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Bridging the Gap: Aligning IT Strategies with Sustainable Goals

As the world grapples with the challenges of climate change and resource depletion, businesses are under increasing pressure to align their sustainability operations with environmental targets. For many companies, the focus has been on carbon footprint reduction, but a growing number are now recognizing the need to address the environmental impact of IT strategies.


Bridging the Gap: Aligning IT Strategies with Sustainable Goals
Bridging the Gap: Aligning IT Strategies with Sustainable Goals

Understanding the Environmental Impact of IT: Carbon Footprint and Energy Consumption


The sheer scale of the IT industry's environmental footprint is staggering. Data centers, for example, collectively consume more energy annually than some countries, racking up to 200 terawatt hours (TWh). Astonishingly, a single Data Center can use as much electricity as 50,000 homes [ 1 ]. This energy consumption contributes to 0.3% of total global carbon emissions, a figure that rises to 2% when considering networked devices like laptops, smartphones, and tablets [ 1 ].


Moreover, the production and disposal of IT hardware significantly add to electronic waste (e-waste), another pressing environmental issue. The world generated 59.4 million metric tons of e-waste in 2022, a number expected to rise to 74.7 million metric tons by 2030 [ 2 ]. Worryingly, only a mere 10% of IT hardware is recycled, exposing a glaring sustainability gap [ 3 ].


The Business Benefits of Green IT: The Correlation with ESG Scores


Aligning IT strategies with environmental targets is not just an ethical choice, but it's also a strategic business move. According to a study by Deloitte, a significant correlation exists between a company's ESG (Environmental, Social, and Governance) score and its market value. Specifically, a 10-point change in a company's ESG score is associated with a roughly 1.2x increase in its EV/EBITDA multiple [ 4 ]. An improvement by the same margin in the ESG score corresponds with an almost 1.8x increase in the EV/EBITDA multiple [ 4 ]. These numbers underscore the crucial role of sustainable IT practices in driving business growth.


However, despite compelling data supporting sustainable IT solutions, there remains a gap in awareness and implementation. Only 43% of global executives are aware of their organization's IT footprint [ 3 ], and while half of the companies claim to have a company-wide sustainability strategy, only 18% possess a comprehensive sustainable IT strategy that includes specific goals and timelines [ 3 ].


This disparity presents a double-edged sword for businesses. On one side, it signals a lack of full awareness among organizations about the advantages of eco-friendly IT strategies. On the flip side, it unveils an untapped market for companies willing to align their IT operations with sustainability objectives, thereby gaining a significant competitive advantage.


Implementing Sustainable IT Strategies: From Diagnosis to Operation


To close this gap, organizations need a clear sustainability roadmap for IT. TaliesinEdge Consulting recommends and provides a three-tier approach:

  1. Diagnostic Assessment and Strategy Alignment: Start with a benchmarking evaluation of your current IT operations and environmental impact. Then, align your sustainable IT strategy with your overall business objectives.

  2. Robust Governance for Sustainable IT: Create a specialized team focused on sustainable IT and ensure support from top leadership. Align your services, business models, and market strategies with your sustainable IT initiatives.

  3. Operationalizing Sustainable IT Initiatives: Make sustainability a core component of your software architecture. Develop a sustainability culture among your teams and select the right sustainable IT use cases to scale.

By following this roadmap, businesses can not only reduce their environmental impact but also enhance their market competitiveness, fully committing to the triple bottom line of people, planet, and profit.


Sustainable IT is no longer optional; it's a business imperative. By taking decisive action today, organizations can play a pivotal role in building a sustainable future and gaining a competitive edge in the market.


Sources:

[ 1 ] Ensmenger, Nathan, and Rebecca Slayton. "The Cloud is Material: A Conversation with Nathan Ensmenger and Rebecca Slayton." MIT-SERC, 2021.

[ 2] Pratt, Mary K. "How to Make IT Sustainability Sustainable." Computerworld, 11 Nov. 2021.

[ 3 ] Capgemini Research Institute. "Sustainable IT Survey." December 2020-January 2021.

[ 4 ] Deloitte. "Does a Company's ESG Score Have a Measurable Impact on Its Market Value?" Deloitte Switzerland, 2021.

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