Gartner: How can CIOs use technology to create and accelerate sustainability strategies?

Manufacturing organizations are under pressure to reduce greenhouse gas emissions in response to climate change concerns and stakeholder pressure while also managing other material sustainability issues. Bettina Tratz-Ryan, VP Analyst at Gartner highlights how CIOs can use data to support corporate sustainability strategies.


This is a contributed article by Bettina Tratz-Ryan, VP Analyst at Gartner.

The COVID-19 pandemic has brought sustainability to the forefront of business agenda. It has reset corporate discussions and more specifically, long-term sustainability strategies have become a priority for businesses across all sectors. According to a recent Gartner sustainability survey, 61% of respondents indicated that strategy is one of the top activities affected by sustainability.

Yet, putting this renewed commitment for sustainability and climate change into practice has proven to be a challenge. Companies fear rising costs and an increasing number of complex processes if they transform their operational systems with little technology standards and sustainability frameworks.

However, in the same Gartner survey, manufacturing CIOs recognised that one of the top sustainability priorities for their companies is to drive product innovation, or product feature differentiation. While the conventional wisdom leads to many discussions around compliance and risk, there are several CIO leaders, who are turning the visibility of their carbon footprint into an opportunity for sustainable digital transformation.

CIOs should utilise the wealth of information they generate through sustainable digital solutions to create a data platform for resource efficiencies, carbon emission reporting as well as circular economy. This will support both the business to drive growth, while lowering the organisation’s carbon footprint.

Identifying organisations’ material impacts based on the UN’s sustainable development goals

Adidas, for example, recently announced their sustainable growth strategy, which looked at leveraging technology to develop new ways of employing supply chains, using work tools, and reducing energy and infrastructure footprint.

By leveraging their data insights, Adidas was able to identify the material environmental issues they faced based on the United Nation's Sustainable Development Goals (SDGs), and how each of these issues directly impacted their operations.

Unilever has integrated the SDGs into their corporate strategy, expecting this to benefit society, industry and the company holistically. Using AI and technology, the company is tracking, for instance, supplier responsibility for palm oil production by understanding deforestation, human labour conditions and environmental damage.

CIOs who are looking to embed sustainability in their strategies will need to follow Adidas and Unilever’s footsteps and map out the environmental issues facing their organisations – including climate change mitigation and adaption, biodiversity, pollution, and resource efficiency – which can be done by embracing their organisations' data strategies.

CIOs must embrace data and analytics to address organisation’s material environmental issues

CIOs can support climate change’s mitigation and adaption strategies through a holistic data orchestration approach that correlates business focused outcomes with science-based targets. Applying data models across the manufacturing operations into the value chain with partners and customers allows for an assessment of the intensity of use of resources based on locations, environmental circumstances, and social impact on society. Data will identify social conflict and potential competition of access to resources or the impact on land use and labour conditions in emerging economies. CIOs can dashboard those insights to support data driven IT decisions with climate adaptation or mitigation in mind.

While it's not always a straightforward process, CIOs can still use data to deepen their organisations' impact on biodiversity, especially in suburban areas where most of their industrial sites are based. As shown by Unilever, by leveraging spatial data and using AI as well as data analytics, CIOs and their IT teams can pick-up on-air quality, soil erosion and pollution levels impacting biodiversity. They can use waste-streams data to reduce wasted resources while monitoring fill states at landfills. In turn, this data can help inform their business plans to minimise scrap, optimise their supply chain while improving their carbon footprint.

To reduce a company’s track-record on pollution, focus should be on improving supply-chain transparency as well as the circularity of the products. By examining how products are being manufactured and disposed of, manufacturing CIOs can identify ways to optimise their products’ lifecycle – from production to end-of-life. Customers can then use the data to establish their own scope 1 and scope 3 carbon footprint assessment, and their carbon efforts can be supported by digital technology. For example, employing digital twins that look at product life cycle management, will show the engrained carbon footprint, as well as the embedded resources and could transparently provide a holistic data visualisation for the entire value chain, including customers.

CIOs who need to track costs through resource efficiency as well as carbon intensity will need to understand how much energy is needed to power essential IT tools and devices. By working with IT teams, CIOs can use data to identify the productivity of infrastructure assets through existing enterprise asset management and workload management and drive update and maintenance schedules. In data centres, energy efficiency software can support power usage effectiveness which will drive decision on energy-efficient and resource friendly cooling and compute technologies.

Inevitably, by becoming more resource efficient, CIOs and CFOs can also lower costs on unnecessary implementation of infrastructure, and funnel money into more sustainable digitalisation. For example, cloud services and more energy-efficient machines can fuel product innovation and generate efficiency across the business.

A long-term market opportunity

Reducing emissions, boosting efficiency, and fuelling product innovation are not the only perks that come with embracing data. Organisations should also consider the market opportunity – being data-driven helps companies become more agile, savvy, and resilient to crises. As such, they are more willing to identify market gaps and embrace product innovation to meet their customer requirements.

CIOs who are leveraging their data insights are not only advancing their contribution to the organisation’s SDGs, but more importantly, they are improving their operational efficiency and product innovation. A win-win situation for CIOs to become partners of the future sustainable growth strategies of the executive board.

Bettina Tratz-Ryan is a Vice President Research and responsible for intelligent urban ecosystem research that includes smart city and industry stakeholders, as well as the digitisation efforts in the manufacturing ecosystems. As part of her smart city research, Tratz-Ryan analyses the strategic citizen impact and business value of data and information analytics, Internet of Things, open data marketplaces, applications and complex architectures for cities, the development of digital society and their industrial environment. Her expertise integrates technology models with services and business measures for subsystems such as transportation, mobility, microgrid and buildings. She also works on the business impact related to the Industries 4.0 framework