How organizations can use the principles of IT cost tracking to reduce their carbon footprint.
Seven years on from the Paris Agreement, this year’s United Nations Climate Change Conference (COP28) will force governments across the globe to take stock of their progress on the climate change agenda. In doing so, a bright light will be shone on any gaps in current efforts and highlight the importance of a clear plan to ensure the 2050 net-zero deadline is met. And, if the current deadline wasn’t daunting enough, calls for climate neutrality goals to be met as early as possible (even as early as 2040) continue to add mounting pressure and a sense of urgency that is rapidly trickling down to businesses of all sizes and across all industries. Regulators, investors, and customers are all demanding to see action. It is no longer enough to just ‘talk the talk’ – organizations must be able to prove that they have sustainable practices in place and be able to demonstrate the direct impact they are having in the race for net-zero.
While awareness around the climate crisis is evident, economic disruption and the cost-of-living crisis have meant that, all too often, the sustainability agenda has taken a back seat while other pressing issues take centre stage. In fact, according to a recent survey of chief executives by KPMG, half of CEOs are contemplating pausing or reconsidering their ESG efforts because of economic pressures, with more than a third (34%) already having done so.
Nevertheless, as we continue to rely heavily on IT and digital platforms for day-to-day business operations, the associated carbon footprint is growing increasingly significant. For example, the technology and telecoms sector alone generates an estimated 5% of global CO2 emissions, twice as much as the whole of the aviation sector, and this figure is set to surge to 14% by 2040, according to Forbes. CIOs are therefore being forced to juggle the pressure of reducing the organizations environmental footprint using Green IT, with the growing need to ensure any technology investments remain cost-effective – all whilst meeting the current and future needs of the business.
Luckily, optimizing spend and driving sustainability CAN work hand in hand. By utilizing the principles of IT cost tracking and taking a holistic approach, organizations can monitor their carbon footprint and build greater efficiency to drive down carbon usage, in the same they would do business cost.
Investing in Green IT – it’s not always exactly as it seems…
Whilst investment in Green IT has skyrocketed in recent years, it is important to explore whether it really is always greener on the other side. The adoption of sustainable IT practices is important, but there can be some unexpected carbon emissions to consider. The adoption of cloud computing, for example, which has been driven in part by its promise of improved sustainability – still contributes to between 2.5% and 3.5% of all global greenhouse gas emissions. That’s more than commercial flights which sits at approximately 2.4%. That said, Green IT is still the way to go. Not only is it overall a more sustainable option for the environment, but it also offers additional benefits including cost savings as energy bills are reduced, increased regulatory compliance, and a competitive advantage with the environmentally conscious customer.
A careful balancing act between sustainability, cost, and performance
In order to meet all three of these needs a holistic approach to Green IT is needed – and this begins with transparency. Business leaders need an in-depth understanding of the environmental impact of each and every one of their services or products in order to ensure it not only meets energy efficiency standards but also maintains reliability and performance. By tracking usage data over time and across multiple departments and locations, CIOs can map out metrics that measure both short-term savings and long-term gains along the value chain.
But how exactly can businesses go about gaining this transparency? Fortunately, many external vendors already provide information about the environmental impact of their products and services. There are a huge amount of data sources ready and waiting to be used. Public cloud companies, for example, provide detailed data about the carbon emissions associated with their services. Internal organizational data such as asset management and time tracking are also extremely useful and can help to ascertain how dependent the business is on each IT service. Utilizing such data businesses can begin with an 80/20 approach to assign CO2 emission accurately within the service value chain. Whilst basing this on real-time data is the ideal to work to, assumptions and allocation keys can be used to bridge these gaps and provide a good start.
Staying on track
Whilst building transparency and making use of data is key, it is also crucial that goals are set and that your organization is equipped with the tools to monitor progress alongside this. Ensuring complete visibility of the end goal and not losing sight of it is the only path to success. This also means staying ahead of any challenges that may arise and inhibit your goal. For this, an easy-to-use planning and actual variance analysis is needed at least once a year, if not monthly to provide all stakeholders with an accurate and realistic understanding of progress and if/when intervention needs to take place.
By implementing an effective Digital Value Model (DVM), which creates a clear path for data mapping and effective reporting, business leaders can easily ascertain information on how much carbon a particular business service or unit is using, track against a target and identify where action needs to be taken.
Only with a holistic, clear and transparent approach, can business leaders ensure that sustainability goals are met whilst positively impacting performance and IT spend. With the correct tools and technologies in place to monitor carbon usage, and track against the businesses goal, one needn’t be sacrificed for the other.