IT Sustainability Think Tank: Helping IT leaders avoid falling victim to greenwashing

How can IT leaders separate fact from fiction when weighing up a tech supplier’s sustainability claims? And, crucially, what are the dangers or risks enterprises face if they do not do their due diligence on the green claims of their providers?

It can be challenging to develop a sustainable tech strategy when there are various, and in some cases competing, stakeholder interests to manage across an entire business. However, the positive trend is that decision-makers are open to approving and implementing systems that better monitor, measure and manage sustainability.

This can be for a number of reasons. For example, the risk of fines and reputational damage from non-compliance with sustainability regulation, falling revenues if customers’ growing environmental and ethical expectations are not met, and restricted access to capital as funding becomes increasingly driven by environment, social and governance (ESG) factors.

The first step towards building a credible strategy is for IT leaders and CIOs to establish how tech plays into each line of the business, and then how ESG ties into each function, and measure their current performance.

This is central to creating a strategy that reflects the needs of each part of the organisation, which is what will ultimately get board buy-in and make the process of implementing solutions easier.

Empower CIOs to take the reins on sustainability goals

Before any strategy is actioned, it needs to be put through a filter that ensures it is authentic and does not inch into greenwashing, as it can become easy to fall into this trap in an effort to create results quickly.

“CIOs will play a big part in ensuring that systems are energy-efficient and the right ones are in place to track sustainability data and drive improvements. This is why they need to be brought along on the journey from the onset”
Praveen Shankar, EY UK & Ireland

This is where it is vital for IT leaders to be a core part in the development and implementation of the firm’s sustainability strategy, to help ensure that the company’s approach to IT is aligned to its sustainability commitments and ambitions. For example, the CIO can help determine whether the IT systems that will be put in place create operational efficiencies that reduce energy use across the organisation.

While leaders are taking ESG very seriously, we are at an early stage where the perception could be that corporate ESG strategy is an afterthought in the business transformation agenda and vice versa. To combat this, CIOs should be empowered by the C-suite to work with all business departments to better understand how they can effectively use tech tools across the organisation as a way of aligning tech and sustainability goals into one.

CIOs will also play a big part in ensuring that systems are themselves energy-efficient and the right ones are in place to track sustainability data and drive improvements, such as monitoring greenhouse gas emissions or employee diversity. This is why they need to be brought along on the journey from the onset.

Ask the right questions to avoid greenwashing

Client demand for sustainable tech products and services has rapidly increased in recent years. Key terms such as “sustainable”, “green” and “environmentally friendly” are used in product advertising to give the impression that sustainability is an essential characteristic of that product. There are two issues here that increase the potential risk of greenwashing: how can investors and clients be sure that the tech product is “green” and how they can know that the supplier’s own approach to sustainability is authentic?

Initially, to challenge this, there are questions that CIOs and IT teams can use to kick off any conversation with a supplier, such as:

  • What is the role of this piece of tech in the green transition?
  • How can this tech help the company create and deliver on a climate strategy?
  • How does this tech avoid the greenwashing trap – what are its tangible benefits?
  • How will this contribute to moving the dial for our company sustainability performance?

By asking these questions and working to secure concrete evidence on them, leaders can make sure they are doing their due diligence before deploying any tech across the business – and therefore avoid reputational damage further down the line.

CIOs also need to recognise the importance of evaluating the supplier’s own approach to long-term value creation, as well as how they report on their sustainability and ESG performance. Some questions CIOs can ask here are:

  • Does the company use extensive and meaningful metrics to assess their ESG performance?
  • Do they manage ESG and sustainability KPI [key performance indicator] data, processes and controls with the same rigour as that of financial KPIs? For example, does the company’s sustainability reporting receive independent, third-party assurance?
  • Does the company state how the business proposes solutions to economic, environmental and social issues, in a way that creates value for all of their stakeholders?

By asking these questions, businesses can make sure they are having open and honest conversations with their suppliers about their sustainability ambitions and holding them accountable for their performance. Including sustainability criteria in the supplier selection process is now the norm, but businesses need to make sure they are requesting proof and seeing year-on-year positive results, or they risk damaging their reputation down the line.

Implementing new IT solutions will not act as a panacea to solve all ESG problems. IT leaders need to drive long-term value, with a focus on continuous improvement and investment. The right people need to be brought along on the journey, and they need to be asking better questions to make sure they are getting better answers – all to help build a better working world.

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