Sustainability struggles to make progress against economic headwinds

Last week, Deloitte stated that CIOs are essential if ESG goals are to be met. Technology heads are increasingly being expected to minimize or at least reduce the environmental impact of the technology and infrastructure they’re responsible for. However, new research from Software AG has found that the majority of businesses are approaching sustainability and digital transformation as separate initiatives, which is surely going to limit the likely success of CIOs in their sustainability remit.

The report, which surveyed 2,000 IT decision-makers globally, found that almost all (95%) of leaders agree that sustainability is either a top or high priority, and even more (97%) agree that other firms’ sustainability credentials are either essential or important in their own buying decisions. This sounds like a win for the planet but some findings of the research cast serious doubt on this apparent collective commitment to sustainability.

Digital transformation is not sustainable by default

Digital transformation remains a priority for organizations. Two thirds (69%) of CEOs plan to divert resources from other areas into their digital transformation efforts. This has the potential to enhance sustainability as technologies such as cloud, data integration and edge computing are deployed.

However, despite the claims of many vendors to the contrary these initiatives are not greener by default. Whilst moving infrastructure to the cloud may seem more sustainable due to the economies of scale available, and the potential to reduce waste and gain more granular visibility of infrastructure, much rests on how efficient that cloud infrastructure is as well as where it is, and the accuracy of GHG emissions measurements. Organizations need to put in some serious due diligence to establish the extent to which their digital transformation will improve their ESG credentials.

However, the majority (87%) of organizations tackle sustainability and digital transformation separately. The chances are that this sustainability focused due diligence just isn’t happening in the majority of cases.

Furthermore, nearly one third (32%) Some organizations say they lack the technology to deliver sustainability initiatives and even when it is available, it is poorly implemented and/or underutilized according to 47% of companies. 36% say they lack the capacity to track the effectiveness of sustainability initiatives.

Using technology for sustainable growth

One of the starkest findings of the research is that 84% of the leaders surveyed said that sustainability would become less of a priority in the face of a global downturn, and 82% admit that they would accept regulatory penalties to avoid taking on sustainability initiatives. This suggests that greenwashing will continue to be a problem for consumers and businesses seeking genuinely sustainable goods and services.

However, on some level, business leaders are aware that inaction carries a cost. 87% of companies believe that they will lose investors if they don’t have a clear sustainability strategy, and 84% acknowledge that they are likely to lose staff. Gen Z can be pretty picky when it comes to finding employers that reflect their values, and the current skills shortage means that the power is likely to remain with them unless the economic situation worsens significantly.

Commercial and sustainability objectives do not have to be mutually exclusive. Organizations are increasingly integrating their ESG and financial reporting and using technology to build more sustainable growth. Promisingly, a third of organizations have already integrated sustainability plans into their technology roadmap.

Sanjay Brahmawar, CEO, Software AG commented: “In the current climate, it’s no surprise that commercial objectives are a top priority – they have to be otherwise organizations cannot continue to operate. We are keen to help organizations to find solutions using the ‘Genius of AND’, where they don’t have to be torn between commercial and sustainability objectives. The right application of mission critical technologies can make enterprises more connected. When this happens, and data is free to move around it and be accessible to everyone who needs it, we will start to see progress in multiple areas at once.”

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