As environmental, social and governance (ESG) strategies climb the list of priorities in organizations around the world, chief information officers see themselves playing a more key role in ESG efforts.
ESG efforts today are often ad hoc, siloed, and manual, with data and operations scattered across different systems in an organization.
Digital transformation presents a strong opportunity for companies to make ESG’s efforts impact and value business, and the CIO has a front-row seat on how digital transformation intersects every aspect of the business. .
With enterprise data at the heart of the company’s ESG strategy, CIOs-along with their competitive perspective on the interdependencies and interactions between people, processes, and technology in every business function-are critical to advancing ESG goals.
Chris Bedi, chief digital information officer at ServiceNow, said it’s up to the CIO to inform the rest of the organization of the environmental impact in terms of energy use in data centers and business processes or advise on optimizing purchasing hardware and software.
Keeping ESG First in Mind
The CIO is also responsible for managing technology lifecycles and communicating management policies that promote data trust and transparency. “It is up to the CIO to make innovation decisions and direct technology purchase with ESG in mind,” he said.
From Bedi’s perspective, an effective ESG program needs to integrate the company’s business strategy, culture, and values into global operations.
When ESG’s efforts to quietly put an end to day-to-day business decisions are irrelevant, it shows real business risks-suppliers selected by procurement will affect carbon footprint, risk profile, and privacy of a company’s data.
Workplace services provided by facilities affect employee health, equity, and expected talent, while the accuracy of data maintained by multiple groups affects reporting transparency.
“There are hundreds of ESG point-products on the market that support careful, disconnected ESG efforts, which exacerbates the problem,” he said. “And companies rely on different operating systems that support individual, siled processes.”
Ben Kruse, director of global ESG reporting and insights at AT&T, explained that CIOs can help advance ESG efforts in two ways: First, they can lend the resources and expertise of their teams to enhance the efficiencies and controls that support ESG data collection and reporting.
Second, they can take steps within their IT organizations to contribute to ESG goals such as emissions reduction targets-such as through network optimization and virtualization efforts. which helps reduce energy consumption.
‘Net-Zero Emissions’
“More and more companies, including AT&T, are committed to net-zero emissions,” Kruse explains. “We are moving towards a goal of reaching net zero Scope 1 and 2 emissions by 2035. And we have set a goal to develop connectivity solutions that will help our business customers collectively reduce a gigaton of greenhouse gas emissions by 2035. “
As part of AT & T’s gigaton goal, Equinix, a digital infrastructure company, is partnering with AT&T to provide highly secure access to energy -efficient digital infrastructure, helping corporate customers accelerate their digital innovation and lower emissions.
“Together, we provide a solution that allows customers to move their data from the on-site IT infrastructure to a better cloud-based infrastructure,” Kruse said. “It’s not about helping customers shift emissions from Range 2 to Range 3. Cloud-based solutions that run on scale can offer more energy efficiency than an individual corporate network – which reduces overall emissions for all players. “
Kruse explained that like many companies, AT&T is implementing efforts to integrate data from dozens of legacy databases and systems into centralized platforms that will simplify the analysis and aggregation of datasets such as our greenhouse gas inventory. “We are reviewing specialized data management platforms to centralize the collection and storage of our ESG data and narrative, as well as related process controls and content approval, to simplify the process. auditing and assurance, “he said.
Kruse said some of ESG’s most successful programs demonstrate how managing ESG issues – including the use of ESG data – is integrated throughout the business and in decision making. “Companies are looking for ways to simplify their ESG reporting process-such as integrating legacy systems to make data aggregation easier, faster and more prone to human error. ,” he says. “Such enhancements can also alleviate the strain placed on operational sustainability teams, as aggregating GHG inventories and other ESG data was previously manual and time-consuming.”
It brings it all together
Key challenges include making diverse, legacy systems-many of which were likely never designed for ESG reporting-work together to provide reliable and audible datasets.
Kruse pointed out that CIOs and their IT teams are central to this work, as well as working with business units throughout the company, to help fund such investments.
“Such system integrations can pull data visibility into virtually real-time dashboards, pivoting the compilation of ESG data from an annual reporting exercise to a tool that supports ongoing management. of the performance of departments throughout the business, ”he said.
Gartner vice president of research Simon Mingay points out that one thing that is generally true in any business is that ESG is an incredibly data intensive project.
“Data is widespread, diverse, large in volume, and scattered throughout the organization and requires intensive analytics,” he said. “Anything and everything anyone has learned about data quality, data management, data architecture – everything – applies to everything in ESG.”
Mingay said that although it should be the home of the CIO, the real value in data collection is having operational insight and driving performance improvement. “The piece of core assignment that CIOs have to do, if they’re not 100% familiar with the business sustainability goals, targets, timelines, strategy, is to meet those,” he said. “Because you don’t have that insight and context, you’re just chasing so many things in so many different directions.”
The result is an inability to provide the necessary focus and priorities that can be implemented, because there are so many directions in which one can go.
Data Centralization
Bedi said the problem facing CIOs is not the lack of ESG data – but the fact that data is scattered across countless applications, in different formats, managed by different teams.
“So, to me, the most critical best practice is an obvious one,” he explains. “CIOs must ensure that ESG data is captured and analyzed within a centralized solution-a point of integration to set goals, collect data, audit activities, and track and disclose the performance. “
Bedi said by aligning investments, empowering decision-making, and streamlining ESG-related product and services, organizations can better serve all their stakeholders and create meaningful, sustainable change. while enhancing reputation and trust. “Every digital transformation project is an inflection point that can contribute to the company’s ESG performance,” he said. “Organizations need an integrated, company-wide planning and operational model to help them make their ESG goal into action.”
According to Mingay, it is important that CIOs can prioritize and zero in on the things that can make a difference in the business, in its operations, in its stakeholders, and in its customers. “Without that, they would face a large number of requests coming from many different directions, most of which would not be meaningful,” he said. “CIOs need to understand what’s important to their sector and specifically what’s important to their business.”
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