Striking the right balance between sustainability and IT goals
Striking the right balance between sustainability and IT goals
8
min read
The perception that achieving IT sustainability is too costly should be challenged by business and technology leaders.
Whilst organisational knowledge is growing, teams, projects, and business cases are not attuned to reaching carbon goals.
IT sustainability has several benefits beyond mitigating environmental impact and treating it simply as a cost misses the business value potential.
When greater investment is needed, communicate a more comprehensive vision of the benefits that can be achieved.
Organisations of all sizes can take ‘low-cost, high value’ actions to reduce their carbon emissions.
Growing global concern about the climate crisis is increasing pressure on organisations to take accountability for their carbon emissions. IT has a critical role to play but worries about what to do, how much it will cost, and how to measure success are preventing some from taking decisive action. Demystifying sustainable IT within the enterprise could be the most important step.
Beloved outdoor clothing brand Patagonia has put sustainability at the heart of its business, using cloud services to reduce energy consumption and improve transparency over its supply chain. The US supermarket chain Walmart, one of the largest companies in the world, aims to harvest enough wind, solar and other energy sources to power their facilities with 100% renewable energy by 2035. Consumer goods industry giant Unilever announced in April it had become a cloud-only enterprise, making progress on its sustainability targets while also “enabling accelerated product launches, enhanced customer service and improved operational efficiency.”
Whilst encouraging examples, they remain the exception rather than the rule today. Globally agreed climate goals, such as the Paris Agreement in 2015, called for a significant reduction in greenhouse gas emissions to limit global warming to well below 2 degrees Celsius above pre-industrial levels. The information technology sector remains a driver of climate change and part of the solution to reducing the impact.
Despite the increased visibility, global sustainability goals are still far behind targets to avoid even the best-case scenarios for climate breakdown by 2050 and the end of the century.
The business and IT community are critical stakeholders—without their cooperation and action the likelihood of achieving those targets is remote. For those companies in the preliminary stage of their journey—and those who are yet to make a start—confusion, lack of data and awareness, and concerns about costs are leading to little or no action.
We take a detailed look at the challenges, opportunities, and solutions that organisations should prioritise to accelerate their sustainability journey.
Impact
Climate change is already having a devastating impact on businesses around the world, and the costs are continuing to rise. A study by the Swiss Re Institute found that global wealth could be significantly reduced, with the resulting decrease in annual global economic output worldwide estimated at $23 trillion.
Extreme weather events such as hurricanes, floods, and wildfires are becoming more frequent and severe—2023 has already seen several major destructive events—causing billions of dollars in damage to businesses every year, and these are just the direct financial costs. Reputational damage is becoming a more pressing concern as consumers, investors, and other stakeholders alike are increasingly demanding businesses act now to reduce their environmental impact.
Estimated global data centre electricity consumption in 2022 was 240-340 TWh, or around 1-1.3% of global final electricity demand. This excludes energy used for cryptocurrency mining, estimated to be around 110 TWh in 2022, or 0.4% of annual global electricity demand.
Today, the ICT sector makes up 2-3% of the world’s carbon footprint and is expected to account for 7-8% by 2030 if no action is taken to reduce the sector’s environmental impact. Technology-native giants like Google, Facebook, Apple, and Microsoft—cash-rich and with enviable in-house technical expertise—have made big strides in reducing their environmental impact. But whilst some large multinational companies have also invested heavily in their IT infrastructure to reach their commitments, others are yet to truly get moving.
Challenges
Companies should be open eyed—the problems are numerous, and investment is required—but the first step is to have a clear understanding of the challenges.
One fundamental challenge is that the IT sector is constantly evolving, making it difficult for companies to keep up with the latest best practices for environmental sustainability. Secondly, and depending on the industry, companies are dealing with mountains of technical debt—a significant cost and cybersecurity risk in addition to the environmental impact.
Secondly, the environmental impact of IT is not evenly distributed around the world. For example, most data centres are in developed countries, which have more access to renewable energy and other sustainable technologies. Developing countries often (there are exceptions) must rely on fossil fuels to power their data centres, and they may not have the resources to invest in energy-efficient equipment or recycling programs.
A 2022 report found that IT sustainability initiatives can help companies reduce their carbon emissions by up to 30%.
The challenges faced can be categorised into four broad areas - resource consumption, energy consumption, and e-waste are produced because of IT, whereas pollution covers the result of business practices.
