Sarwar Khan, Global Head of Digital Sustainability at BT, discusses the evolution of the CIO and the influence of Digital Transformation on the role.
“As the world becomes increasingly digital and organisations pursuing Generative AI, a shift is taking place within boardrooms. CIOs are now fulfilling more strategic roles to drive Digital Transformation and sustainability.
Going circular
For multinational corporations, the focus has broadened from just carbon emissions to a circular economy model, encapsulating responsible resource consumption, recycling and waste management. As a result, CIOs are being tasked with more than just ensuring the smooth operation of IT systems; they are now expected to drive sustainable digital strategies, helping businesses reduce their carbon footprint while concurrently optimising operations.
Take BT’s initiative as an example; it has recently launched a digital tool to help multinational customers optimise their network environmental performance and measure outcomes. This proposition gives the CIO the power to manage and measure an organisation’s environmental impact in real-time, providing them with the much-needed information to balance performance, energy consumption, emissions and cost.
Of course, digital technologies also play a vital role in helping reduce global carbon emissions as Information and Communications Technology (ICT) is estimated to help reduce CO2 emissions by as much as 20% by 2030. With environmental commitments transitioning from risk management pillars to operating status benchmarks, CIOs are instrumental in integrating these green technologies into their organisations’ operational fabric.
Embracing sustainability
The digitalisation of operations is not just about reducing carbon emissions anymore; it’s now about incorporating sustainable practices into every aspect of the business. For instance, by migrating digital workloads and applications to data centres with lower Power Usage Effectiveness (PUE) factors, organisations can reduce energy and carbon usage. Even seemingly simple steps like digitising supply chains can contribute significantly to sustainability targets.
Another example includes auditing the organisation’s existing network and replacing copper cables with fibre connections where possible bodes impressive gains to optimising energy consumption. Such projects further underscore the expanded role of the CIO in navigating the complex terrain of Digital Transformation and sustainability.
Interestingly, organisations pursuing both Digital Transformation and sustainability simultaneously are 2.5x more likely to be among tomorrow’s strongest-performing businesses. For instance, the use of advanced digital technologies such as IoT, Edge, Data, AI and 5G can play a critical role in an organisation’s transition to net zero. The CIO’s expertise is crucial in evaluating and implementing these technologies to support new sustainability apps aimed at optimising energy use and reducing carbon emissions.
Business reinvention
CIOs are no longer limited to simply being ‘pure techies’. Today, they help lead the charge as organisations globally, and the public at large, embrace a more sustainable future.
The evolution of the CIO has been driven by the demands of Digital Transformation and sustainability. They must now not only ensure that the digital lights remain on, but that those lights shine a bit greener with every passing day.”
Paul Mellon, Operations Director, Stellium Datacenters
The directives from national and global authorities have been evolving from guidelines to mandatory requirements, and 2024 represents a giant step forward in terms of compliance, transparency and yet more commitment.
CIOs are increasingly challenged with what has become known as the three pillars of sustainability: environmental, social and economic. They must weave their way through growing legislation to best position their businesses for:
- Efficiency in terms of using AI/ML/HPC to rationalise use of space, power, cooling and actual future footprint requirements.
- Environmental sustainability to preserve and protect the natural environment over time through appropriate practices and policies, meeting present needs without compromising the availability of resources in the future.
- Social sustainability in terms of commitment to create inclusive societies, reduce inequality and ensure long-term well-being for all people while preserving social cohesion and justice.
- Economic sustainability in practice, aiming to create a balance between economic growth, resource efficiency, social equity and financial stability.
Environmental sustainability for data centres translates into Scope 1 and 2 emissions with Scope 3 emission expected to become mandatory this year – this means laying the groundwork now, putting in place the necessary supplier processes and reporting procedures sooner than later. It’s a game changer. It’s no longer just about power and water usage efficiency and emissions, but right across the supply chain, including mitigating and offsetting the embodied carbon from data centre buildings construction and even IT equipment – purchasing, moving and disposing of IT all has an environmental cost and has a huge impact on an organisation’s carbon footprint.
Moving from on-premise to modern colocation data centres or putting more IT workloads into public or hybrid cloud set ups will reduce much of the CIO’s operational headaches in these respects. Many will have renewably sourced power in place, energy efficient cooling, diverse connectivity, sophisticated energy monitoring and reporting platforms.
There are further benefits of not remaining in house. More easily scaling up or down to keep pace with immediate and future IT capacity requirements, avoiding being constrained while also mitigating the cost of underutilised capacity. Such flexibility, along with the inherent security, resilience, environmental and energy efficient credentials of a Tier 3 colocation or cloud hosting provider, cannot be underestimated.
Even though CIOs will be responsible for auditing and reporting on the wider aspects of their IT’s environmental impact, reputable colocation data centre and cloud providers will help relieve them of the burden of Scope 1 and 2 as well as Scope 3 when it becomes mandatory.
Laurens van Reijen, Managing Director, LCL Data Centers
With the growth of digitisation, the role of IT – and therefore the role of the CIO – has become ever more important to achieve the sustainability goals.
The importance of IT in sustainability
In practice, we see that IT alone is not reported to have a big impact on a company’s overall ESG scores. Possibly because the sustainability manager does not always have a clear view of the concrete role played by the IT department.
