5 minute read 21 Apr 2022
IT sustainability: a CIO’s essential ESG starting points

IT sustainability: a CIO’s essential ESG starting points

Authors
Lior Keet

Managing Director, Emerging Technologies, Ernst & Young LLP

Emerging technology and sustainability thought leader. Service-oriented executive building lasting relationships through trust, quality service and transparency. Active marathon runner.

Amr Ahmed

EY Americas Infrastructure and Service Resiliency Leader

Patient technology consultant, driving engagement and business outcomes. Father of three. Lover of history and soccer.

5 minute read 21 Apr 2022
Related topics ESG Consulting CIO Technology

Where should CIOs first invest their attention to make a measurable impact?

In brief:

  • As CIOs begin to evaluate the ESG initiatives of their organization, they should consider looking within their own IT department.
  • IT is a starting point to develop strategies, measure results and develop a data-centered story to inspire other departments to follow suit. 

Although there are many ways that an ESG (environmental, social and governance) strategy can drive long-term value, the following four sustainable IT tactics can produce the greatest, immediate impact:

  1. Reduce IT energy consumption
  2. Review supplier governance
  3. Implement a circular economy program
  4. Develop a sustainable talent strategy

Reduce IT energy consumption

Organizations can greatly increase their energy efficiency and reduce their carbon footprint through public cloud computing, on-prem energy-efficient technologies and using renewable power, such as geothermal, solar power and water cooling.

Computing power requires massive amounts of energy. Computers, data centers and networks consume about 10 percent of the world’s electricity, demanding about 190 terawatt-hours (190 trillion watts) of energy per year, which is more electricity than the entire state of New York1 uses over the same period. 

The number of terawatt hours consumed by computing has stayed relatively consistent since about 2015, despite the increase in the number of data storage centers. That is because public cloud resources consume less energy than private clouds, and private clouds consume less energy than traditional data centers. Some cloud providers, such as Microsoft Azure Cloud, can track direct and indirect greenhouse gas emissions and data efficiency when moving from on-premises storage to cloud storage.

Reducing energy demand also saves energy costs, which contributes to the CFO’s agenda and helps the CIO build a coalition around ESG. To promote green IT practices, organizations can retool data centers to consume power in the following eco-friendly ways:

  • Improve energy storage efficiency by using flash technology
  • Use ARM processors, which have fewer transistors and require no cooling, for significant power budget savings
  • Switch from copper ethernet networks to fiber cables
  • Leverage artificial intelligence and machine learning to adjust a data center’s cooling requirement
  • Engage IoT sensors to maximize the use of data center space, improve facility airflow and reduce cooling power

Review supplier governance

To achieve Scope 2 emissions reductions, CIOs and IT departments must also address waste and emissions by their vendors, which includes their electricity consumption. 

When it comes to Scope 2 improvements, the big question is: how can we work together with suppliers so they can effectively report to us what their emissions are?

When it comes to tracking and measuring Scope 2 improvements, the big question is: how can we work together with suppliers so they can effectively report to us what their emissions are? CIOs and organizations can mandate that suppliers provide the information (which may not be an effective strategy). Or organizations can incentivize suppliers in a way that helps those organizations establish an accurate representation of the effects of their services and allows them to share that data with their potential clients. A supplier that can demonstrate it has a lower carbon footprint than another supplier may win more business and encourage competitors to reduce their carbon footprint as well. 

Suppliers are material to your ESG ambitions, not just the supplier’s Scope 2 emissions. Other ESG factors that CIOs should consider are their suppliers’ labor practices, workforce and commitment to diversity.

Looking at your supplier network, what percent of the supplier base are women-owned businesses or minority-owned businesses, and how does that align with your ambitions or the customers you serve? While supporting minority businesses is an important social consideration and valid on its own, having a diverse supplier network can also help a company’s bottom line. Multiple sourcing arrangements minimize the risk of supply disruptions, and organizations with a higher adoption of supplier diversity programs generate a greater return on procurement investment.   

Implement a circular economy program

As your organization upgrades technology, what do you do with outdated laptops and old equipment, also known as e-waste? 

E-waste might contain resources, such as copper or mercury cobalt, gold, lithium and neodymium. Establishing an e-waste recycling program within your organization makes sense not only from a cost-savings and environmental point of view — the “E” in ESG — but also from a social perspective. For example, organizations can donate retired laptops, phones, tablets and other electronic devices to schools, low-income areas and community programs to help bridge the digital divide.

circular economy is about more than just recycling equipment. It includes thinking of the second and third life of a product or components and using resources, by-products and surplus materials efficiently. 

Develop a sustainable talent strategy

Research shows that diverse teams always perform better than homogenous teams. How can we break down barriers that lead to gender and racial segregation among the workforce, especially within computing and technology?

The World Economic Forum recently published a Global Gender Gap report2, which explored segregation of occupations along gender lines, along with the fastest-growing job clusters, and found that gender gaps in emerging professions have made little progress toward achieving parity.

One often-cited barrier is the talent pipeline. Women are under-represented in STEM fields, which may be because they were not encouraged to pursue those careers at an early age. However, there is a path to progress. Programs that aim to encourage women and girls in STEM fields and programs that highlight minorities in STEM fields can help set the foundation for these careers to be accessible to everyone equally. CIOs, as part of their organizational strategy, should encourage people to give back to the community and drive participation in such programs. In addition, the Global Gender Gap report found that effective mid-career reskilling opportunities and managerial anti-bias practices in hiring and promotions are important mechanisms for developing and deploying female workers into previously male-dominated growing professions. 

Summary

These are a select few of the many ways CIOs can look within their own jurisdiction to develop a winning ESG strategy. Where is square one for your ESG initiatives?

About this article

Authors
Lior Keet

Managing Director, Emerging Technologies, Ernst & Young LLP

Emerging technology and sustainability thought leader. Service-oriented executive building lasting relationships through trust, quality service and transparency. Active marathon runner.

Amr Ahmed

EY Americas Infrastructure and Service Resiliency Leader

Patient technology consultant, driving engagement and business outcomes. Father of three. Lover of history and soccer.

Related topics ESG Consulting CIO Technology

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