How sustainability is (or should be) shaping IT decisions in 2023

If you’re doing business in 2023, you can’t escape the topic of sustainability. The pressure is on for businesses to act more responsibly. In turn, most businesses have done so—but to what effect?​

We surveyed IT decision-makers from around the world to understand how sustainability is shaping their decisions—and how much it really matters to their organizations. This white paper outlines some of the data insights that came from that research. If you’d like to dive deeper into the implications of this data, you can read “How to invest in sustainability by investing in technology,” an accompanying white paper where we interpret some of the trends in sustainability strategy and how bringing these efforts closer to technology strategy can help organizations achieve the best of both worlds.

The vast majority of people in business, when asked to look at their own company’s credentials on sustainability will look at themselves favorably. Almost every business claims to have made sustainability a very high priority. And a surprisingly large number will claim maturity in the area. Both things are on par with digital transformation, which is a more accepted and proven universal priority for businesses.

The priority given to sustainability is backed up by the budget that is being assigned to it. There is a fairly even priority between the key objectives we would expect to see. Companies investing in key technologies went up during 2022—although there is an anticipated decline ahead for 2023.

Average split of IT budget chart
What percentage of your total IT budget was spent on each of the following over the past year? (Q1)
technology investment trends plot chart
Has your organization invested in any of the following over the past year and/or will you invest in them in the coming year? (Q2)

Barriers to sustainability

Despite the priority given to sustainability, organizations report a number of barriers or other issues that hinder their ability to deliver on sustainability effectively.

There is a mix of cultural and technological issues affecting sustainability. For some, having the right technology is a challenge. For others there are problems getting sustainability onto the right status level in the organization in order for it to become a natural part of operations. 

challenges to sustainability bar chart
Regarding the success of sustainability initiatives, which of the following have created challenges for your organization to reach its sustainability goals? (Q5)
When looking in a little more detail, we can see some of the more specific challenges emerging…many of which are accelerated by the sprawling nature of an organization and its processes. 
Hinderances to sustainability efforts bar chart
What are the challenges that hinder your sustainability efforts? (Q12)
Investigating how companies prioritize certain practices helps to understand why some of these barriers exist. Without relevant targets and incentives, for instance, behaviours will be slow to change. 
Priority for sustainability bar chart
Comparing your company’s sustainability goals to commercial performance, how strongly do you agree or disagree with the following statements? (Q6)

Business benefits of sustainability

When faced with the notion that many organizations are struggling to get to grips with some of the enablers for sustainability, the immediate next question is why? Part of the answer is perhaps that there is a mis-understanding of how valuable sustainability initiatives can be for the business.  

When put in context of the impact on sales potential, for example, sustainability credentials certainly take on a higher value. The credentials of a company and of the products it sells are both equally important for the buyers in making their decisions.  

Importance of sustainability credentials when buying from a company pie chart
How important is it for your company to buy from tech companies that have strong sustainability credentials? (Q7)

There are also mounting risks from the perspective of both investors and employees. As younger generations (who place a higher premium on sustainability) increasingly influence investments and are more valuable to organizations, the consequences of losing them because of opaque sustainability policies and performance become greater. ​

Interestingly, the fear over these consequences is notably higher in North America than it is in Europe. This could be a reflection of the faster moving investment and employment markets there as much as an indication of stronger conviction on these issues. 

Company will lose employees and investors graphic
How strongly do you agree or disagree with the following statements? (Q9) My company is likely to lose investors if it doesn’t have a transparent sustainability strategy. My company is likely to lose employees if it doesn’t have a transparent sustainability strategy.

What needs to change

If there are benefits to be had from clearer plans and better sustainability performance, the next step is to look at what needs to change in order to get different outcomes. 

One of the first things is that the way in which sustainability is operationalized needs to become more coordinated. While one third of companies manage to build sustainability projects into the technology roadmap, but for the majority things are more informal. 

How sustainability projects are operationalized pie chart
What is your main approach for the operationalizing of your sustainability projects through the use of technology? (Q16)
Another cultural change to overcome is the idea that the penalties an organization can incur for non-compliance on sustainability are an acceptable alternative. The fact that 82% of companies are likely to accept the penalties instead of solve the root cause issues points to the solutions being too expensive or complicated. 
Those who think their companies would willing take the regulatory penalties pie chart
How strongly do you agree or disagree with the following statements? (Q9) My company is willing to accept regulatory penalties to avoid the cost or difficulty of sustainability compliance.
People perceive greenwashing to be quite prevalent. However, far fewer people believe that their own company is at risk of greenwashing, in comparison to the companies around them. Organizations must make sure that they hold themselves to the same standards as others when being transparent about their achievements. 
Where greenwashing is perceived bar chart
Do you think ‘Greenwashing’ is prevalent in the following areas? By greenwashing, we mean conduct or marketing that portrays an organization's products, activities or policies as producing positive environmental outcomes when this is not the case or cannot be validated (Q13)
The most impactful change, however, could be made by companies unifying their  sustainability and digital transformation objectives. Not only would this help to address culture and priority, it’s also a way that organizations can get more value from tech investments. 
Companies who have digital and sustainability as separate objectives bar graph
How strongly do you agree or disagree with the following statements? (Q10) Digital transformation and sustainability are separate objectives.

What’s the Solution?

The solution, of course is a complex one. However, we have identified some perceived correlation between investment in digital transformation and sustainability achievements. If companies can find ways to bridge that gap between the two objectives, they can make more of their investments as well as important headway when it comes to sustainability. 

Better digital capabilities can help with decision making and operationalizing sustainability initiatives. Digital maturity is seen generally as supporting sustainability, while coordinated investment is seen as a sign of long-term strategic thinking. 

How digital helps sustainability graphic
How strongly do you agree or disagree with the following statements? (Q10)
Looking at specific technologies that can help with sustainability, we see that cloud is overwhelmingly the one area that has had the biggest possible impact. However, there are a number of other tools that are helping organizations realize sustainability success. The below data show the technologies that are in an organization’s top three most impactful. 
Technologies that were top 3 in positive impact on sustainability bar graph
What technologies have most positively impacted your company’s sustainability? (Q11)

                You may also like:

The guide to becoming a sustainable, connected enterprise 
Sustainability matters now more than ever. But becoming a sustainable enterprise, you need to be a connected one. Learn more about what it takes.  
customer story
ERA: Bringing the potential of the IoT to the racetrack
The Electric Racing Academy (ERA) is is using the IoT to radically transform motorsports forever – making it greener, more inclusive and more engaging in the process.
Learn how to simplify the connected world
Digital transformation isn’t easy. In fact, it’s wildly complex. Learn how you can simplify the connected world with a digital backbone that brings everything together. 

                    How to invest in sustainability by investing in technology