This is the third blog in a series that will cover the most pressing challenges, opportunities, best practices, and first steps for organizations on their path towards green IT. Be sure to check out Four Roadblocks to Green IT and First Three Steps to Green IT.
External Stakeholders: Where is the Pressure Coming From?
Organizations are feeling pressure from multiple angles to set ambitious sustainability goals and increase their transparency around how green their operations truly are. As organizations define what success looks like and reports on progress, there are various stakeholder groups to consider.
- Investors: Morgan Stanley found that between 2004 and 2018, median returns from sustainable funds were in line with their traditional counterparts and provided more risk protection – dispelling the myth that investors who consider sustainability see a financial tradeoff. In 2020 during coronavirus, sustainability funds outperformed traditional funds and reduced risk of investment. This initial data shows a promising trend towards sustainable investing strategies as more investors begin to treat ESG as a competitive advantage.
- Customers: Eco-friendliness is becoming an important factor in purchasing decisions. People want to support brands with strong commitments and proven action to climate justice – especially Gen Z and Millennials. In an IDC survey that asked whether organizations had seen a difference in buying behaviors for sustainable products and services between Millennials and Gen Z, 40.3% of respondents noted that both generations show a higher demand compared to other generations. As these generations’ buying power increases, organizations cannot ignore changing purchasing criteria.
- Employees: With staff shortages and new challenges around hiring, employees are reconsidering what kinds of organizations they want to work for. According to an IBM survey, 71% of employees and employment seekers say that environmentally sustainable companies are more attractive employers. More than two-thirds of respondents noted they are more likely to apply for and accept jobs with environmentally and socially responsible organizations.
- Regulators: One of the top roadblocks organizations face in delivering on their sustainability goals is the lack of standardization in collecting data and measuring progress. While various reporting frameworks still exist, regulators are looking to set new standards. Within the United States, the Environmental Protection Agency continues to execute new regulatory actions to address the largest sources of climate pollution, and a proposed Securities and Exchange Commission rule would require public companies to report the climate-related impact of their business.
Internal Stakeholders: Who Owns Sustainability?
The external stakeholders described above all have varying viewpoints to consider as organizations develop their sustainability strategy. Internal stakeholders are another important group to map out, as many different parts of an organization will have a role to play in achieving their sustainability goals.
An IDC survey revealed that the Chief Executive Officer, Chief Sustainability Officer, and Chief Financial Officer are the top three internal stakeholders responsible for sustainability/ESG strategy, implementation, and related purchasing decisions. In the same survey, Chief Information Officer and Chief Technology/Data Officer ranked 6th and 7th, respectively.
Interestingly enough, another IDC survey also found that the lack of ESG data and uncertainty about the quality of data are the top concerns for organizations in reaching their sustainability goals. IDC notes that these challenges around data support the demand for IT solutions that can help collect, standardize, and report on the data and metrics relevant to sustainability goals. This suggests that there is great opportunity for CIO and CTOs to partner with their CEOs to accelerate sustainability goals and use technology to solve these pain points.
Learn more about how Turbonomic can accelerate IT's journey to carbon neutrality here.
IDC Sources – A subscription is required to view these reports:
- Worldwide ESG Business Services End-User Survey — The Impact of Millennials and Generation Z, 2021. Feb 2022 – IDC Survey – Doc # US48858422
- Who Are the Key Decision Makers Regarding Sustainability/ESG Strategies and Related Purchasing Decisions? Oct 2021 - IDC Survey Spotlight - Doc # US48320221
- What Are the Biggest Operational Challenges for Organizations to Meet Their Sustainability Goals and How Can Technology Help Solve Them? Feb 2022 - IDC Survey Spotlight - Doc # US48859822