How to make your digital transformation strategy greener
Corporate climate protection is growing. At last November’s COP26, more than half of the FTSE 100 companies pledged to eliminate carbon emissions in line with the UK’s goal of net-zero emissions by 2050.
Environmental, social and corporate governance (ESG) is also becoming increasingly popular among small and medium-sized companies. Digital transformation in particular can enable sustainable business practices and help companies achieve ESG goals.
IT leaders and CTOs have a role to play in not only supporting how their organization uses technology to plan and operate more efficiently, but also in ensuring that technology is sourced and used with sustainability in mind.
However, it can be difficult to sift through ESG’s alphabet soup and know where to start without being accused of greenwashing. However, there are a number of key steps IT leaders can take to pursue green digital transformation strategies.
Monitor employee emissions
Thanks to Internet of Things (IoT) devices, sensors and real-time data collection, reporting ESG data to improve operational efficiencies is gaining importance. KPMG survey on sustainability reporting by technology companiespublished in April 2021, found that 83% of 311 respondents actively report on sustainability, while 70% mention carbon reduction targets.
Although companies are getting better at monitoring emissions from sources they own and operate, known as Scope 1 and 2 emissions, they are not as adept at reporting Scope 3 emissions – the ones that move up and down a company’s value chain. Unlike Scope 1 and Scope 2 emissions, which are mandatory, Scope 3 emissions are optional.
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The shift to remote and hybrid work during the pandemic has raised questions about whether companies should include Scope 3 emissions in their reports. Sustainability depends on reducing carbon emissions, but studies show that these working models simply shift emissions away from the office. According to the climate consultancy EcoActa drop in emissions related to commuting can offset this, but it warned that this cannot be known without considering emissions from a company’s operations.
At the very least, companies would do well to encourage or request their employees to adopt sustainable IT practices and reduce their digital footprint. Almost half (42%) of IT leaders interviewed by the Confederation of British Industry (CBI) in January are tracking the environmental impact of employees working remotely, including the electricity tariff they belong to.
Consider the environmental impact of the cloud
The pandemic has accelerated cloud adoption, and with good reason. Accenture Research shows that migrating to the public cloud could result in total cost of ownership (TCO) savings of 30% to 40%.
However, the true impact of cloud computing and services is often not properly communicated within organizations, says Kelly Hungerford, director of digital transformation strategy and services at oral health company Sunstar Global IT professional.
“Efforts to move and move on-premises operations to the cloud — or develop new services — are typically associated with streamlining operational and development costs. However, the business and environmental impact is more compelling than the TCO talk,” says Hungerford.
One of the biggest benefits is the reduction in energy consumption. Running on-premises data centers requires a significant amount of electricity. In addition, there are the costs for transport, use and disposal of the devices, which must be taken into account.
Just as Scope 3 emissions from remote and hybrid work should be included in ESG reporting, companies should also pay attention to whether third parties themselves are working efficiently. As more companies deploy cloud services, the pressure on off-premise data centers increases, resulting in more carbon emissions being generated across value chains.
According to Hungerford, Sunstar Global selects partners who “integrate strategic data center environmental management policies into their business strategy.” “This means that not only do they operate sustainably, strive to reduce waste and commit to powering the digital delivery of products using renewable energy, but so do their partners,” she adds. Gartener also forecasts Carbon emissions from cloud service providers will become one of the top three purchasing decisions for IT buyers by 2025.
Rely on sustainable hardware management
Hardware end-of-life management has long been a weak link in corporate sustainability plans, says Andy Tomkins, Sustainability Engagement Manager at Canon EMEA. As companies also increase spending on IT and hardware to accelerate their digital transformation strategies, the situation is only likely to get worse unless steps are taken to mitigate the impact on carbon emissions.
IT buyers should start by buying from manufacturers and suppliers who design their products with the circular economy in mind, says Xavier Battinger, Director of Business Development at Ricoh Industries France IT professional. However, this might be easier for laptops and PCs than for specialty devices like servers.
“Companies should ask themselves whether the product they are buying will last, whether it can be reused, repurposed, or upgraded throughout its lifecycle within the organization,” says Battinger.
According to a 2021 study on IT purchasing in the Netherlands According to the Utrecht Sustainability Initiative, e-waste and emissions would decrease by 50% if all companies switched to circular procurement and extended hardware lifecycles.
One way to manage end-of-life hardware is through recovery programs. Ricoh, for example, has its Resource Smart Return program that allows copier and printer cartridges to be returned, which are then reused or recycled.
Another way is to buy from manufacturers who commit to dematerialization, Tomkins says, whereby a company leases hardware and returns it at the end of the lease. The hardware is repaired or refurbished before being leased to the next customer. “All parts and products of this model must be developed with maximum material recovery in mind.”
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