-based carbon footprints.
CIOS; taking the wider organisation to a sustainable future
But a purpose driven and sustainable organisation is more than just the CIO focusing on the ESG aspects within their direct control. In response to a recent global survey of 221 IT leaders conducted by Gartner, they said “IT leaders shouldn’t just respond to stakeholder and regulatory pressures, but use them as an opportunity to proactively champion change to discover new growth opportunities, such as the innovation or adoption of new products and business models,” the report said.
The CIO needs to make the link for the board between digital transformation, data analytics , e-commerce and ways of working to the organisation’s overall ESG strategy. It’s a great opportunity for CIOs to bring their business understanding to the table and leverage their collaboration and delivery skills; be the voice of sustainability.
Let’s also not forget that increasingly recruiting and retaining talent is also linked to the organisation’s commitment to being an environmentally sustainable business.
So what can the CIO do to enable this broader agenda?
- Understand the components of the business strategy and linkage to purpose drive
- Implement a sustainability framework
- Lead the charge for metrics
- Use AI momentum to innovate on products and services
- Embrace the circular economy
CIOs can effectively leverage sustainability as a catalyst for business transformation, fostering innovation, operational efficiency, and a positive impact on the environment and society.