Resource consumption covers the production of IT equipment requires the extraction and consumption of various natural resources such as silicon, rare earth elements, and metals like copper and gold. Water usage is high in the production of technology equipment and to cool equipment in data centres. Chemicals and solvents are also used during the production process. Packaging can contain synthetic materials such as plastic.
Energy consumption is inherently intensive for the manufacture and use of IT equipment and is interconnected across several factors. Energy consumption is usually viewed through the prism of data centres which are a large part of the issue, but the other factors should not be ignored. The energy consumption associated with raw material extraction and processing can vary significantly depending on factors such as the type of material, the location of mining operations, the efficiency of processes, and the energy mix of the region. Additionally, end-user devices of all kinds are consuming energy, and their lifecycle management is often inadequately done. Software inefficiencies and the intensive processing requirements of artificial intelligence (AI) also contributes.
Electronic waste (e-waste) is the discarded electronic devices and equipment, with a battery or plug, that have reached the end of their useful life or are no longer wanted. E-waste is the fastest growing waste stream in the world and having a growing detrimental impact on the environment, and public health. Leaching of toxic substances from devices, such as lead, mercury, and cadmium, into the natural environment contaminates ecosystems. Air pollution from the improper burning of devices in open-air setting releases harmful chemicals and heavy metals into the atmosphere. The mountains of e-waste also take up land, and improper recycling and disposal also consumers energy.
Myth: “It is too costly to get started – we need to make big investments from day one and won’t see the benefits for several years.” Reality: Actions can be taken without major investment, and you may already have budgeted for changes that can bring benefits with minor adjustments. The changes you make often lead to cost savings.
Pollution takes place through IT-driven resource consumption, energy consumption, and e-waste. However, business practices in general contribute to pollution through their use of offices, factories, and other facilities, commuting and business travel, and the transportation of goods to name just a few examples.
With so many complex challenges to overcome, and in so many areas, businesses and individuals could be forgiven for a sense of inertia. While it is true that addressing these challenges can be daunting, it is essential to recognise that there is a spectrum of attitudes and actions among businesses and individuals—it would be incorrect to assume a universal sense of apathy or lack of will.
Global electronic waste volume is projected to grow to 74.7 Mt by 2030, meaning it will have almost doubled in only 16 years. In 2021, the world generated an estimated 57.4 million metric tons of e-waste.
There are proactive efforts, awareness campaigns, technological innovations, and regulatory measures in place (with more on the way) to address these challenges. The level of engagement and commitment varies among different stakeholders, but there is a growing recognition of the importance of sustainable practices and environmental responsibility in both the business and individual sectors.
Opportunities
While there is a need for businesses to recognise the ethical and moral imperatives to mitigating climate change, the momentum cannot rely solely on this—embracing sustainability and taking proactive measures to address climate change can lead to several potential benefits and opportunities, including for example:
Cost savings through reductions in energy consumption, waste production, and other environmental costs. This can lead to significant cost savings over time if done well.
Competitive advantage as more customers and investors demand sustainable products and services, businesses that implement sustainable IT will gain a competitive advantage.
Innovation and market leadership through the development of new products and services that are more efficient and environmentally friendly.
Regulatory compliance ahead of governments around the world introducing new rules and restrictions.
Risk mitigation and adaptations as more extreme weather events, resource scarcity, and energy price volatility become grater issues.
Increased access to capital because businesses that implement sustainable IT will have better access to capital as investors become more sensitive to climate inaction and are unwilling to support environmentally unfriendly activities.
IT plays one of the most critical roles in achieving opportunities that can be seized by businesses of all shapes, sizes, industries, and geographies. If done right, IT can deliver significant environmental, social, and economic benefits.
Solutions
Achieving IT sustainability is a multifaceted endeavour, involving a range of solutions and the active participation of various stakeholders. We have summarised the solutions across five key areas.
Executive leadership must lead a strategic, multi-dimensional approach—effectively implementing changes that intersect people, process, and technology over a sustained period with the entire organisation in tow—is the most effective way to realise the benefits of long-term IT sustainability success. Organisations that implement changes piece meal and without a strategic vision will see peripheral benefits but will not be positioned for long-term gains, as the momentum is unlikely to be persistent.
