IT Sustainability Think Tank: Keeping on top of the regulatory landscape

Enterprises are under pressure, or even mandated, to incorporate either Corporate Sustainability Reporting Directives (CSRD) or Streamlined Energy and Carbon Reporting (SECR) into their regulatory landscape. In the alphabet soup of this domain, the SECR, TCFD and ESOS will soon be unified in the SDR (Sustainable Disclosure Requirements).

How do IT leaders keep up with, and even embrace, the regulatory and reporting changes, and help technology lead the way in creating a compliant, low carbon future? Regulators and governments have become more and more focused on every part of organisations’ sustainability practices and reporting.

From communications through to food, regulators across a wide range of sectors are looking to take a proactive approach to drive faster progress towards net zero by sharing best practice reporting guidelines and facilitating collaboration between companies to tackle the sector specific challenges they face. There are some crucial steps for IT leaders to take to prepare their teams and IT estates to meet these demands.

In partnership with GoCodeGreen, PA Consulting has been shaping offerings to support companies to prepare and improve their measurement and actions on carbon reduction and create the change in culture required to meet these challenges head-on.

A recent study by GoCodeGreen saw a global financial services organisation undertake a detailed assessment of a sample of their digital products. When modelled over their complex IT estate, they identified opportunities to reduce their currently stated organisation-wide Scope 1, 2 and 3 emissions by up to 12%. That is a clear illustration of the huge opportunity here for IT to make a difference.

Measurement is key to quantifying the environmental impact of your IT landscape and to be successful, measurement needs to align with, and adapt to, regulatory demands. Quantifying organisational emissions with accurate measurement is one piece of the puzzle.

Mapping those metrics to a company’s climate-change mitigation report is the other. Once an organisation has clarity both about their existing status and what they want or need to comply with, it becomes significantly easier to set clear goals and the long-term strategies required to meet them.

Getting to this point is easier said than done but there are actions that can help organisations achieve their CSRD obligations and more generally, their sustainability ambitions.

To ensure a good level of success, leadership teams need to steer their company’s culture towards understanding the benefits of sustainability.  This needs to be an ongoing conscious effort, with the intention of instilling a routine across the company. As the old adage says, a good habit is something you get for free. If sustainability is at the forefront of your organisational mindset, then it just becomes how you deliver – not just another tick-box exercise to comply with regulation.

Embedding a culture of continuous improvement should be encouraged. Combined with adopting lean agile practises, organisational services can be iteratively refined to mitigate the stated impact of your organisation, and necessarily, kept within budget. Continuous improvement depends on communication, realistic goals, and shared responsibility – all of which chimes perfectly with a corporate culture of sustainability. As is frequently the case, these behaviours are good for firms’ intrinsic business too.

No one can afford to be complacent. Digital organisations that are already heavily cloud-based must increasingly adopt FinOps practises, which means managing their IT landscape by combining cost management with resource optimisation, to achieve their sustainability goals. Using resources more efficiently drives down cost as well as lowering emissions.

This should not be a situation where organisations think about it as ‘tomorrow’s problem’ which can be deferred to a future investment round. A regulated and stringent reporting environment and demands for technology to play its part are now a reality. IT leaders must embrace this challenge and face the opportunity to contribute to the broader organisational commitments to net-zero, as well as balance customers’ demands for their digital interactions to be transparent and environmentally aware.