Today the focus is mainly on hardware – to reduce energy consumption, extend lifespan and reduce electronic waste, and so on. A company that is serious about its sustainability goals will expect its suppliers to be sustainable too. The IT department can also contribute to this field, by choosing sustainable partners to work with and by including sustainability in the selection criteria for their IT product sourcing. The IT department, and thus the CIO, also have an important role to play in measuring sustainability efforts and in enabling reporting.
The CIO can identify opportunities for improving sustainability across various business processes and take initiatives to digitise processes, for example reduce reliance on paper-based workflows. By analysing data on energy consumption, resource usage and environmental impact, the CIO can see which areas need optimisation and implement targeted initiatives.
The role of the data centre
The data centre services sector can also play its part in a sustainability drive. Some 64% of all data is located in companies’ on-premises IT infrastructure. Housing IT infrastructure and data in a specialised data centre and in the cloud is more efficient, and thus more sustainable than having them on-premises. The EU Green Deal calls for European data centres to be CO2 neutral by 2030. Investments made by your data centre will also contribute positively to your company’s sustainability score.
Mindset shift
To keep growing as a business, it is very important to shift mindsets at all levels concerning sustainability, including at the CIO level.
CIOs should open their kingdom to sustainability managers, who often don’t understand the role of IT and software in driving sustainability across the organisation. This might involve launching innovation challenges focused on sustainability, fostering collaboration between IT and sustainability teams and exploring emerging technologies with the potential to address sustainability challenges.
In the future, customers will ask more and more questions about the origin of raw materials, energy consumption, or reuse of materials. As a company you will have no choice but to address these issues and tackle them with a specific strategy. As a CIO, it’s important to be part of that strategy.
Terry Storrar, Managing Director, Leaseweb UK
Sustainability and its link with strategic IT infrastructure is firmly on corporate agendas this year. Most marked in the data centre industry where environmental targets are a business-critical priority, green considerations are also rippling out to end customers that are increasingly taking environmental impact into account in their IT choices. With broad ramifications for the IT industry, it is inevitable that sustainability is fast becoming a board-level focus, often with CIOs at the rockface.
Accountability at C-level is essential to steering green strategy and securing buy-in to environmental goals and policies throughout an organisation. Notably, data centre professionals must deal with challenges from customers on green credentials to stay competitive, along with handling pressure to comply with government regulations – all of which need sponsorship from the top.
In the EU, businesses that signed up to the Climate Neutral Data Pact have only one year left to deliver on a range of sustainability performance standards. This is driving a sense of urgency to implement ways to reduce energy consumption, optimise power management and further explore renewable energy sources; the success of many of these initiatives depends on a cohesive and focused approach that can be facilitated by an experienced CIO. New mandates will also have a profound impact in shaping the industry; in the UK, many of these will stem from the government’s 2050 net zero target.
Nor are data centre industry customers completely free of responsibility for the planet – in forthcoming years, increasing numbers of businesses will need to justify their own carbon neutral efforts. For example, it is already mandatory for around 12,000 large companies in the UK to document efforts to improve energy efficiency within the Streamlined Energy and Carbon Reporting (SECR) framework. CIOs can drive major decisions towards such requirements; for example, transitioning IT operations to more environmentally friendly business models including IaaS and SaaS.
Achieving the right balance between power, compute demands and sustainable operations will test even the most experienced IT professionals in the data centre industry over the next few years. CIOs in this industry can champion areas such as compliance, along with securing investment for innovation to drive more efficiencies and provide more operational insight on sustainability for customers. If senior executives throughout the IT supply chain rally on net zero targets, there is more opportunity to succeed.
Jason Koffler, CEO, Critical Power Supplies
The CIO role has expanded to incorporate broader organisational strategies, with sustainability often at the centre. Aligning IT strategies with the organisation’s sustainability goals ensures that technology is used responsibly, contributes to sustainable business practices and can lead to cost savings in the long run.
Initiatives such as energy-efficient data centres can reduce energy consumption, lower operational costs and improve overall efficiency, making sustainability a key responsibility for CIOs. Particularly in the data centre industry, technological advancement and environmental responsibility are key areas of consideration so the sector provides a useful lens through which we can understand the growing significance of sustainability.
The idea of a green data centre seems unrealistic, demand is being fuelled by the rapid expansion of cloud services and generative AI, both of which are power and water-intensive technologies. The concentration of data centres in certain regions leads to grid capacity issues and underlines the need for investment in infrastructure. While governments set policies, it is the end-users who bear the financial burden of such investments. This dynamic creates a challenge for the industry to find a balance between expansion and sustainable practices.
It is crucial to adopt renewable energy, but the space required, and the expense of technologies like solar panels and wind turbines, means more creative solutions need to be found. There is a delicate balance between saving money, investing in sustainable technologies and offsetting carbon emissions.
The pursuit of net zero has become a common goal across industries, but the main issue with achieving it at a decent pace is around how you operate and power buildings. Developing effective strategies requires upfront investment in surveys, carbon reduction plans and net zero managers. However, the incremental gains achieved through a sustained commitment to sustainability, akin to droplets in a waterfall, ultimately contribute to a powerful force for positive change.
The issue of sustainability is multifaceted, and CIOs play a pivotal role. They need to manage the complexities of energy prices, infrastructure challenges and the quest for net zero, while balancing technological expansion with environmental responsibility. Integrating sustainability into the CIO role is driven by the recognition that responsible and sustainable business practices are not only ethical but also essential for long-term success and resilience.
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