Are You Thinking Too Small About Sustainable Technology?
Sustainable technology isn’t a single objective; it’s a framework of digital solutions that drives ESG outcomes. Make the most of it.
Gartner expects that by 2025, 50% of CIOs will have performance metrics tied to the sustainability of the IT organization. But focusing only on the sustainability of internal IT operations (“sustainable IT”) is too narrow a way to think about sustainable technology. Instead, also think of enabling a whole host of sustainable outcomes using technology.
Gartner defines sustainable technology as a framework of digital solutions that can enable environmental, social and governance (ESG) outcomes for the enterprise and its customers.
“Sustainable technology is increasingly important operationally — for optimizing costs, energy performance and asset utilization, for instance — but it also drives ESG outcomes like improving wellness and providing the traceability needed to ensure responsible business practices,” says Gartner Principal Analyst Autumn Stanish. “Sustainable technology also facilitates new business models and tech-enabled products to better serve customers.”
Sustainable technology drives ESG outcomes in three areas
Sustainable technology creates opportunity in three critical areas of the business: internal IT, enterprise and customer operations.
Internal IT operations
Sustainable IT means selecting and working with the right tools, hardware and vendors to deliver the maximum possible output using the minimum viable resources.
Sustainable IT goals will include reducing Scope 2 and 3 greenhouse gas (GHG) emissions — indirect emissions associated with the electricity used by IT and emissions outside the direct control of the enterprise (such as the embodied carbon in decommissioned IT). Also needed is a firm focus on critical subjects like human rights, ethical sourcing and supply chain transparency.
Solutions may include new sustainable approaches for the responsible stewardship of IT assets, like using robots for recycling to drive circular economy principles into IT, or outsourcing IT operations to sustainable operators, such as hyperscale cloud providers.
Benefits include improved financials from optimized IT resources. For example, consumption-based pricing ties costs to resource utilization, which in turn equates to sustainability impacts (including reduced carbon emissions and e-waste).
Enterprise operations
Examples include providing transparency on sourcing and trade practices, improved energy and material efficiency, reduced emissions and fair labor practices.
Opportunities to advance ESG goals across the business include:
• Automation to reduce resource-intensive activities
• Artificial intelligence (AI) and natural language processing to predict the impact of climate on business
• Advanced analytics to capture real-time performance analysis
• Cloud to transform processes and enable remote work
To best support sustainable enterprise operations, identify and prioritize technology investments that can further those initiatives most material to the organization’s sustainability strategy.
Customer operations
Sustainable technology also provides a prism through which to deliver products and services that enable customers to meet their own sustainability goals.
This requires a thorough understanding of customers’ key priorities and a balance of their desires, which can occasionally conflict with one another. For example, customers may want a sustainable product but are unwilling to compromise on quality and cost. Make it easy for customers to see how their engagement with your products and services contributes to their sustainability goals.
Act now to create an effective sustainable technology portfolio
Ultimately, sustainable technology will incorporate both well-established and leading-edge technologies. Prioritize technology investments based on the top material issues that your enterprise has identified as most important to future success.
Here are a few trends likely to be important for the business and key stakeholders:
• Cloud services can be used to achieve sustainability benefits within economic, environmental and social systems. The elasticity of cloud service models allows organizations to use only what they need, increasing utilization of shared resources and reducing environmental impacts.
• GHG management software facilitates data collection, analytics and reporting of past, present and future emissions data across all three scopes (direct, indirect and nonspecific emissions). These solutions enable enterprises to meet reporting obligations while also providing insights to drive action for improving emissions performance. They also support planning, forecasting and initiative portfolio optimization.
• AI can optimize operations and difficult-to-abate processes to reduce carbon and environmental footprint and mitigate material risks. AI can be made environmentally sustainable with the use of AI techniques that help create and run models at the lowest carbon footprint without partially or wholly compromising accuracy.
• Supplier sustainability applications help companies collect and assess the ESG performance of suppliers.
• Supply chain blockchain can protect, verify and trace transactions; for example, to ensure ethical sourcing.
In short:
• Sustainable technology as a framework of digital solutions can enable environmental, social and governance (ESG) outcomes for the enterprise and its customers.
• Thinking only about the sustainability of IT itself is only one imperative.
• Also consider which technology investments will drive sustainability in enterprise and customer operations.
By Autumn Stanish, Principal Analyst with Gartner