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Just as digital transformation required every company to become a technology company, now every business needs to act fast to become sustainable. And, once again, technology has a starring role to play in this evolution.
It’s a reality that’s confirmed by Accenture’s latest sustainable technology survey, which draws from input provided by 560 companies with revenues above US$1 billion across the globe. Every single respondent ranked technology as critical for achieving their sustainability goals.
Digging deeper, we see why technology is moving front and center on the sustainability agenda. Companies that adopt sustainable tech to a significant extent achieve 4% higher environmental, social, and governance (ESG) scores from Arabesque S-Ray (a global specialist in measuring ESG metrics). And this can lift their overall ESG ranking by 11%.
Tech-powered sustainability isn’t just good — it’s good business, too. Accenture’s analysis shows that companies with consistently high ESG performance generate 2.6x more value for shareholders than medium ESG performers.
There’s clearly a lot to be gained from a holistic sustainable technology strategy. But while most businesses are aware of the benefits, they’re still a long way off from achieving them. In fact, only 7% of companies have fully integrated their technology and sustainability strategies.
What’s Holding Organizations Back?
Some companies are still struggling to figure out the ESG impact of their existing technologies, and how to improve it. Overall, there are a few common challenges that companies face in moving their sustainable technology strategies from ambition to reality:
- Lack of solutions and standards: 40% of executives surveyed believe that the right solutions are not available or not mature enough, including availability of the right talent to lead these initiatives
- Complexity: Nearly 33% are struggling with complexity of solutions or with making their legacy systems sustainable
- Lack of awareness: Around 20% are not aware of the unintended consequences of technology or whether the technology they use is sustainable
Another big barrier: CIOs don’t always have a seat at the table on sustainability decisions. Although technology is becoming core to executives’ sustainability agendas, the role of most CIOs has not evolved in line with this shift. Only 49% are on the leadership team setting sustainability goals, and just 45% are assessed on achieving these goals.
Three Keys to a Sustainable Tech Strategy
To truly realize value, organizations need to close the gap between their sustainability and technology strategies — and CIOs have a crucial role to play in driving this shift. They can help fuel both business growth and ESG performance with an integrated sustainable technology strategy that’s built around three key elements:
- Sustainability by tech: using technology innovation to enable sustainability initiatives
- Sustainability in tech: measuring the ESG impacts of technology, and working to ensure it’s designed, developed, and deployed sustainably
- Sustainability at scale: engaging the entire ecosystem of businesses, non-profits, and government organizations to make an impact beyond the company and across the world
Ranking Our Respondents
As part of its report, Accenture developed a sustainable technology index, which ranks performance against these three elements on a scale of 0-1. Interestingly, it revealed a “crowded middle” around the median score of 0.45. Roughly 60% of companies posted scores within the range of 0.3 to 0.5. This indicates that most organizations still have a long way to go in achieving all three elements of a sustainable technology strategy.
Better Performance = Bigger Benefits
Those companies that put in the hard work stand to realize real value. It is clear that the higher a business scores on the sustainable technology index, the more likely they are to see improvements across a range of KPIs. These include greater financial performance, innovation, customer experience, hiring ability, software quality and ESG goals.
Around half of all respondents reported that they’re already seeing returns on their investments in sustainable technology in at least one of these categories. It’s a promising start — but it’s worth noting that very few companies currently gain multiple business benefits across the spectrum, which is where the full value of a sustainable technology strategy lies.
To put it more bluntly, if the average performers on that sustainable technology index were to move into the group of top performers, they would be 21% more likely to realize at least five benefits. That presents a strong case for an integrated sustainable technology strategy. And those CIOs who are willing to rise to the challenge will drive new sources of value for their business, while lighting its way to a more sustainable future.
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