What’s the CIO’s role in developing a sustainability strategy?

Organizations are under pressure to demonstrate commitment to an actionable sustainability strategy to meet regulatory obligations and to build positive market sentiment. CIOs and IT leaders are uniquely positioned to contribute based on their ability to extract vendor commitments, prioritize socially relevant improvements, and lead data strategy as it informs AI and automation investments. We examine the opportunity to lead both risk mitigation and value creation by helping advance the enterprise sustainability strategy.

Stakeholder expectations are driving action

Investors and stakeholders are universally paying attention to sustainability-related risks and opportunities, and private companies are increasingly leaning into sustainability commitments. For example:

Walmart’s management of supplier commitments helped meet defined targets six years ahead of its 2030 deadline.

Starbucks has committed to redesign cafés to improve accessibility.

Verizon has allocated $1 billion in investment funding to support renewable energy.

Conversely, companies running afoul of sustainability principles are increasingly feeling the impact. For example, both Coca-Cola and Nestle have been discredited with charges of greenwashing based on misrepresentation of sustainable packaging strategies, with impacts on both reputation and stock price. Volkswagen’s share price took a double-digit drop after altering test results to hide egregious emissions data while actively promoting the low-emission and eco-friendly features of its vehicles.

Stakeholder expectations are driving focus. For example:

WSJ’s survey of more than 2,000 U.S. business leaders found that 71% of respondents were committed to a net-zero target and a further 26% reported targets to be under development.

IDC research indicates that nearly 30% of organizations worldwide have embedded sustainability into their business model and overall strategy.

IDC’s Worldwide Sustainability predictions suggest that in 2024 some 35% of organizations will generate sustainability benefits, using AI to generate sustainability-driven cost benefits and competitive advantages.

Sustainability maturity enables impact

Sustainability maturity is a progressive scale for turning awareness into action, formalizing commitments and activities, and collaborating to enable actionable thought leadership.

Competent Boards, 2024

Every organization can have an impact by starting with small, measurable commitments and moving along the maturity model for engagement and commitment.

Pick your lanes

An impactful and actionable sustainability strategy starts with a clear articulation of the lanes for investment, focusing resources on the specific ways to have impact. For example, McDonald’s has gone beyond looking for gains through its core food business and is developing biodegradable synthetic fabrics to uniform more than 2 million team members worldwide.

Successful sustainability programs prioritize work based on five key factors:

Alignment with the business strategy: Ensure alignment between business strategy and operational imperatives; sustainability commitments and investments will fail otherwise.

Cross-industry and ecosystem dynamics: Look to leverage and amplify sustainability efforts via strategic partnerships and collaboration.

Operational opportunities: Look at spending and major work components to identify the highest-impact areas for focus.

Data, analytics, and AI investment strategies: Leverage work already on the digital road map and then overlay initiatives for sustainability and social ethics.

Transitional strategies: Increase opportunities for success by prioritizing work that is culturally aligned with the values of the organization.

Identify specific efforts that will have a measured impact, and establish the governance, tracking, and reporting to ensure the efforts are successful.

Partner for success

IDC research indicates that industry ecosystems are increasingly teaming up to facilitate sustainability strategies, discuss challenges, and share best practices.

IDC’s Future of Industry Ecosystems MaturityScape Benchmark Survey, 2023

Notwithstanding the power of collaboration, high-profile programs bring the risk that new partners will present themselves opportunistically. Choose the right allegiances by being intentional about:

Criteria for value: Be clear about the criteria for value including profile and relationship outcomes, anticipated level of effort to support the collaboration, and the risk dynamics in support of maturity development.

Relationship clarity: Be specific about the opportunities including technical capabilities, the nature of the combined voice being created, and funding elements where partnerships often bring an infusion of resources.

Plans for development: Identify the leaders who bring genuine authority to ensure alignment on joint outcomes and commitments.

Management for impact: Establish clear governance and well-defined performance measurements for the partnership.

Partnership experts suggest that 50% of business partnerships fail. Diligence and structure are critical for sustainability partner relationships.

Operationalize key maturity development initiatives

Operational approaches, objectives, and reportable targets give momentum to a sustainability strategy, by leveraging every opportunity for impact no matter how small. Build an operational framework that supports a balanced scorecard based on these four key strategic questions:

For financial success, how will the sustainability strategy be seen by stakeholders?

For operational success, what processes and capabilities must we excel at to satisfy our stakeholders and customers?

For customer success, what will customers perceive our vision to be?

For maturity development, what is our plan for continuous improvement?

Learn more about IDC’s research for technology leaders.

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the technology markets. IDC is a wholly owned subsidiary of International Data Group (IDG Inc.), the world’s leading tech media, data, and marketing services company. Recently voted Analyst Firm of the Year for the third consecutive time, IDC’s Technology Leader Solutions provide you with expert guidance backed by our industry-leading research and advisory services, robust leadership and development programs, and best-in-class benchmarking and sourcing intelligence data from the industry’s most experienced advisors. Contact us today to learn more.

Alizabeth Calder, an adjunct research advisor with IDC’s IT Executive Programs (IEP), is the former CIO of HomeEquity Bank, a contributing writer to IT World Canada, and a best-selling author and sought-after keynote speaker. She focuses on bridging the gap between the technology sector and the leaders who provide the governance and investment needed to succeed. Prior to her current role, Alizabeth was CIO at firms including IBM, Loyalty Group (a Division of Alliance Data), and CML Healthcare. Her more than 35-year technology career includes transformational success in banking, financial services, transportation, logistics, healthcare, analytics, and professional services. Alizabeth is a recognized thought leader on digital oversight and board engagement, including strategies to close the value gap and deliver the right level of digital maturity to have a long-term impact. Alizabeth has also been an expert in cybersecurity since the 1980s, providing a unique bridge for directors and C-level executives on one of their most critical risk considerations.

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