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Group in boardroom discussion sustainability

How to integrate sustainability into digital transformation

  • 09 December 2021 / By Mark Ardito

The emphasis on corporate social responsibility has led many business leaders to ask a key question: How do we ensure that true sustainability lives at the core of the products, platforms, and experiences we create, and not just in the outcomes we aim to drive?

For companies to build resilient businesses, they must integrate sustainability strategies into their digital transformation roadmaps. Sustainability and digital transformation, therefore, should be seen as two complementary goals.

According to research, 82% of CIOs believe that their organization has a moral obligation to take a stand on societal concerns. In a recent roundtable, host Mark Ardito was joined by Paul Hunterl, Responsible Business Enablement Lead at Kin + Carta, and technology leaders across a range of business sectors to talk about how enterprises can digitally transform business with equal focus on people, planet, and profit.

Leaders looking to ingrain sustainability into their digital transformation journey all have similar questions. Here are highlights from the discussion answering some of the most common sustainability questions.

From a general business perspective, what is the definition of “sustainability"?
 

While most people think of sustainability solely in terms of the environment, the definition in fact is based on three pillars:

Society

Ensuring equitable access to critical resources.

Areas of focus include:

  • Human health
  • Accessibility
  • Education
  • Sustainable community development

Environment

The preservation and regeneration of the environment.

Areas of focus include:

  • Decarbonization
  • Clean air and water
  • Minimizing waste generation
  • Protecting and restoring habitats and or ecosystems

Economy

Creating an economy that will work for generations.

Areas of focus include:

  • Creation of future jobs
  • Economic incentives that promote sustainable behavior
  • A full accounting of products and resources

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 does this comprehensive definition apply to technology and how it is managed in the business?

Technology impacts all three pillars of sustainability either directly or indirectly. Attention to accessibility in software applications, the carbon footprint of data centers, and the development of carbon trading markets are examples of societal, environmental, and economic sustainability factors.

Doing the right thing equals building the thing right - From the code we write to the platforms we build on and the energy we use, it has never been more important to understand the physical impact of our digital solutions.

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.

Discover the 5 steps of sustainable business transformation.

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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.

Where should technology leaders start to build sustainability into their organizations?

Like the addition of any business-critical program, building a sustainability initiative requires strategic thinking up front.

Think in terms of these three steps:

  1. Understand and Prioritize: Link your broader organizational sustainability ambitions with the scope of your role/department. Assess the technology landscape and evaluate sustainability in the context of your approach to delivery, data storage, and computing.

  2. Measure, Benchmark, and Set Goals: Examine key areas of opportunity and explore sustainable software processes through a product lens.

  3. Execute: Map initiatives and opportunities according to impact and contribution to broader objectives. Define and execute inward and outward-facing communications specific to sustainability progress and goals.

Put most simply, to get started building sustainability, pick a starting point. As long as you're moving in the right direction, you can build over time.


Bridge the gap between sustainability goals and technology functions

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