For many decades, sustainability was linked with good economics. If it is too expensive to operate sustainably, then there was very little incentive to practice it.
COP21 shifted this Laissez-faire approach. The 2015 U.N. Climate Change Conference highlighted a new call for reducing our carbon footprint.
Along with COP21 commitments came the regulatory push to drive sustainable operations. While it was natural for people to focus on transportation, logistics, and energy industries, the IT industry was also put in the spotlight, as this article discusses.
For example, this article, which calls for chief digital officers (CDOs) to work with chief technology officers, points out that a single natural language processing model emits as much as 125 roundtrip flights between New York and Beijing.
As a result, interest in green IT mushroomed. But having green IT does not mean you are a sustainable enterprise clarifies Arun Biswas, vice president and senior partner for Asia Pacific at IBM Consulting.
Don’t confuse the definition
“My definition of a sustainable enterprise is one that is focused not just on financial KPIs, but a range of other KPIs that matter to its key stakeholders,” Biswas explains.
Green IT is just one part of that sustainability equation.
“It's important to keep in mind that this is not a zero-sum game. So we are not talking about either growth profitability or others. And we do believe that there can be a good balance between all these objectives,” says Biswas.
This balance can be unique to each company and industry. Biswas notes that geographical locations and regulations also matter.
But where a sustainable enterprise differs from a traditional enterprise with a good CSR program lies in how they drive ESG and sustainability in everything they do.
“First of all, [sustainable enterprises] are purpose-driven. And it is very clear when they engage with their stakeholders it is not driven by just short-term profits,” Biswas points out.
“The sustainable enterprise is not just focused on the short term; they are focused on the long term horizons,” says Biswas.
And it is here where sustainable enterprises differ. Most of these companies also understand that long-term sustainability cannot be done alone.
“So, the sustainable enterprise is also very ecosystem-oriented. Because these enterprises know that they can't, in the long run, do things on their own; they have to be part of an ecosystem,” says Biswas.
WATCH: Arun Biswas talks about the people factor in sustainability.
Steps to sustainability
The days of citing carbon tax payment and sending press releases about the numerous certifications about green IT are no longer enough. While these still matter (especially in supply chain partner verification and business process point of view), people are going further.
For Biswas, it is really about maturity. “And whenever we engage with our clients, we often try to assess them from the perspective of the maturity scale. And carbon tax, ISO certification, etc., are almost step one in that maturity scale, which is related to compliance. And compliance is not going to be enough,” he says.
The second step is optimizing operation. “Think energy efficiency, waste reduction, sustainable supply chains, smarter infrastructure. But that's also not enough,” says Biswas.
Next, companies need to be ready to reinvent their business model to take advantage of new business opportunities. “Think of an oil company that moves into the clean energy business,” notes Biswas.
The final step in the maturity curve is working with other industry players and policymakers to create new markets and cross-industry ecosystems. These can “infuse sustainability in every decision you’re making,” explains Biswas.
WATCH: Arun Biswas highlights the tech industry’s sustainability role.
Sustainability is a data problem
Biswas sees data playing a major role in sustainability. And it is also where chief data officers and chief digital officers need to step up in their roles as sustainability champions.
The reason is simple. A lot of sustainability initiatives depend on data analytics to monitor, manage and improve ESG within the company itself.
“In many ways, I would say data is at the heart of sustainability solutions. As the popular saying goes, you cannot manage what you cannot measure,” Biswas opines.
“Think about things like balancing the power grid, for example. You need information on energy demand, energy supply across millions of energy consumers, and energy sources to be able to balance the power grid. So at the heart of all sustainability solutions is data,” he continues to explain.
But for Biswas, data is also part of the problem in sustainability. “Because the data that is required for sustainability is not easily available. Even if it is available, it's locked in in silos. It's very hard and difficult to consolidate,” Biswas.
To practice sustainability, CDOs need to collate the data and share it across organizations and other companies. This raises other questions in terms of privacy and security.
However, companies no longer have the luxury to wait. Regulators are now pushing for ESG data sharing. Investors are demanding the data be available. Fund managers want to scrutinize the data to ensure there is no greenwashing. Even bank loans are now becoming tied to ESG data and sustainability.
This is where Biswas sees IBM playing a critical role. “And from an IBM perspective, if we have to bring about this change, we have to first start with ourselves.”
He notes that IBM began on their sustainability journey early — like 50 years before COP21. “Our focus has now shifted to working with our clients to help them in their journeys. And we see this as a core part of our mission.”
Today, IBM is applying its lessons by working closely with local social entrepreneurs, leading enterprises, and NGOs to solve complex sustainability questions. And it then shares the lessons and data with the rest of the world.
WATCH: Arun Biswas discusses the lack of ESG data.
While data and technology are vital, they alone cannot balance the sustainability equation. For that, you need innovation. Biswas calls it “multi-dimensional innovation.”
“It will require innovation, not just in technology, but it will require innovation in business models, design, industry processes, and policymaking; it will require all of these to come together,” says Biswas.
IBM, for example, uses the IBM Garage, which employs startup-like techniques in the context of large enterprises and complex ecosystems. “So using these Garage-like methods, you can quickly take ideas and scale them.”
Whatever the approach, a sustainable enterprise should not be afraid of reimagining new ways of working.
“That’s because sustainability is a global problem of complex proportions. It will also require new ways of working.”
Winston Thomas is the editor-in-chief of CDOTrends and HR&DigitalTrends. He is always curious about all things digital, including new digital business models, the widening impact of AI/ML, unproven singularity theories, proven data science success stories, lurking cybersecurity dangers, and reimagining the digital experience. You can reach him at [email protected].
Image credit: iStockphoto/metamorworks