CIOs are increasingly prioritizing sustainability capabilities when selecting technology companies, with several firms already establishing IoT projects and using emerging technologies to drive sustainable outcomes. However, there is still a need for greater cooperation on circular business models and shared ESG objectives. CIOs must ensure that sustainability-aligned results are incorporated into new technology use cases and deployment methods, considering the benefits and drawbacks of developing technologies to achieve sustainability goals. Organizations must continue to prioritize the sustainability capabilities and credentials of their technology vendors, with ESG requirements expected to dominate technology vendor selection decisions.
Accelerating Sustainability with Emerging Technology
The recent EY Reimagining Industry Futures Study investigated executive attitudes towards 5G, IoT, and other emerging technologies across 1,325 global firms from various industries. The study found that organizations are increasingly utilizing these emerging technologies to advance their sustainability initiatives. According to the study, emerging technologies offer several benefits, including improved measurement, increased efficiency, and the capacity to create virtual goods and processes, and provide Chief Information Officers (CIOs) with essential solutions and steps to help their organizations rethink their future.
Significant convergence exists between business technology and sustainability strategy, according to the study. The first part of the article discusses emerging technology’s role as sustainability drivers, the sustainability-related benefits of modern technology, environmental, social, and governance (ESG) as a key factor in emerging technology investments, and how sustainability imperatives are changing perspectives towards industry ecosystems and technology suppliers.
The second part of the article examines differing industry perspectives on emerging technology and sustainability. The study found notable differences in energy efficiency and business circularity expectations at the sector level. When asked about the sustainability benefits of emerging technology, 46% of respondents across all industries cited decreased energy usage as the top benefit. However, only 38% of the healthcare sector mentioned this benefit, compared to 54% of the automobile sector. Similarly, only 35% of executives in government organizations mentioned reduced waste output, compared to 50% of executives in the manufacturing sector.
The study also revealed that government and healthcare were the two industries most likely to point to benefits from emerging technology in gauging the environmental impact of their organizations, with both industries at 44%. However, evaluating the environmental impact of suppliers is viewed as significantly less critical in government and healthcare, but as a significant advantage among manufacturing and energy respondents.
The study suggests that emerging technologies are instrumental in driving sustainability across different industries, with differing perspectives on their benefits. The findings provide valuable insights for organizations to ensure that their expectations translate into long-term value creation.
Long-term Value Creation Through Sustainability and Technology
Industries are increasingly turning to emerging technologies to aid in measuring their performance and progress toward sustainability goals. However, while ESG factors are already influencing technology investment decisions, CIOs must do more to ensure that high expectations result in long-term value creation.
One key consideration is the need for technology leaders to focus on long-term sustainable advantages. While emerging technologies offer a variety of sustainability benefits, it is important to carefully consider the combined impact of multiple technologies before prioritizing and phasing ESG outcomes. It is also crucial to assess the environmental implications of emerging technologies, such as their carbon footprint and energy efficiency, and ensure that IT upgrades align with the organization’s overarching sustainability goals.
Collaboration between leadership roles and responsibilities can also help accelerate ESG goals through technology. Discussions with the Chief Sustainability Officer or equivalent role can contribute to the proper assessment of new technology acquisitions and ensure that digital transformation roadmaps align with sustainable principles.
Furthermore, sustainability should be a guiding concept for relationships with technology suppliers. As organizations expand their focus beyond their own operations to include their supplier chain, it becomes even more necessary to report Scope 3 emissions. ESG requirements are expected to dominate technology vendor selection decisions, and organizations must ensure that their sustainability agendas inform these relationships.
By taking these actions, CIOs can ensure that emerging technologies deliver on their potential to advance sustainability goals and create long-term value for their organizations.
Prioritizing Sustainability in Technology Investments
CIOs are prioritizing sustainability capabilities when selecting technology companies, but there is still room for greater cooperation on circular business models and shared ESG objectives. To ensure sustainability-aligned results, CIOs must incorporate ESG objectives into new technology use cases and deployment methods. This involves considering how technology use cases might benefit partners, customers, and employees, and establishing proper feedback loops with technology vendors.
As sustainability goals come under greater scrutiny, organizations must continue to prioritize the sustainability capabilities and credentials of their technology vendors. CIOs must assess the benefits and drawbacks of developing technologies to achieve sustainability goals, create long-term value, and ultimately build a better working world.
About the Author
Joseph Ian M. Canlas is a consulting partner and part of the Climate Change and Sustainability Services team of SGV & Co.
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