What Role Can IT Play in Sustainability?

Data transparency and idea generation are important elements if sustainability is to be firmly anchored in companies. This is an important finding of a recent IDC study. However, there are already creative approaches to implementing sustainability in earnest.

38 percent of German companies already have a sustainability concept, and another 40 percent have launched at least individual programs. This is driven primarily by customer demand for environmentally friendly products and the goal of improving operational and production efficiency. In plain language, one could probably say that the increased energy costs are making many people think about resource-saving production, and the new political framework conditions are changing the priorities of investors and customers, thus also providing a boost to sustainability initiatives. Regardless of where the motivation to address sustainability lies, nearly all organizations surveyed by IDC said they want to achieve their sustainability goals by 2030. These include aligning with circular economy principles (44%) and working with suppliers and partners who share their sustainability goals (41%).

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What are the difficulties?

Many cite sluggish digitization as a stumbling block. That is because a lack of transparency of processes and data (25%) slows down sustainability initiatives.

Many also find it difficult to involve employees at the operational level (23%). In addition, there is often a lack of awareness of how technology can help increase sustainability (21%). “The fact that one in five companies in Germany apparently has no clear idea of how IT can be used in concrete terms when it comes to sustainability is surprising on the one hand,” says Elena Georg, project manager at IDC. “But it also fits the picture when we look at where German companies stand in terms of digitization.”

How great is the will for more sustainability?

So there is still plenty of room for improvement and development, according to four other findings of the study:

The focus of IT initiatives is shifting toward supply chains and future technologies such as IoT, Big Data & Analytics, RPA and Green Coding.
Current data collection and KPI focus on internal processes: For ambitious sustainability initiatives, many plan to expand to the entire value system
While energy management or employee training for greater environmental awareness are implemented today, sourcing fair IT products, building smart buildings and life cycle assessment of products and services are among the initiatives in the future.
Optimizing the efficiency of supply chains, manufacturing processes, machines or the vehicle fleet is something that every second respondent wants to tackle in the future – all of which are measures made possible by IT in the first place.
At around 28 percent of the companies surveyed by IDC, the sustainability aspect is already an integral part of the IT strategy, and the trend is rising. In addition, almost one-third of companies plan to invest more than 30 percent of their IT budget in sustainable products and services over the next 24 months, and half of the companies plan to spend between 10 and 29 percent of their budget on sustainability.

What potential can be leveraged?

The useful life of IT hardware, for example, already shows where to start. Unsurprisingly, companies still define the end of the useful life primarily in terms of depreciation and the term of the contract, and not in terms of performance or wear and tear. When hardware reaches the end of its useful life, it is primarily recycled (29%), resold (27%), or returned to the equipment manufacturer (24%).

The cloud in particular, as well as mobile applications, are used for sustainable projects by around 35% of the companies surveyed. The greatest benefits of the cloud are seen primarily in the reduction of energy costs (40%) and the improvement of the CO2 footprint (39%). More than 60% of companies believe that large cloud data center providers are able to operate their data centers more sustainably than their own company could. They see strengths primarily in the use of the most energy-efficient technology, renewable energy sources, and higher server utilization.

Excitingly, in the coming years, companies anticipate a high demand for new software to accompany and support sustainability initiatives – especially in carbon accounting/carbon tracking (45%). Sustainability-related metrics (KPIs) are the key means to evaluate, manage and communicate measures efficiently. While KPIs such as energy consumption or production efficiency are standard today, water footprint (45%) or supply chain miles (43%), for example, will be used in the future.

Ecosystem instead of going it alone

“Implementing sustainability measures requires new solution paths and innovations that companies often cannot achieve on their own,” said Marco Becker, project manager at IDC. “That’s why external partners, sustainable ecosystems, and, in the future, a focus on their supply chains, in particular, are important to almost two-thirds of respondents. We expect to see increasing investment in sustainable ecosystems in the future, and companies increasingly turning to IT vendors that have the networks in place.” In today’s networked value creation systems, many sustainability initiatives can only become truly successful if companies take action beyond their own corporate boundaries. Comprehensive and efficient data exchange with partners in supply chains and business ecosystems is an important prerequisite for this.

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(Featured image by jarmoluk via Pixabay)

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First published in IT-BUSINESS, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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