This summer has highlighted the reality of the climate change, putting environmental issues back on the agenda. But how do we actually measure how well businesses are performing in this area?
You may think that high environmental, social and governance ratings mean companies are performing well when comes to reducing carbon emissions, but a recent study found there is actually very little connection between the two. Even when considering the E – environmental – aspect of ESG, the relationship with carbon emissions is as little as 0-4%.
The challenge is that ESG ratings are often used as a shorthand for sustainability, with many firms using their rating as a competitive differentiator for businesses, at least according to IDC global sustainability research lead Bjoern Stengel, who spoke at the recent Logicalis CIO Summit.
Recent findings by Scientific Beta only go to show that even with more firms rating highly on ESG ratings, it is not in correlation with a better environmental footprint in industry.
As organisations realise their sustainable duties -with no ESG rating to hide behind – CIOs and CTOs are finding themselves responsible for taking on a chunk of their firm’s sustainable goals while remaining focused on business needs.
In terms of sustainability and digital transformation, Stengel says: “Increasingly, they enable each other, so it’s absolutely critical that CIOs and other IT professionals play a role in the whole digital and sustainable transformation process.”
Keeping decision making sustainable
Speaking on a panel at the CIO Summit, chief technology and information officers from a variety of enterprise – ranging from hotel chains, property developers, and automotive manufacturers – explained how they are using technology to make their global firms more environmentally friendly.
Gonçalo Pereira, CIO of Portuguese hotel firm Pestana admitted that it’s not easy to drive a sustainable business with technology, particularly with budget considerations and the expense of the technology that can help with sustainability.
However, he argues that it’s important to consider the total cost of a product over its entire lifecycle.
“I mean we spend millions of dollars in building a hotel, but we sometimes forget to say: How could we make it more sustainable?” explained Pereira.
“Not only on the materials, but the construction work – what you use there, and how you operate it.”
For Pereira, that’s where technology can play a role, and if a company like Pestana spends more at the beginning in making sure the right technology is in place, such as optimising a building to track energy usage, then it can work out more sustainable both environmentally and financially in the long run.
Agreeing to his point was Irvan Yasni, CIO of Indonesian property developer, Sinar Mas Land, who added that the first challenge he comes across in tackling sustainability is getting the budget approved on technology investments.
“We really need to put up a real use case, including the cost and benefit to the business, every time we ask for technology spending to be approved,” Yasni points.
For Sinar Mas Land, the second biggest challenge is selecting the best partner to work with as an energy partner may approach them promising to help tackle their sustainable goals when in the end it is all marketing myths.
“The journey to the sustainable game requires big support from all registered,” states Yasni.
This goes for every technology initiative they begin, explains the CIO, and making sure that it, and every partner and product involved, is directly attached to their sustainable goals.
As Yasni and his team take sustainability to the forefront of their minds in making decisions, Nigel Townley, CTO of UK Research Institute, explained that one of his biggest challenges is changing the behaviours of people in the business.
“A lot of people will say they want to help sustainability or reduce emissions, but don’t know how,” Townley admitted. “The problem is that people won’t necessarily change behaviours.”
For Townley, this means making the impact of the daily actions people take on emissions more visible so that they can take actions to reduce their carbon footprint and see the results for themselves.
For example, in one of his offices in Cambridge, the reception hosts a digital screen that shows a live dashboard of how much energy is actively being used in the office, (in this case, from the solar panels).
Reduce, reuse, recycle
For Fernando Luiz Rostock, executive IT manager at Yamaha Motor in Brazil, the challenge that Yamaha Motor hopes to and have tackled is the power consumption of Yamaha Motor’s data centres.
Previously, the automotive firm held its data centres on-premises and moved to the cloud four years ago in order to not only help with the expense of powering a data centre, but also the carbon footprints of hosting a private one, too.
“Moving to the cloud helps us understand our energy consumption,” explains Rostock. “Sharing infrastructure with others in cloud solutions is better for the environment because we have a better utilisation of the energy.”
In relation, sharing and hiring technology services are popular among the technology leaders to help with direct environmental issues such as e-waste.
“In the old days, everybody used to buy their own technology,” explains Rostock. However, nowadays companies can use hardware-as-a-service solutions to hire technologies they need from firms such as Dell and HP to reuse.
Similarly, the UK Research Institute will sell any of its excess devices internally to its staff.
“In the last 12 months we’ve sold in excess of 1000 devices and recouped £100,000 in fees, which we’ve been able to reinvest directly into purchasing accessories and equipment to support home work,” explained Townley.
With this, staff are happy because they can buy cheap laptops and phones for their friends and family, and Townley is happy because he can reinvest the money that they get back into equipment to better improve the new culture of working from home.
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