Stakeholders are key to unlocking the benefits of IT sustainability by creating a desire for change within IT, the wider organisation, and external stakeholders. With senior business and IT leadership engagement and sponsorship, implementing a strategic roadmap of change becomes easier, as does changing the organisational culture to enable employees to embrace new sustainable ways of working. Stakeholders across the private and public sector, as well as communities, should be engaged to ensure there is alignment and support for the initiative.
Industry cost savings from process optimisation could be 12 billion USD by 2030. Additionally, the IT industry could generate 3 billion USD through industrial machinery optimised with smart sensors.
IT strategy involves designing the long-term roadmap to prioritise sustainable architectures, solutions, and technologies whilst remaining aligned with business strategy. Optimising data centres, networks, and data storage, moving key workloads to the cloud, better lifecycle management, consolidating apps and services, implementing better power management software, and using analytics to better monitor sustainability will make a substantial difference to the
IT sourcing: making the right IT sourcing decisions is crucial, and aligning to standards is a helpful way of guiding procurement teams to understand how the organisations needs can be met whilst achieving green procurement outcomes. Similarly, by embracing more sustainable solutions and fostering collaboration within IT and its provider ecosystem, organisations can make considerable progress in aligning IT operations with environmentally responsible and socially conscious principles.
Organisational culture that is supportive and engaged can foster a sense of ownership, collaboration, and innovation, driving the adoption of sustainable practices. When sustainability is deeply embedded in the organization's values and beliefs, employees are more likely to embrace eco-conscious behaviours and support IT-driven sustainability initiatives.
Conclusion
By embracing IT practices, technologies, and cultural change, every organisation can realise the benefits of a more sustainable future. This transformation is not only an ethical imperative but also strategically advantageous. Achieving sustainable IT requires a comprehensive and multi-faceted approach, focusing on five critical areas of executive leadership, stakeholder engagement, IT strategy, IT sourcing, and organisational culture.
Organisations can achieve significant cost savings through optimised data centres, leveraging cloud solutions, consolidating and better managing infrastructure, and optimising processes and hardware and software lifecycle management—these are just some of the options available.
Moreover, sustainable practices enhance brand reputation and attract environmentally conscious consumers, investors, and partners, granting a distinct competitive advantage.
Finally, it is possible to accelerate the achievement of benefits through leveraging ready-made practices and embedding initiatives into in-flight and future projects. To learn more about how Halemon helps its clients achieve a sustainable IT organisation and how you can leverage our Sustainability Playbook, get in touch.
Beloved outdoor clothing brand Patagonia has put sustainability at the heart of its business, using cloud services to reduce energy consumption and improve transparency over its supply chain. The US supermarket chain Walmart, one of the largest companies in the world, aims to harvest enough wind, solar and other energy sources to power their facilities with 100% renewable energy by 2035. Consumer goods industry giant Unilever announced in April it had become a cloud-only enterprise, making progress on its sustainability targets while also “enabling accelerated product launches, enhanced customer service and improved operational efficiency.”
Whilst encouraging examples, they remain the exception rather than the rule today. Globally agreed climate goals, such as the Paris Agreement in 2015, called for a significant reduction in greenhouse gas emissions to limit global warming to well below 2 degrees Celsius above pre-industrial levels. The information technology sector remains a driver of climate change and part of the solution to reducing the impact.
Despite the increased visibility, global sustainability goals are still far behind targets to avoid even the best-case scenarios for climate breakdown by 2050 and the end of the century.
The business and IT community are critical stakeholders—without their cooperation and action the likelihood of achieving those targets is remote. For those companies in the preliminary stage of their journey—and those who are yet to make a start—confusion, lack of data and awareness, and concerns about costs are leading to little or no action.
We take a detailed look at the challenges, opportunities, and solutions that organisations should prioritise to accelerate their sustainability journey.
Impact
Climate change is already having a devastating impact on businesses around the world, and the costs are continuing to rise. A study by the Swiss Re Institute found that global wealth could be significantly reduced, with the resulting decrease in annual global economic output worldwide estimated at $23 trillion.
Extreme weather events such as hurricanes, floods, and wildfires are becoming more frequent and severe—2023 has already seen several major destructive events—causing billions of dollars in damage to businesses every year, and these are just the direct financial costs. Reputational damage is becoming a more pressing concern as consumers, investors, and other stakeholders alike are increasingly demanding businesses act now to reduce their environmental impact.
