CIOs and sustainable technology | Deloitte Insights

While chief sustainability officers and other leaders have spearheaded environmental sustainability efforts in the past, CIOs are now essential in meeting those goals. CIOs recognize that embracing the two-tiered challenge can be a differentiator for themselves and their organization, creating a competitive advantage. Therefore, they are looking at how to deploy technology more holistically and help business partners understand the environmental impact of each new solution by involving more voices and perspectives throughout the organization.

“Most people think of sustainability as somebody else’s problem to solve. The CIO has a great responsibility and incredible opportunity to combine the power of technology and leadership to impact not just sustainability but all three pillars of ESG,” said Jedidiah Yueh, CEO of Delphix and founder of SustainableIT.org, a nonprofit organization led by technology executives who are committed to advance sustainability through technology leadership.

“CIOs generally focus on the CIO domain and on technology’s impact on the environment, but we’re encouraging them to think about how to use technology to advance sustainability for their entire company and their entire industry.”

Paving the way through data and insights 

Investors, regulators, customers, and supply chain partners are demanding greater transparency into climate and sustainability reporting and results. So, too, are business leaders. They are looking for data quality and accuracy to measure carbon footprint, supply chain optimization, and green revenue in real time. Nearly a third of 2,000 C-suite executives in 21 countries said the difficulty of measuring their organizations’ environmental impact was a significant barrier.⁴  

Rashmi Kumar, senior vice president and CIO for Hewlett Packard Enterprise, feels CIOs can support the process of improving data quality, accessibility, and traceability. “As CIOs, we play an important role in enabling that [by] positioning our organizations to provide that data, that insight, to our business partners so that they can run their departments more sustainably.” 

Gathering and releasing this information, however, may require collecting data from multiple systems managed by different departments or individuals, which can create challenges in sourcing, collecting, validating, analyzing, and reporting sustainability information. What’s more, in many organizations, sustainability-related information is not subject to the same internal controls as other types of financial information and sources of risk. 

As regulators increase disclosure requirements as part of an overall approach toward “net-zero” emissions—releasing no more carbon into the atmosphere than is removed—by 2050, CIOs should evaluate internal processes to bring sustainability data in line with other risk-and-control systems. 

Developing an integrated platform for sustainability reporting may help organizations improve their data sourcing, collection, and validation and accelerate the process of preparing—and even drafting—reports. Setting up these sustainability data management systems may require CIOs to develop new processes for automating sustainability data collection, aggregation, analysis, reporting, and collaboration with partners. 

Once adopted, these streamlined reporting systems can enhance the information that board members and senior leaders use to monitor, develop, and adapt an organization’s sustainability strategy. As sustainability reporting standards and frameworks become more uniform, companies can rely on technology to enhance transparency and more clearly communicate nonfinancial information to stakeholders.⁵ Further, technology can expedite the data collection required to meet sustainability objectives. 

Leveraging technology to drive decision-making 

Delivering on compliance and regulatory requirements is only half of the data equation. Companies increasingly face demands from consumers for data on the sustainability and other ESG properties of what they buy. For example, the Gemological Institute of America (GIA), which sets global standards for evaluating diamond quality, is adopting blockchain technology to collect data on diamond sourcing—a critical step in giving consumers the information they want about the origins of their diamonds and the social and economic impact their purchase has in source countries.

“We collect a lot of information related to the social [and] environmental impact in Botswana, South Africa, Namibia, or [other] countries,” said Pritesh Patel, GIA’s senior vice president and chief operating officer. “We started a pilot program on a blockchain platform to trace provenance.”  

Blockchain creates a verifiable tracer across the entire value chain—from the mining operation, through diamond exchanges, jewelry makers, and retailers—all the way to the consumer. The more diamonds that have origin data that follows them through the supply chain, the more informed decisions consumers can make.  

Finally, while many organizations have some level of insight into their current environmental impact, a significant area of opportunity for CIOs could be optimizing and creating integrated systems—both internally and externally—to effectively measure, monitor, and uncover areas for reducing waste and the organization’s carbon footprint.  

“That’s really the bigger view of it. If you think about how companies manage their supply chains or their finances or their personnel, all of that is mediated through enterprise applications. Companies are going to need to manage sustainability through technology, just like they do all major processes and functions,” Yueh explained.

Many existing measurements for carbon emissions aren’t precise enough to assess changes for specific technology. CIOs may want to consider using carbon proxies, which make it easier to connect carbon to whatever is being measured. Electricity, for example, is a carbon proxy for the fossil fuel used to generate it. Therefore, reducing electricity demand reduces the carbon it is responsible for emitting. 

Partnering with the business through data and insights to help them to make environmental sustainability decisions is critical. This can vary by industry and organization. In some cases, it may be necessary to train business partners or offer training across the organization to ensure that sustainability goals are being monitored and met. In one example of a CIO driving climate motivated transformation, HPE identified opportunities to procure sustainable materials and components, reducing material waste in their supply chain. Kumar noted that HPE examined more than 3 million assets in its supply chain and was able to remarket or reuse 90% of them.  

Similarly, Western Digital has historically had a substantial carbon footprint from shipping products worldwide. Its supply chains, like those of many global organizations, were disrupted by the pandemic. Now, as the company rebuilds its supply networks, it’s also adding technology to make them more environmentally sustainable. 

“How we manage shipments and our products, the form of transportation we use, all plays into our role of sustainability,” CIO Jahid Khandaker said. “We’ve implemented a risk management tool, [and] a lot of planning and analytics can be layered on top of that. Those predictive analytics are improving supply chain predictability, reducing disruptions, and identifying the best and most fuel-efficient routes.”

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