IT Sustainability Think Tank: Circular economy concept picks up speed in 2023

The conversation around IT sustainability stepped up a gear in 2023, but has it been another year of all talk and no action?

The climate crisis became an increasingly urgent reality with an ever-growing impact on our lives and planet during 2023.

As a result, the focus on corporate emissions intensified as part of a global drive to decarbonise the economy. And with end-point devices recognised as the biggest carbon culprits in enterprises, it is little wonder that IT sustainability and green tech solutions remained firmly in the spotlight this year.

No longer a nice-to-have, implementing a sustainable tech strategy that marries digitalisation with Environment, Social and Governance (ESG) commitments is now a regulatory requirement and a strategic imperative for businesses linked to improved operational, financial, and environmental resilience.

And yet, Accenture reports that while 100% of executives agree that tech is critical to sustainability, only 7% have included it in their ESG strategies.

With Gartner analysts warning IT-related GHG emissions will increase at about 30% per year, and after years of tech leaders talking about the importance of tackling climate change, are there any signs of progress on making sustainable IT a reality?

Going round in circles

The end of 2023 affords business leaders an opportunity to reflect, recalibrate and reassess, but there has also been an undeniable shift as organisations genuinely commit to and begin the practical implementation of the circular economy as part of their business operating models.

In June this year, thousands of delegates gathered at the World Circular Economy Forum, bringing together bright minds from government, industry, and academia to discuss how to take the circular economy from today’s aspiration to tomorrow’s reality.

Alongside other leaders, I addressed the delegates and shared practical solutions businesses like ours can offer to aid the transition to circular practices. We all agreed that turning circularity into an operational and financial advantage for companies is essential to accelerating the transition from a linear to a circular economy.

Businesses will always be focused on efficiency and profitability, so to generate a systemic shift towards circularity, we need to demonstrate its economic potential - anything else is bound to fail. 

What was radically different this year was the number of voices and the volume of the calls for change. At this event and throughout 2023, I witnessed the circular economy coming to the fore as a key topic, not just for companies in the sector but for powerful global institutions like The World Bank and even The White House.

The dialogue has changed too, especially among IT leaders – conversations are now focussed on practical implementation and how to find solutions that work for businesses wherever they are in their journey towards circularity, acknowledging most are just starting to consider how to bring this new level of resource efficiency and reuse into their operations.

Choosing value

In a year when the economy has dominated the headlines, and many businesses are forced to make difficult decisions about how and where to prioritise investment, tech sustainability could have become a bit of an afterthought.

However, the opposite has happened. Behind the scenes, organisations have been quietly realising that funding ESG-related initiatives and investments was going to positively impact their bottom line: companies that have scaled sustainable IT use cases have achieved, on average, a 12% cost reduction, according to a recent Capgemini Survey.

Sustainability can and should be an exercise in efficiency, after all, and when it comes to technology, given its critical role in business growth, many CIOs have particularly started to look at circularity as a way to maximise their capabilities and returns on investment.  

Regulation has been a powerful driving force behind this change, too, with policy interventions rapidly ramping up in 2023. This year, greenwashing and carbon offsetting finally got the scrutiny they deserved, and ESG reporting requirements intensified as well.

Over the last 12 months, thousands of organisations with a presence in Europe have been upskilling, investing, and preparing for two new EU directives, due to come into effect between 2024 and 2026, that will make resource use and circular economy performance mandatory topics for disclosure.

Companies will also be required to take action to mitigate environmental and human rights harm anywhere in their value chain. This will include, for instance, waste management and recycling partners, making the traceability provided by circular economy throughout an asset’s lifecycle – both during and after use - an increasingly valuable and necessary tool.

This new level of reporting means organisations are more accountable for their impact and better able to measure and track ESG progress and better educated and equipped to bring about change. It’s the beginning of a new era of policymaking that necessitates organisations to take sustainable IT to the next level.

The road ahead

In 2023, businesses were undoubtedly reassessing the landscape in what was the first true post-pandemic year, recalibrating and resetting their direction for the future.

However, I can say that I have never encountered so many customers wanting to engage so constructively and collaboratively on how to become more circular. Crucially, I have never met so many manufacturers and partners interested in how they could work with us to offer efficient circular solutions to their customers.

Change doesn’t happen overnight, and enterprises have undoubtedly been slow to pick up the baton and run with the adoption of the circular economy for technology and other areas of business. However, there are incredibly positive signs for the future, and I believe companies are now on the right track to ensuring the sustainability of their tech is a non-negotiable part tomorrow.

Read more on Datacentre energy efficiency and green IT

Data Center
Data Management