What can CTOs do to improve a company's ESG?

CTOs can make ESG an essential component of their digital transformation plans.

What can CTOs do to improve a company's ESG?

ESG (Environmental, social and corporate governance) is gaining popularity across the corporate landscape, especially with the COP26 event. Companies are under high pressure to showcase how they plan to achieve their climate change targets. Technology leaders and CTOs should consider the critical factors of ESG to scale the next generation of the company from day one. A comprehensive ESG framework will enable the companies to create value for the business. This will also help the enterprises be accountable for their newfound responsibilities and promises.

Over the years, there has been an uptick in companies setting and aligning long-term sustainability goals and their profits. However, it is the responsibility of the technology and operations team to bridge the gap between these aspirational and long-term goals by implementing the ESG program shortly. Chief Technology Officers are a crucial part of the ESG planning and implementing a process that helps the organization improve its overall ESG target. CTOs identify and analyze the gaps and constantly monitor for areas for improvement.

Here are a few steps that the technology leaders and CTOs can adopt to achieve the sustainability goals and make an ethical impact.

  • Culture for Transformation – Chief technology officers and technology leaders are the driving force behind the ESG initiatives of an organization. However, it is also vital to get employees of the organization to get on board for the digital transformation project. Understanding the company's vision helps employees and other stakeholders positively adopt the new ESG practices. It's up to the CTO to help the employees, customers, and other stakeholders change their mindset and prioritize the sustainability goals and how it benefits the business overall. In today's marketplace, it's imperative to understand that technology strategies and ESG are intertwined and highlight that these digital tools will help implement the company's strategy.
  • Implement Change – The CTO has critical responsibilities that directly impact the ESG of the company. For instance, how technology, in general, is procured, maintained, and deployed, how new products are designed and built can have a significant impact on ESG and how energy and data connect with data center services. The company can leverage the ESG data, but it must be placed into an explicit context by the CTO and devise a strategic plan to improve the overall business.
  • Digital Transformation and Bridging ESG – The perfect time for companies to plan a sustainable future by adopting emerging technologies is now. Strategy and well-planned transformation methods are the two significant parameters that will help businesses implement successful ESG initiatives. It is critical for CTOs of the organization to support the entire team train and adopt the new technologies and make the best use of them in the present and the future without disrupting the process. Lack of knowledge is one of the most significant barriers to adopting digital transformation from an ESG perspective. It is crucial for the organization that the CTOs drive this digital transformation process and support the employees in the development.
  • Cyber Security – Businesses need to consider Cyber Security as a crucial part of ESG. Today, cyber risk is the prime and most immediate challenge for organizations from a financially material sustainability risk prospective. Businesses will be less sustainable and resilient if the there is no integration of good governance on cybersecurity. It has to be implemented using appropriate metrics and tools. 
  • Societal Benefits – While designing a product for the organization, the CTO or technology leader should ensure that the product is practical and useful, prioritizing the societal benefits and sustainability. For instance, if you are a health or fintech CTO, the product roadmap should include features that will serve the underserved population. There is an opportunity to differentiate the business in socially beneficial ways with societal impact and sustainability as the core element of product innovation.
  • Efficient Workloads – It's essential to understand and analyze the connection between greenhouse gas emissions, power consumption, and computing. As more consumers use cloud services and devices and as more businesses digitize, the energy consumed by data centers are on the rise. However, continuous adoption of cloud computing will help in preventing the emission of carbon dioxide. There are new emerging technologies like serverless computing that help manage your business's infrastructure efficiently. This will help reduce the workload's carbon footprint while making your app or product cost and energy-efficient.

As we move into the post-pandemic business landscape, Environmental, social and corporate governance (ESG) has become an essential component of profitable business. Technology can be leveraged to form the foundations of an ESG enhancement strategy with the much-needed data and insights. The CTOs and technology leaders can deploy the strategy as an integrated component of a more comprehensive digital transformation plan.


(The author is CTO, Treeni Sustainability Solutions)

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