Global climate change is fast outpacing the scale and magnitude of human response. As its implications to socio-economic and political stability become apparent, organizations worldwide are re-posturing to drive affirmative climate action. However, climate change considerations for business are no longer the sole responsibility of the Corporate Social Responsibility (CSR) office or sustainability department.
Sustainability is increasingly integrated throughout the business, incorporated into management strategies up through the C-Suite, with governance to include board-level oversight. External stakeholders, such as investors, governments and B2B and B2C customers, are increasing pressure to ensure that companies are not only reducing organizational footprint, but also ensuring resiliency for the future impacts of climate change.
In its 2020 Status Report, the Task-Force on Climate-related Financial Disclosures (TCFD) recorded an 85% hike in the number of organizations expressing support for the TCFD. But what is compelling for most senior leadership is that the TCFD reports investors are demanding to know how companies are addressing the risks of climate change. Investors now stand as a significant source of pressure for a more sustainable business model. Undeniably, companies can no longer afford to reserve their climate change agenda and environmental management exclusively for the CSR and sustainability administrators.
Considering the overarching role that technology plays in effective decarbonization, the CIO’s office is evolving to spearhead initiatives toward modern business climates, including innovating carbon offsetting strategies. In this blog, William Theisen, Head of Net Zero at Atos North America, discusses three principal aspects of digital decarbonization. They can help organizations run highly secured and intuitive digital ecosystems for propagating their net zero ambitions.
Building a digital decarbonization strategy
Climate change definitively impacts both individuals and enterprises, albeit disproportionately. The threats of erratic weather patterns to present and future business prospects are inarguable. A business-wide decarbonization game plan can equip businesses to explore unprecedented opportunities around optimized energy usage, reputational advantages, and lead to assured investor confidence and sustainable operations.
The idea is being quickly adopted across industries as the companies’ CSR and sustainability wings cease to operate in silos while driving eco-initiatives. Theisen says: “Exercises like carbon footprint assessment or setting science-based targets to reduce emissions from direct operations and through the value chain, cut across departments to ensure their contributions and resilience build up across the enterprise landscape, allowing the institution as a whole to adapt to the changing climatic context.”
However, aligning strategies and outcomes can be at times complex for businesses, requiring expert interventions.
It’s also crucial to deep dive into enterprise operations, supply chain linkages and vendor relations, discovering opportunities that can allow companies to score quick wins. While information plays a significant role in this, the challenge is establishing an oversight mechanism that can consistently ingest data and deliver real-time insights.
Here, Theisen believes that the combined capabilities of Atos and EcoAct can help companies through Decarbonization Level Agreements (DLAs), an accountability framework to ascertain that the companies’ decarbonization initiatives are on track. Success hinges on the seamless ability to retrieve data from diverse system landscapes and shape them into deep, reliable emission insights that can guide broad-based infrastructure and policy transformations.
Developing cross-departmental teams of data stakeholders
A decarbonization strategy is only as effective as the team that navigates it. CIOs need to include the data and process owners from functional units like facility management, procurement, packaging and marketing in the digital decarbonization strategy team to deliver organizational impact.
“These are the stakeholders that we are looking to interact with while implementing decarbonization solutions for our clients,” Theisen says. “They can be from the middle or upper management of the organization or may represent their partners across the supply chain, with access to all the data and possessing intense knowledge of the operational realities.”
Such interactions provide valuable insights to digital partners. For example, it gives them guidance on layering enterprise resource management and product lifecycle management systems. It also helps transform live business data into carbon emissions to gain insight into decarbonization considerations and opportunities within the digital constructs.
Driving economy-wide impact and accountability
Also, companies need to drive digital decarbonization initiatives beyond organizational boundaries to motivate their supply chain and ecosystem partners. While sectoral differences exist, technology companies are spearheading the Net Zero Pledge across North America. However, companies operating in the manufacturing, consumer goods and food and beverages industries — owing to their strong physical presence and elaborate supply chains across geographies — are increasingly coming under acute investor, regulatory and customer focus to decarbonize and ensure resilience in the face of climate-induced disruptions. Theisen believes that amid a hyperconnected economy, a circle of accountability arises, where each stakeholder pressurizes others through business transactions, evolving expectations or progressive policy actions to decarbonize and deliver net positive outcomes.
CIO as the strategic enabler to a sustainable future
The current state of the global climate coupled with evolving stakeholder demands has left no room for complacency on decarbonization. The organizations that are setting ambitious targets and resolutely investing in them will enjoy improved business resilience and assured market competence.
While businesses may be at different readiness stages, Theisen considers it crucial to start the decarbonization journey immediately and on the right footing, with the CIO at the helm. In this digital era where digital strategies underscore every major aspect of the organization, CIOs will have to play a defining role to integrate, scale and mainstream decarbonization initiatives across the enterprise spectrum, bolstering the business resilience and sustainability of the private sector.
To learn more about making the business case for net zero, connect with expert team members at Atos Decarbonization.