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CIOs need to balance tech with business sustainability

As CIOs consider new technologies to help reach business sustainability goals, investors also want to see the right governance in place when it comes to climate risk management.

A growing push behind business sustainability means business leaders will be tasked with assessing and outlining plans to reduce a company's carbon footprint -- and they'll need to be careful about what new technologies are adopted to help accomplish those tasks.

Though there are a number of emerging technologies that can help a business measure, keep track of and report on carbon emissions, experts like Forrester Research analyst Abhijit Sunil warn that same technology could also worsen a company's carbon footprint if it's not used properly.

Edge computing, which processes data near the originating source, and internet of things devices, for example, can help provide more accurate measurements of a business's carbon footprint. Yet the technologies contribute to more e-waste and distribute the carbon footprint further out within a business, Sunil said.

"While technology has developed tools that will help us to measure and take action on carbon footprint reduction, there are overarching digital trends that, if not used at the right scale and for the right use cases, might pose risks for the overall carbon footprint of an organization," he said.

As CIOs and business leaders consider technologies like blockchain, artificial intelligence and other tools to measure carbon emissions and meet business sustainability goals, Sunil said it's important to consider the right use cases for those technologies so a company's carbon footprint doesn't expand.

Finding the right use case

Sunil said CIOs will need to carefully identify a use case and what they'd like a certain technology to accomplish as far as reducing the carbon footprint before moving forward with the technology.

This includes understanding the "inherent carbon footprint" of the technology used to meet a sustainability goal, Sunil said. 

If a CIO identifies the right use case and right scale for that technology where it will offset its own carbon footprint, then it can be beneficial to the business's sustainability goals, Sunil said.

While technology has developed tools that will help us to measure and take action on carbon footprint reduction, there are overarching digital trends that, if not used at the right scale and for the right use cases, might pose risks for the overall carbon footprint of an organization.
Abhijit Sunil Analyst, Forrester

Existing environmental monitoring tools that help gather data regarding a business's most carbon-intensive processes, products and services such as cloud carbon footprint calculators can also help advance a business's sustainability goals, Sunil said.

Public cloud offerings from companies like AWS, Microsoft Azure and Google Cloud Platform can leave a significant carbon footprint.

These tools "help IT leaders to make decisions on how much should be on the public cloud versus on premises," Sunil said.

As CIOs and IT leaders assess technology use to meet sustainability goals, business investors also want evidence that a business cares about its sustainability plan. 

Investors want to see climate risk governance, TCFD reporting

During a recent data sustainability summit presented by software company Crux, global financial services firm Citigroup outlined its approach to sustainability, which included creating a governance structure made up of specific groups handling environmental, social and governance data as well as climate risk reporting. Citigroup's board of directors oversees both groups' work.

"Our governance structure continues to evolve to respond to the demand of our climate strategy and our global objective," said Davida Heller, head of sustainability strategy at Citi. "There is a lot of engagement and collaboration as we look through the process of how to understand and then develop and set those targets."

Governance structures provide a clear indication to investors that businesses are taking their sustainability efforts seriously, said Jennifer Grzech, director of responsible investing at global investment manager Nuveen, during the data sustainability summit.

That governance structure needs to demonstrate how a company is tackling and managing the issue of climate risk, Grzech said. Board oversight with the appropriate experts, such as what Citi implements in its governance structure, is an important piece of the puzzle for investors.

Reporting frameworks are also crucial, Grzech said, noting that she recommends companies follow the Task Force on Climate-Related Financial Disclosures (TFCD) climate risk reporting framework. The U.S. Securities and Exchange Commission's recently proposed climate risk disclosure rule aligns with the TCFD framework.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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