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With disclosure regulations coming into force and reputations at stake, the pressure is on businesses to make credible progress towards sustainability goals.
Business leaders know that environment, social and governance (ESG) goals are not the end game – longevity and resilience are – but taking a “lone ranger” approach does not work. Effective action on climate must be organisation-wide, and informed by the bigger picture.
Climate risk affects every single person, enterprise and community. Although individual assets are owned, their risk is shared. If datacentres in Dublin are underwater, the knock-on effects will be felt right across the network, not only at the sites affected. Collaboration – with colleagues, suppliers and clients – has to be at the heart of an effective approach to climate.
Coeus Consulting’s recent CIO and IT sustainability survey found that 90% of IT leaders were aware of the need to meet sustainability targets – yet those same leaders were often confined to tackling “low-hanging fruit” such as recycling and cloud hosting. “Organisations could be missing a trick here, relegating technology’s contribution to sustainability to a ‘support’ role,” the survey concludes.
To avoid pulling in different directions, organisations need to share a single, holistic view of their climate risk. An ESG strategy that will not just appease investors, but actually build business resilience, must be based on science-backed, decision-useful and shareable climate intelligence. Crucially, it helps to secure buy-in from colleagues, stakeholders and leadership – which nearly two-thirds of CIO & IT survey respondents cited as the biggest obstacle to achieving their sustainability goals.
Net-zero dominates the ESG conversation – but smart businesses know that the ultimate goal of resilience can’t be achieved by decarbonisation alone.
More than 25% of global CO2 emissions and 50% of global GDP are now covered by net-zero commitments. Decarbonisation is critical for stabilising our climate longer-term – but it won’t protect us from the climate volatility that is already locked in by past emissions. Organisations need to take a more holistic approach to ESG, with a particular focus on adaptation, if they are to withstand inevitable disruption and damage.
Sustainability – and resilience – will look very different from sector to sector and company to company. Depending on your business, your risks could be physical, such as flooding or wildfire, transition risks such as stranded assets, or reputational loss from lagging behind competitors. Once you can see exactly what, when and where your risks are, you can take effective action.
Technology-driven solutions, such as on-demand, asset-centric climate intelligence, are a vital key in unlocking an ESG transformation – with IT professionals at the forefront.
With so many budgetary pressures, it can be tempting to kick the ESG can down the road. Many organisations are doing just that: 43% of executives say significant investment in sustainability is yet to materialise. But climate change isn’t a future issue. It’s affecting lives, livelihoods and bottom lines today.
Globally, assets worth US$2.4tn are at risk from climate change. The tech sector, with its reliance on suppliers, utilities and fixed physical assets, is highly vulnerable to both direct and indirect impacts, from floods to power outages to supply chain blockages.
These impacts could strike at any time and, according to a study for the US General Services Administration (GSA), may “result in changes to functionality, quality of service, return on investment, business continuity and cost, in addition to cascading impacts on the diverse customers that rely upon them”. It adds: “Value protection strategies are required to address these risks.”
According to the GSA’s study, “working with stakeholders to build consensus and collect the information each offers is to effectively build resilience”. Using climate intelligence to identify risk, share information, reach agreement and secure resources is a smart move. I think of it as the new 21st-century decision-making superpower.
Businesses can’t outrun the effects of climate change, but climate-intelligent organisations will be the quickest to close the gap.
By working in partnership around a single source of truth on climate risk and opportunities, IT professionals are instrumental in building business resilience. From identifying vulnerabilities to championing game-changing tech solutions, IT leaders can make the difference between ESG that is just box-ticking, or truly business-transforming.