Almost a third of British businesses have signed up to the United Nations’ Race to Zero campaign, while all large companies registered in the UK are required to disclose their plans for achieving net-zero greenhouse gas emissions before next year.
Each firm will be expected to calculate its carbon footprint, establish long- and short-term reduction targets with a sound basis in science, allocate funds and monitor progress.
They must consider not only the operational emissions under their direct control (scopes one and two), but also the scope-three emissions that arise at each end of their value chains. Upstream scope-three emissions include those generated by suppliers. Downstream ones include those created by the consumption and disposal of its products by customers.
This is a huge change that will require strategic-level input from every member of the C suite – including the CIO.
“The CIO and their team play a crucial role in their company’s carbon-reduction programme. This is especially true when that company, like ours, is a tech firm with a digital offering,” says Roy Aston, group CIO at online payments provider Paysafe. “They can factor environmental considerations into their entire technology strategy, including ensuring that they’re adopting a green approach with their IT infrastructure – how they build their tech, store data and recycle equipment. They have influence in so many areas.”
One of the biggest environmental wins can come from shifting to a public cloud computing service. In a 2021 study commissioned by Amazon Web Services (AWS) – a major provider of cloud services – analysts at 451 Research reported that cloud servers are roughly three times more energy efficient than the computing resources of the average European company.
The CIO can ensure that environmental efforts remain front and centre in much of their company’s decision-making
The researchers also found that most businesses don’t prioritise the sustainability of their data-centre infrastructure, including its associated energy costs.
“Switching to cloud computing reduces the electricity consumed by data centres by consolidating platforms and transferring more transactional systems to the provider,” Aston says. “At Paysafe, we have moved about 70% of our workload into the cloud and consolidated or decommissioned many of our old systems and data centres.”
According to the 451 Research study, AWS’s clients could potentially cut the greenhouse gas emissions of an average workload by up to 96% once the company meets its goal to be powered by 100% renewable energy, which it says it’s set to do by 2025.
Google has pledged to do the same before 2030, while Microsoft reckons that it will actually be carbon-negative by that time.
Setting up sustainable partnerships
CIOs should also consider how they work with their partners, advises Martin Riley, director of managed security services at cybersecurity specialist Bridewell Consulting, which has been carbon-negative since October 2021.
“The right partner will show a commitment to being carbon-negative through offsetting and community-led renewable energy initiatives, enabling companies to balance out their own footprints,” he says.
Establishing a sustainable supply chain means considering not only direct suppliers but every link beyond them, informing these players about best practice and providing them with sustainability training. And, says Arthur Hu, CIO of electronics manufacturer Lenovo, a code of conduct and clear targets need to be established from the start as part of a formal process.
“Make environmental, social and corporate governance considerations part of your procurement process – for example, updating your evaluation scorecards to include an ESG component,” Hu advises. “Communicate clearly and ahead of time via executive interlocks with suppliers so they can prepare. In this way, you can extend your influence beyond your company and into an ecosystem that reflects the organisation’s priorities.”
Lenovo, he reveals, is on track to be purchasing 90% of its electricity from renewable sources and removing 1 million tons of greenhouse gas emissions from its supply chain by 2025. The company has set itself a deadline of 2030 for cutting its scope-one and two emissions in half and reducing scope-three emissions throughout its value chain by 25%.
Given that many CEOs won’t be in the same post in years to come, their firms would be well advised to set their environmental commitments in stone to ensure continuity of effort under new management. This can be done by signing up for projects such as the Science Based Targets initiative or the B Corporation certification scheme.
Mohammad Kamal Syed is chief investment officer and head of asset management at private bank Coutts, which achieved B Corp status last year. One of the advantages of seeking such certification, he says, is that the so-called B Impact Assessment tool (BIA) “provides us with a clear idea of what we need to change, such as processes and frameworks, to enable us to become a more sustainable business. The output BIA scores then help us find a way to track our sustainable progress.”
A global survey of CIOs conducted by IBM late last year found that 42% of respondents expected technology to have a significant impact on sustainability over the next three years.
Hu notes that, given how technology is “embedded in almost every aspect of any organisation, the CIO can ensure that environmental efforts remain front and centre in much of their company’s decision-making. We’re often at the table when setting objectives and key performance indicators, so we can advocate for measuring the enterprise’s climate impact as part of our performance metrics.”
He adds: “The easiest wins are likely to come in areas that the CIO can control directly – internal decisions to prioritise greener technologies.”
