In 2023, many chief information officers (CIOs) and founders will be focused on environmental, social, and governance (ESG) initiatives as organizations aim to improve IT and operational efficiency and comply with regulations.
In a recent CNBC report, John Mennel, managing director at Deloitte, noted that CIOs are becoming increasingly important in achieving environmental sustainability goals and are being called upon to ensure that technology related to sustainability is aggressively deployed and to minimize the environmental impact of existing and new infrastructure and technology.
Dan Versace, research analyst at International Data Corp, noted that the pressure from consumers, investors, and regulators will continue to drive ESG and corporate sustainability issues to the forefront of executive minds.
Abhijit Sunil, senior analyst at Forrester Research, tells CNBC that rising environmental regulations, cost savings, and other financial benefits from operational efficiencies tied to sustainability are also driving ESG forward. Forrester’s research showed that the top contributors to IT’s carbon footprint are data centers, cloud services, and end-user devices and peripherals.
In 2022, Patagonia founder Yvon Chouinard, his spouse and two adult children announced they are giving away their ownership in the apparel maker he started some 50 years ago. The company’s non-voting stock, worth close to $3 billion, will be owned by a collective that will use all profits that aren’t reinvested into the business to fight climate change. In addition to pledges, companies are focused on finding news was to reduce their environmental footprint across their overall operations.
In 2023, ESG priorities for technology executives will include implementing software platforms for measuring and monitoring environmental footprint, digitizing operations and optimizing user devices, optimizing data center operations, migrating to and taking advantage of sustainability benefits of the public cloud, and working with suppliers to reduce the carbon footprint in the supply chain.
Reporting on ESG progress will also be a focus as financial regulators in the US, UK, European Union, and Canada are expected to require public companies to report on their carbon emissions. However, a report by Info-Tech Research Group found that less than 25% of surveyed IT professionals said their organization can accurately report on the impact of its ESG initiatives and almost half said their organization cannot accurately report its carbon footprint.
IT leaders will therefore need to improve in this area. IDC has predicted that ESG reporting will become a significant area of investment in 2023.