Going green is difficult, but IT leaders must find a way to do it quickly.
CIOs and other tech leaders can play a vital role in ensuring that companies are sustainable. Ned Calder is a partner at Innosight (a strategy consulting firm based out of Lexington, Mass.). Many companies are placing a strong emphasis on the “e” in their environmental, governance and governance (ESG), goals. Technology must be a key driver to achieve success. The IT department must be a key partner.
Calder discusses the following concepts in this interview
corporate climate action drivers;
It is important to define terms
Sustainability first steps
Technology’s role in climate action
The foundations of a sustainable strategy; and
IT-business alignment on environmental issues
Why companies need to care about climate impact
Software vendors and businesses suddenly start to talk about climate action. This includes technology to support a circular economy and ways to measure carbon emissions. decarbonizing data centers. What are the key factors driving IT and business leaders towards environmental sustainability?
Ned Calder says that many factors are coming together. Depending on the industry, where the focus is placed will determine which one, but I believe there are four major factors. [environmental sustainability drivers]:
Consumer expectations.This is due to increased consumer expectations that the companies they purchase are responsible for the environment.
Expectations of employeesAs sustainability concerns grow in popularity, employees want to work for a company that shares their values. People want their companies to take action on important issues.
Investor expectations.It is very important [corporate sustainability driver]The fact that the investment community is now considering what firms are doing regarding climate change is a good sign. Investors are increasingly looking for businesses that are not on the right side of the macro trend toward sustainability. [view that]As a risk to the company’s long-term health. Companies that want to attract investment capital must have a [sustainability]Story and action plan.
Regulative action by the government More aggressive government regulation to address sustainability.
How can IT and business leaders facilitate more productive conversations about environmental sustainability in their companies?
Calder: Define your terms. When we discuss SustainabilityWhat does it actually mean to use a term in the context of our company, for example? It’s not always easy to define terms in order to have productive conversations about the actions we want to take, where they are taken, and what role different parts of our organization play in supporting our priorities.
First steps towards environmental sustainability
If leaders have not prioritized sustainability in the past, what should they do first?
Calder: One major shift in the discussion about sustainability has been the inclusion of a greater sense of accountability. [Concern for the environment has]Usually, something that existed in a small portion of the organization, perhaps backed only by ‘lip services.
Now, sustainability must fundamentally be intertwined with the long-term strategies of the company. It must have an impact on:
How leaders think about the markets they want to play in
What types of services and products they will offer;
How they intend to bring those products or services to market
Which business models they’re going wrap around these; [and]
What resources they will use to make these more sustainable.
One of the most important shifts we have seen in the discussion about sustainability is the inclusion of accountability and a wider range of perspectives.
It is important to measure the impacts so that there are ways to track and show progress.
CIOs and other IT executives — as they are part of helping to shape business strategies — should be part of the discussion on how we incorporate. [an environmental focus]Incorporate the overall strategy. They should then translate that into a statement about how it will affect how they operate their organization as a CIO, and what the priorities for the IT organisation.
It is essential that IT priorities are clearly connected to the overall sustainability strategy.
Calder: It all depends on the business’s focus. Any organization of a certain size or complexity will need to have a lawyer. [the right type of sustainability technology is]It’s likely that it’s not just one thing.
Take, for example, the packaging issue in CPG [consumer packaged goods]. Recycled plastic might be of benefit to some product types. Others may be able shift to paper alternatives. Others may be able to move away completely from packaging.
One of the similar challenges many organizations are currently facing is simply trying understand and quantify. [environmental]You will be able to measure the impact in a consistent and objective manner over time. This is to allow them to understand their biggest impacts, and then to monitor and communicate the progress of any interventions.
This is not to say that organisations don’t have them.AnyThey may have some insight, but they’ve not optimized their internal systems in a way that allows them to measure all variables.
CIOs are often responsible for implementing the systems and analytics necessary to make environmental impacts possible. This is an important job.
Sustainability strategy foundations
What are the essential foundations for a sustainable strategy?
Calder: Companies should look beyond their current planning horizon and create a longer-term strategic plan that clearly defines the priorities, and has the scope and scope to address the importance of these challenges.
It doesn’t necessarily mean you have to be a good conversationalist with the business.
The ‘future-back” approach can be extremely helpful in helping leaders to decide what is most important for the business’ long-term success. If you look at the long-term, you can see how things could unfold and make decisions that will help you prioritize which things to invest in.
This is where the technology organization can play an important role, acting as a partner in establishing a long-term vision. It is not a good idea for technology organizations to try to create a path that is not in line with the business’s needs.
IT-business alignment regarding climate change
What if a CIO/IT leader recognizes the importance of climate action but isn’t aware of the business side?
Calder: It is possible that you are seeing something about the world which may be a blind spot for the business.
Being able to have a productive conversation with the business does not mean you are just an order taker. You can bring a perspective to the table that can shape, help to influence. It is crucial to translate that perspective into the realities and success of the business.
If there is a clear vision and strong partnership with the business about what we are trying to achieve, you can be more confident about where you should invest and how fast you should move. You’ve got the right people to support you. [IT-business alignment on climate change]It can make it much easier to deal with a complex set of issues and to create a change plan.
