By Ann Marie Chow, VP of Customer Operations at Apptio, an IBM Company
Sustainability efforts are intensifying as industries face mounting pressure to reduce emissions. Forrester’s Q4 2022 Global Environmental Sustainability IT Buying Survey reveals that IT estates account for an average of 26% of corporate carbon emissions, climbing to 40% in technology and financial services sectors.
There are several factors moving technology-related emissions up the agenda. For example, regulatory mandates like the EU’s CSRD and the SEC’s climate-related disclosures are putting organisations under greater pressure to report sustainability metrics or face significant penalties.
Simultaneously, cultural and consumer demands are driving transparency, with customers seeking eco-friendly vendors and employees prioritising green workplaces. Business leaders can follow these three steps to mitigate risk, improve sustainability and set their organisations up for success in 2025 and beyond.
Understanding Impact
At the most fundamental level, businesses must develop their ability to consider sustainability alongside their regular cost review process, often referred to as Greenops.
This change in mindset emphasises balancing operational and financial efficiency with sustainability, considering the environmental impact of every operational decision, rather than treating it as an afterthought.
Businesses must then consider how best to track emissions to hold themselves accountable. The modern IT footprint spans on-premises and cloud environments which can complicate this process. Scope 3 is particularly challenging, given that it’s generated by third parties that track emissions in various ways—and this includes cloud service providers, a major component of modern IT’s footprint.
The advent of AI has put a great deal of focus on data centres at the moment given the intense energy demands. Surprisingly however, devices like laptops and smartphones can generate more carbon than data centres, due to short lifespans and carbon-intensive semiconductor manufacturing. As such, it’s essential that teams take a step back and truly examine what factors are contributing the most to their organisation’s IT carbon estate.
Bringing the Data Together to Create a Holistic Picture
Once a company has started to understand its IT carbon impact, the next step is to bring together all the data from across the organisation. With proper tooling, businesses can gather carbon (CO2e) and energy (kWh) data from on-prem and third-party sources, like cloud service providers (CSPs).
By leveraging IT financial management (ITFM) and FinOps solutions, organisations can optimise on-premises and cloud resources while bringing more transparency to operations. These tools consolidate financial and operational data into a centralised view, offering a holistic picture on spending drivers while aligning tech investments with sustainability and business outcomes.
Striking the Balance Between Cost and Carbon
Historically, sustainability efforts have been associated with increased costs but that’s not always the case. For example, addressing idle cloud resources or optimising computing power reduces both costs and emissions. However, trade-offs exist. Cheaper regions are often less expensive because they rely on harmful energy sources. Therefore, using fewer resources and paying less doesn’t always translate to better environmental outcomes.
Companies that adopt tools and automation to allocate both cloud and on-premises technology costs back to the business can start having productive conversations about costs and carbon emissions. This hybrid view provides IT and technology leaders with defensible, actionable data for stakeholders to make data-driven decisions increasingly skew towards being both cost-effective and carbon-efficient.
While tooling is important, software alone often isn’t enough to drive meaningful change. It requires a cultural shift and employees from across the business – whether they have sustainability in their job titles or not – can help make an impact.
Forward-thinking organisations will establish strategies that manage IT emissions by balancing environmental responsibility with business priorities. By embracing innovative tools, GreenOps and new cultural norms, business leaders can ensure their organisations are prepared and resilient in 2025.
