The most recent EY Reimagining Industry Futures Study examined executive attitudes and intentions toward 5G, IoT, and other emerging technologies from respondents across 1,325 global firms from various industries. Organizations increasingly rely on these emerging technologies to advance their sustainability initiatives. The study offers Chief Information Officers (CIOs) crucial solutions and steps to help their organizations rethink their future. It demonstrates that emerging technologies provide advantages that include improved measurement, increased efficiency, and the capacity to create virtual goods and processes.
Findings from the study demonstrate significant convergence between business technology and sustainability strategy. The first part of the article discussed emerging technology as sustainability drivers, sustainability-related benefits of modern technology, environmental, social, and governance (ESG) as a key factor in emerging technology investments, enterprise sustainability strategies already benefiting from 5G and IoT, and how sustainability imperatives are changing perspectives towards industry ecosystems and technology suppliers.
The second part of this article discusses differing industry perspectives on emerging technology and sustainability and considerations organizations can make to ensure expectations translate into long-term value creation.
DIFFERING INDUSTRY PERSPECTIVES
Energy efficiency and business circularity expectations at the sector level showed notable differences when respondents were asked how they perceived the sustainability benefits of emerging technology. Even though 46% of respondents across all industries cite decreased energy usage as the top benefit, only 38% of the healthcare sector mentioned this benefit compared to 54% of the automobile sector. Only 35% of executives in government organizations mentioned reduced waste output, compared to 50% of executives in the manufacturing sector.
The two industries most likely to point to benefits from an emerging technology in gauging the environmental effect of their organizations were government and healthcare, with both at 44%. However, evaluating the environmental impact of suppliers is seen as significantly less critical in government and healthcare but as a significant advantage among manufacturing and energy respondents.
This is because reporting Scope 3 emissions makes it more necessary than ever. Industries know the potential for new technologies to measure performance and advancement. Still, the scope of their ambition varies depending on whether they are concentrating on their organization or expanding to include their supplier chain.
CONSIDERATIONS FOR LONG-TERM VALUE CREATION
ESG factors are already influencing the technology investment decisions of several businesses, and sustainability requirements are expected to overpower other considerations when selecting technology vendors.
However, CIOs can do more to ensure that high expectations result in the production of long-term value through the following points of action:
Long-term sustainable advantages
Although businesses know the variety of sustainability advantages emerging technologies offer, technology leaders must concentrate on their ambitions. Technology leaders must carefully consider the combined impact of many technologies before prioritizing and phasing the important ESG outcomes they seek and selecting the best technologies that can deliver them. Another consideration is including ESG risks as part of the assessment, as ESG risk should be embedded in a company’s enterprise risk management process. These ESG risks can be resolved in certain instances by utilizing appropriate technologies.
Assessing environmental implications
Organizations can examine the carbon footprint and energy efficiency of their emerging technologies portfolio and ensure their approach directly ties into the organization's overarching goals for lower IT energy use. They will have to consider how upgrading their IT to newer standards and technologies will improve sustainability, particularly in how it will impact their carbon footprint and energy efficiency.
Sustainability agendas informed by tech.
Working closely with other leadership roles and responsibilities will ensure that everyone in the organization is aware of how new technology can accelerate ESG goals. Discussions with the Chief Sustainability Officer (CSO) or equivalent role will contribute to properly assessing the acquisition and use of new technology. This will ensure that existing digital transformation roadmaps continue to serve their intended purposes while sustainable principles are more significant as motivating factors.
Sustainability as a guiding concept for relationships with technology suppliers
CIOs are already prioritizing sustainability capabilities when looking for qualities in technology companies. Businesses must prioritize sustainability in their conversations with wider partner networks. Although decisions about vendors and technology investments are currently being made with sustainability in mind, there is still room for more cooperation in the future regarding circular business models and shared ESG objectives.
Technological use cases created with sustainability in mind
Several firms already have established IoT projects, and the rapidly expanding deployment of 5G and edge computing is progressively enhancing these initiatives. Sustainability-aligned results must be incorporated into use cases and deployment methods. To do this, CIOs must consider how new technology use cases might benefit partners, customers, and employees. They must also establish the proper feedback loops with technology vendors to realize their vision.
Using emerging tech to drive sustainable outcomes
With sustainability goals coming under even more intense scrutiny, organizations will have to keep prioritizing the sustainability capabilities and credentials of their technology vendors in the future. CIOs must assess the benefits and drawbacks of developing technologies to achieve sustainability goals, create long-term value, and ultimately build a better working world.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant it. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Joseph Ian M. Canlas is a consulting partner and part of the Climate Change and Sustainability Services team of SGV & Co.