How CIOs can build the business case for net-zero
Today’s climate crisis is affecting the global economy, financial stability and the value of investments. Companies face physical risks, such as the operational impacts of extreme weather events and transition risks, like changes in markets, regulations and technologies. Therefore, climate change considerations for businesses are no longer the sole responsibility of the corporate social responsibility (CSR) or sustainability departments. They have become a board-level issue as investors demand to know how companies are addressing climate change risks and taking the opportunity to transform their business models to drive sustainable competitive advantage and ensure operational resiliency.
Increasingly, companies are feeling pressure from stakeholders. Policymakers and regulators are the sources of this significant pressure, but customers and employees are not far behind. They demand ambitious emissions reduction targets as well as resiliency for the future impacts of climate change.
The scale of the challenge we face is profound, and the solutions are multi-faceted. Fueled by the COVID-19 crisis, digitization is accelerating rapidly while helping unlock the net-zero transformation. Aside from leading digital transformation in companies, CIOs are becoming key players in connecting the dots and seeking decarbonization strategies.
Digitization enables new forms of collaboration, transparency and control, providing data for better decision-making for both companies and consumers. It is developing fast, and with it, the demand for energy and valuable resources.
Fueled by the COVID-19 crisis, digitization is accelerating rapidly while helping unlock net-zero transformation. Aside from leading digital transformation, CIOs are becoming key players in connecting the dots and seeking decarbonization strategies.
Key principles of digital decarbonization: What every CIO needs to know for a net-zero future:
- Determine your strategy: Effective decarbonization strategies have solid plans based on accurate awareness of the current baseline and an agreed target that is ambitious and achievable. Having the right systems and tools to measure, monitor and manage the often large, complex data involved is essential for an accurate understanding of impact. This is especially important when assessing the impact of increasingly digitalized operations.
- Get others to buy-in: A common question from our clients is, “How do I get the rest of the business on board, particularly senior management?” The good news is that it’s starting to get easier. Our clients find that there is growing ambition to tackle climate through all levels of the business, helping to drive change. There is plenty of compelling evidence that investors, employees and customers want businesses to take action on climate change. They are aware that inaction is a huge business risk and that there is a great opportunity in action – what is good for the planet is good for business.
Team engagement is also crucial. Educate the broader teams about why your targets are so important and their roles within the strategy. Involve them in the decision-making processes. This will mean they are much more likely to get on board and you will have much less of a challenge and work to do later.
- Strategize data collection and reporting: A sustainability manager could spend most of their time collecting, reporting and deriving insights from data. Any large company has multiple platforms or high-tech systems in place (CRM systems, ERP platforms, etc.), with data constantly flowing from one platform to another. This is where IT system integration becomes a necessity. Specialist software systems and external support can help overcome these challenges while delivering additional benefits around efficiency and transparency.
- Find innovations and efficiencies in reducing emissions: Achieving sustainability targets is a long-term exercise and the results are often difficult to measure. Therefore, it could be hard for the sustainability team to compete with other business priorities that can demonstrate clear revenue. Again, it’s about making the business case for the long-term resilience of your company and reputational returns based on innovation and efficiency. You might find our e-book helpful if you need help making the financial case for climate action.
- Decarbonized IT: Digital technology currently accounts for a large proportion of energy use for both organizations and society at large. The digital sector can take the lead in accelerating demand for 100% renewable energy, and research has shown that digital technology can help reduce global emissions by 15%. Reducing your IT footprint will have tremendous decarbonization results.
Reducing carbon emissions and driving innovation for better business processes go hand-in-hand. The current state of the global climate, coupled with evolving stakeholder demands has left no room for complacency on decarbonization. Organizations that set ambitious targets and resolutely invest in them will enjoy improved business resilience and assured market competence.
While businesses may be at different stages of readiness, it is crucial to start the decarbonization journey immediately and on the right footing. In this digital era where digital strategies underscore every major aspect of the organization, CIOs must play a defining role to integrate, scale and mainstream decarbonization initiatives across the enterprise spectrum, bolstering the business resilience and sustainability of the private sector.