Estimated global data centre electricity consumption in 2022 was 240-340 TWh, or around 1-1.3% of global final electricity demand. This excludes energy used for cryptocurrency mining, estimated to be around 110 TWh in 2022, or 0.4% of annual global electricity demand.
Today, the ICT sector makes up 2-3% of the world’s carbon footprint and is expected to account for 7-8% by 2030 if no action is taken to reduce the sector’s environmental impact. Technology-native giants like Google, Facebook, Apple, and Microsoft—cash-rich and with enviable in-house technical expertise—have made big strides in reducing their environmental impact. But whilst some large multinational companies have also invested heavily in their IT infrastructure to reach their commitments, others are yet to truly get moving.
Challenges
Companies should be open eyed—the problems are numerous, and investment is required—but the first step is to have a clear understanding of the challenges.
One fundamental challenge is that the IT sector is constantly evolving, making it difficult for companies to keep up with the latest best practices for environmental sustainability. Secondly, and depending on the industry, companies are dealing with mountains of technical debt—a significant cost and cybersecurity risk in addition to the environmental impact.
Secondly, the environmental impact of IT is not evenly distributed around the world. For example, most data centres are in developed countries, which have more access to renewable energy and other sustainable technologies. Developing countries often (there are exceptions) must rely on fossil fuels to power their data centres, and they may not have the resources to invest in energy-efficient equipment or recycling programs.
A 2022 report found that IT sustainability initiatives can help companies reduce their carbon emissions by up to 30%.
The challenges faced can be categorised into four broad areas - resource consumption, energy consumption, and e-waste are produced because of IT, whereas pollution covers the result of business practices.
Resource consumption covers the production of IT equipment requires the extraction and consumption of various natural resources such as silicon, rare earth elements, and metals like copper and gold. Water usage is high in the production of technology equipment and to cool equipment in data centres. Chemicals and solvents are also used during the production process. Packaging can contain synthetic materials such as plastic.
Energy consumption is inherently intensive for the manufacture and use of IT equipment and is interconnected across several factors. Energy consumption is usually viewed through the prism of data centres which are a large part of the issue, but the other factors should not be ignored. The energy consumption associated with raw material extraction and processing can vary significantly depending on factors such as the type of material, the location of mining operations, the efficiency of processes, and the energy mix of the region. Additionally, end-user devices of all kinds are consuming energy, and their lifecycle management is often inadequately done. Software inefficiencies and the intensive processing requirements of artificial intelligence (AI) also contributes.
Electronic waste (e-waste) is the discarded electronic devices and equipment, with a battery or plug, that have reached the end of their useful life or are no longer wanted. E-waste is the fastest growing waste stream in the world and having a growing detrimental impact on the environment, and public health. Leaching of toxic substances from devices, such as lead, mercury, and cadmium, into the natural environment contaminates ecosystems. Air pollution from the improper burning of devices in open-air setting releases harmful chemicals and heavy metals into the atmosphere. The mountains of e-waste also take up land, and improper recycling and disposal also consumers energy.
Myth: “It is too costly to get started – we need to make big investments from day one and won’t see the benefits for several years.” Reality: Actions can be taken without major investment, and you may already have budgeted for changes that can bring benefits with minor adjustments. The changes you make often lead to cost savings.
Pollution takes place through IT-driven resource consumption, energy consumption, and e-waste. However, business practices in general contribute to pollution through their use of offices, factories, and other facilities, commuting and business travel, and the transportation of goods to name just a few examples.
With so many complex challenges to overcome, and in so many areas, businesses and individuals could be forgiven for a sense of inertia. While it is true that addressing these challenges can be daunting, it is essential to recognise that there is a spectrum of attitudes and actions among businesses and individuals—it would be incorrect to assume a universal sense of apathy or lack of will.
Global electronic waste volume is projected to grow to 74.7 Mt by 2030, meaning it will have almost doubled in only 16 years. In 2021, the world generated an estimated 57.4 million metric tons of e-waste.
There are proactive efforts, awareness campaigns, technological innovations, and regulatory measures in place (with more on the way) to address these challenges. The level of engagement and commitment varies among different stakeholders, but there is a growing recognition of the importance of sustainable practices and environmental responsibility in both the business and individual sectors.
