Why companies should be sustainable and how IT can help
Pressure is mounting for the business sector to address its environmental footprint and become more sustainable. Here's a look at the key drivers and how technology can help.
As businesses grapple with an unstable climate, rising operational costs and supply chain volatility from geopolitics and environmental disasters, sustainability and IT practitioners are examining how they can infuse more resilience into their organizations.
The execution of a solid sustainability and environmental, social and governance (ESG) strategy is no longer a feel-good, nice-to-have initiative; it's central to organizational survival and success. And, because of its dependence on cross-company data collection and tech deployment, IT leaders can be primary contributors to corporate climate action.
Why sustainability is important for business
According to the "2025 C-suite Sustainability Report: The next wave of business value," a global survey of executives from Deloitte's Center for Sustainable Progress, 83% of organizations increased their sustainability investments from 2024 to 2025.
Survey respondents highlighted the following advantages of driving sustainability at the corporate level:
Better compliance.
Decreased costs.
Increased revenue.
Positive effect on brand and reputation.
Reduced risk.
That said, 28% of executives said they feel pressure to tone down their ESG efforts, according to the report. In 2024, 70% of respondents projected that climate change would inform business strategy and operations; this number fell to 60% in 2025.
Over the last couple of years, organizations have pulled back on sustainable practices related to the following areas:
Boosting energy efficiency.
Launching new sustainable offerings, products or services.
Deploying technology designed to drive sustainability.
Increasing the use of greener materials.
Linking executive compensation with sustainable outcomes.
Mandating that partners and suppliers fulfill certain sustainable business criteria.
While sustainability and ESG are board-level priorities, other current events, such as geopolitical tension and the race to adopt AI, often eclipse them, according to Andreas Rasche, professor of business in society and associate dean at Copenhagen Business School in Frederiksberg, Denmark, and co-editor of several books on ESG.
Organizations may view ESG and other current events as competing agendas when they should be viewed holistically, Rasche said.
"For instance, if you decarbonize, you also make yourself independent of fossil fuels," Rasche said. "This is where geopolitics and sustainability [come together]."
There's a slowdown, and there's a pause, but I don't think we're ever going back to the days of no ESG.
Carl MoczydlowskyChief technology officer, Montrose Environmental Group
Additionally, boards often lack sustainability and ESG expertise, he said. So, they depend on advice from external sources.
"It is quite shocking to see how few directors have direct knowledge of sustainability," Rasche said. "A lot more work is needed to build up competencies at the board level."
While sustainability legislation may be loosening under the current administration in the U.S., state regulations are filling those gaps, according to Carl Moczydlowsky, chief technology officer at Montrose Environmental Group, an advisory firm based in Little Rock, Ark.
"There's a slowdown, and there's a pause, but I don't think we're ever going back to the days of no ESG, or it being an afterthought," Moczydlowsky said.
Regardless of the regulation landscape, organizations must recognize that sustainability plays a key role in risk management and resilience, according to Anthea Wagner, twin transformation strategist at Heartprint, a consultancy based in Aying, Germany, that focuses on digitization and sustainability.
"We are facing dramatic geopolitical uncertainties and supply chain vulnerabilities and dependencies -- particularly in technology and AI," Wagner said. "It's about becoming aware of these dependencies and strategically reducing them in order to build a resilient structure long-term."
The role of IT in business sustainability
IT teams play a crucial role in driving sustainability throughout the organization. One of businesses' top priorities is deploying technology to advance ESG efforts, according to the Deloitte survey. Just over 80% of executives reported they are applying AI to help their organizations achieve their sustainability goals.
IT teams have also enabled organizations to measure and test for sustainability and ESG in ways that weren't possible before, Moczydlowsky said.
"When you have really interesting technologies that set those baselines, you need to store, analyze and report on that data," Moczydlowsky said. "IT is core to everything that you do."
Additionally, IT teams can drive digital transformation, operational efficiency and energy reduction.
These three pillars must be considered for any sustainability strategy.
Digital transformation
When IT teams deploy and encourage the adoption of sustainability software, they can help deliver data from the following areas:
Circularity.
Diversity.
Energy consumption.
This helps organizations make informed decisions on how to become more energy efficient, reduce emissions and perform better.
Operational efficiencies and energy reduction
When IT teams adopt a cloud-first strategy, they can simultaneously improve operational efficiency while reducing carbon emissions. Businesses can achieve this goal if they move data storage from multiple, large-scale data centers to a more proactive model in lower carbon facilities -- those operating on renewable energy, for example -- according to KPMG.
Between 2024 and 2027, organizations will invest considerably in data and analytics tools, according to KPMG. Organizations will also work to move data out of siloes in favor of a more centralized model that offers easier access to everyone. While this shift requires IT leaders to collaborate with other business functions, it can lighten their workloads in the long run. It will also transfer a degree of governance from IT leaders to the rest of the business, according to the report.
Chief data officers have a role to play here, as they are equipped to train employees on data interpretation and how it applies to their specific roles. They can serve as ambassadors for data use across their organizations, so business leaders can use data themselves to inform decisions and identify problems, according to KPMG.
"You need to know the company and what kind of language is being taught inside the company," Rasche said. "And you need to adjust the sustainability agenda towards this language."
For example, an organization that is exceptionally aggressive about expansion and profit would require a strong business case that speaks to growth potential and risk. If the business aims to grow market share while fulfilling its moral obligation, the sustainability message must be crafted accordingly.
"If you are in the boardroom, you need to serve both," Rasche said.
What IT leaders can do next
When embarking on a sustainability and ESG journey, organizations should first establish a set of relatively easy actions to begin, Wagner said.
This could include the following:
Conduct a status quo analysis to determine where the organization sits in terms of sustainability and ESG.
Identify risks and opportunities regarding energy efficiency and supply chains.
Assess the role that IT teams currently play in driving sustainability and ESG.
As mentioned, it's also necessary to clean the data used to measure ESG progress. Organizations shouldn't collect from too many disparate data points, Wagner said, to avoid confusion. Instead, IT leaders can collaborate with departments across the enterprise to decide what data is necessary for advancement.
Sustainability is kind of a team sport, [and] everyone is in the same boat.
Anthea WagnerTwin transformation strategist, Heartprint
"Build bridges between different departments and different roles to [reach] a joint understanding of how to collect data, how to work with it and how to build a strategy [based] on it," Wagner said.
Outside their specific organizations, IT leaders can also interact with one another to gain diverse insights and experiences.
"It's really important to share and discuss benchmarks and best practices, and to get access to innovative thoughts and technologies," Wagner said. "Sustainability is kind of a team sport, [and] everyone is in the same boat."
Editor's note:This article was originally published in 2022 and updated to reflect changes in the market.
Carolyn Heinze is a Paris-based freelance writer. She covers several technology and business areas, including HR software and sustainability.
