How to integrate sustainability into digital transformation

A company’s sustainability strategy would ideally include all three pillars. For example, commitment to equitable accessibility and sustainable community development would be part of the social pillar, while activities focused on protecting and restoring ecosystems (including clear air and water as well as carbon footprint) are part of the environment pillar.

Under the economic pillar, actions include creating equitable jobs, using economic incentives, and expanding accounting practices to include a full valuation of resources along the entire value chain.

How can sustainable innovation in technology aid in mitigating risk?

Climate change presents both physical risk (risk to physical assets like buildings, supply chains, human resources, etc) and other forms of transitional risk (like reputational risk in the tide of shifting consumer preferences, increased government regulation, etc).

There are a lot of ways we can think about the benefits of sustainability in IT to the business, but the risk mitigation piece is a prime topic of conversation as businesses enter an unsure future. Incorporating a sound sustainability strategy for your business can play a role in helping a firm mitigate those risks and technology has a role to play in that space.

Consumer preferences and employee preferences are shifting towards brands that incorporate sustainability, and this is increasing pressure for businesses to take action and to be transparent about that action.

The shift in preferences is largely due to the fact that the salience of climate change and social inequity is increasing as we see more acute hazards like floods, hurricanes, wildfires, and civil unrest. This presents a reputational risk to businesses that sustainable innovations in technology can aid in mitigating.

There are other forms of transitional risk to consider, too, like shifts in regulatory and incentive structures that will impact every business unit. And lastly, we have an area that is often unaccounted for in the IT department and that is the area of physical risk.

In the development of a long-term strategy, it’s important to take into account both chronic shifts and acute hazards, the risks that are present to a business, and the role that your department can play in mitigating those risks in the future. In the acute hazards area, technology plays a particularly special role in helping businesses be more responsive, resilient, and responsible across their supply chains using data.

What strategies or tactics can technology leaders implement to increase sustainability?

At Kin + Carta, we have three main areas of focus for tangible practices: building for carbon efficiency, designing accessible products, and mitigating bias in algorithms.

Building for carbon efficiency can include shifting from on-prem to the cloud and ensuring that the cloud services used are optimally powered by renewable energy as well as optimizing data storage for energy efficiency. As consumers and workforces continue to rely heavily on technology, product design needs to prioritize accessibility in both hardware and software.

Designing accessible products also falls within the scope of sustainability. As workforces rely more and more on digital assets to work, ensuring accessibility to your digital assets is imperative.

According to the WHO, about 1 billion people, approximately 13% of the global population, have some form of disability. Yet statistics show that 90% of websites are inaccessible to people with disabilities who rely on assistive technology. These people aren’t just customers, but they’re in your workforces, too.

Mitigating bias in algorithms is critical as the use of AI and IoT expands across all business sectors and supply chains. If datasets, for instance, are compiled by teams that aren’t diverse enough, there are likely to be underlying biases that go undetected in the subsequent AI systems.

Try approaching digital transformation work with a creative, product-based mindset, by baking continuous iterations into the plan from day one. Nobody’s needs stay the same forever, so it’s critical to ensure the products and experiences you create can be adapted as and when necessary to support reducing inequalities.

Are there industry-standard metrics and benchmarks? If not, what should I be measuring?

At this time, there are no industry standards, though the hallmark metric is carbon. There are many ways to measure carbon in an enterprise, for example as a function of revenue, as a function of use hours, or as a function of a factor that is salient to a particular business. There are also other metrics to measure technology.

An example is a circularity metric that measures the recyclability/reusability of hardware in data centers or of any on-prem technology. On the other side of the coin is measuring waste generated as a product of digital activities, such as server components and laptops. Energy consumption and energy mix–where energy is coming from and how it’s being used–are good foundations for metrics in digital infrastructure.

What cloud services are powered by renewable energy?

Amazon, Google, and Microsoft comprise 98% of the cloud services market and they all have “green cloud.” But that’s a high-level view, and it’s important to get a more detailed picture.

The degree to which they are powered by renewable energy depends on the region. Microsoft Azure, for example, operates 10 regions in the US, each with a different size carbon footprint. Companies can decide which region to deploy their assets, and they often choose regions that are near their headquarters.

This is a good decision–usually. Now, these companies can add sustainability to the decision equation and consider which Azure regions are most energy-efficient relative to location.

Are there certifications that help demonstrate a company’s focus on sustainability?

At this point, the most well-known and most comprehensive certification is the B Corp. This is a form of accreditation for a sustainable or responsible business.

A third party called B Lab performs a rigorous evaluation of a business, including their equity, how they treat their people, how they interact with their communities, their environmental impact, and the impact of their products and services in their market spaces. It is available to organizations of all sizes, and the cost and time required to receive certification directly relate to business size.

In addition to B Corp certification, which is global, some states in the US have analogous programs that certify “benefit corporations.” This status comes with state-specific incentives. There are also more specific certifying bodies. For example, a company could earn circularity certification, which focuses on the circularity of a company’s products from inception to reuse or recycle.