Opportunities
While there is a need for businesses to recognise the ethical and moral imperatives to mitigating climate change, the momentum cannot rely solely on this—embracing sustainability and taking proactive measures to address climate change can lead to several potential benefits and opportunities, including for example:
Cost savings through reductions in energy consumption, waste production, and other environmental costs. This can lead to significant cost savings over time if done well.
Competitive advantage as more customers and investors demand sustainable products and services, businesses that implement sustainable IT will gain a competitive advantage.
Innovation and market leadership through the development of new products and services that are more efficient and environmentally friendly.
Regulatory compliance ahead of governments around the world introducing new rules and restrictions.
Risk mitigation and adaptations as more extreme weather events, resource scarcity, and energy price volatility become grater issues.
Increased access to capital because businesses that implement sustainable IT will have better access to capital as investors become more sensitive to climate inaction and are unwilling to support environmentally unfriendly activities.
IT plays one of the most critical roles in achieving opportunities that can be seized by businesses of all shapes, sizes, industries, and geographies. If done right, IT can deliver significant environmental, social, and economic benefits.
Solutions
Achieving IT sustainability is a multifaceted endeavour, involving a range of solutions and the active participation of various stakeholders. We have summarised the solutions across five key areas.
Executive leadership must lead a strategic, multi-dimensional approach—effectively implementing changes that intersect people, process, and technology over a sustained period with the entire organisation in tow—is the most effective way to realise the benefits of long-term IT sustainability success. Organisations that implement changes piece meal and without a strategic vision will see peripheral benefits but will not be positioned for long-term gains, as the momentum is unlikely to be persistent.
Stakeholders are key to unlocking the benefits of IT sustainability by creating a desire for change within IT, the wider organisation, and external stakeholders. With senior business and IT leadership engagement and sponsorship, implementing a strategic roadmap of change becomes easier, as does changing the organisational culture to enable employees to embrace new sustainable ways of working. Stakeholders across the private and public sector, as well as communities, should be engaged to ensure there is alignment and support for the initiative.
Industry cost savings from process optimisation could be 12 billion USD by 2030. Additionally, the IT industry could generate 3 billion USD through industrial machinery optimised with smart sensors.
IT strategy involves designing the long-term roadmap to prioritise sustainable architectures, solutions, and technologies whilst remaining aligned with business strategy. Optimising data centres, networks, and data storage, moving key workloads to the cloud, better lifecycle management, consolidating apps and services, implementing better power management software, and using analytics to better monitor sustainability will make a substantial difference to the
IT sourcing: making the right IT sourcing decisions is crucial, and aligning to standards is a helpful way of guiding procurement teams to understand how the organisations needs can be met whilst achieving green procurement outcomes. Similarly, by embracing more sustainable solutions and fostering collaboration within IT and its provider ecosystem, organisations can make considerable progress in aligning IT operations with environmentally responsible and socially conscious principles.
Organisational culture that is supportive and engaged can foster a sense of ownership, collaboration, and innovation, driving the adoption of sustainable practices. When sustainability is deeply embedded in the organization's values and beliefs, employees are more likely to embrace eco-conscious behaviours and support IT-driven sustainability initiatives.
Conclusion
By embracing IT practices, technologies, and cultural change, every organisation can realise the benefits of a more sustainable future. This transformation is not only an ethical imperative but also strategically advantageous. Achieving sustainable IT requires a comprehensive and multi-faceted approach, focusing on five critical areas of executive leadership, stakeholder engagement, IT strategy, IT sourcing, and organisational culture.
Organisations can achieve significant cost savings through optimised data centres, leveraging cloud solutions, consolidating and better managing infrastructure, and optimising processes and hardware and software lifecycle management—these are just some of the options available.
Moreover, sustainable practices enhance brand reputation and attract environmentally conscious consumers, investors, and partners, granting a distinct competitive advantage.
Finally, it is possible to accelerate the achievement of benefits through leveraging ready-made practices and embedding initiatives into in-flight and future projects. To learn more about how Halemon helps its clients achieve a sustainable IT organisation and how you can leverage our Sustainability Playbook, get in touch.
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We are ready to help. Get in touch.
Untangling complexity. Delivering results.
© Halemon Limited 2019-2023
Untangling complexity. Delivering results.
© Halemon Limited 2019-2023
Untangling complexity. Delivering results.
© Halemon Limited 2019-2023