By: Sarwar Khan

A recent report by the UN has shown that there is no credible pathway to the 1.5ºC target set out in Paris in 2015. The impact of this will be catastrophic. Corporations need to move faster and we’re seeing many of them act.

Companies around the world are being held more accountable for their environmental, social, and governance (ESG) initiatives by customers, employees, shareholders, governments, and regulators. Rising consumer demand for sustainability is driving a change in corporate attitudes across many sectors. Environmental sustainability continues to drive boardroom agendas and consumer focus on climate change.

Many assume the majority of sustainability efforts rest on manufacturing and logistics teams—but information technology can also play an equally critical role in building a more sustainable future. By making sustainability an integral part of technology investment decisions on things such as cloud migration, green coding, 5G, blockchain, Digital Twins, AI, IoT, and virtual reality, CIOs can lead their organizations’ efforts to reduce carbon emissions and waste and accelerate sustainability strategies.
 
That said, going green is not easy. A new survey of 750 digital leaders around the world from BT Global shows that just two percent of CIOs mark sustainability as a top priority for their digital transformation efforts.

Those numbers are alarming and put organizations in jeopardy. Not hitting goals is an issue for companies’ sustainability efforts; more importantly perhaps, organizations could face greater scrutiny from governing bodies like the U.S. Securities and Exchange Commission for failing to prioritize sustainability. 

We’re at a tipping point: regulators are in one place while far too many CIOs and their teams are in another when it comes to prioritizing sustainability. 

What should CIOs do?

First and foremost, CIOs need to start considering implementing frameworks for how to bring sustainability to the forefront of their organization’s digital transformation. Those that don’t will fall behind—or face backlash from governing bodies.

Fortunately, there is a road ahead for CIOs, which includes taking several proactive steps to get an organization properly prepared. Here’s how.

Identify SEC rule changes and the impact they will have

Investors and customers are demanding more environmentally positive action from the organizations they engage with—and they want sustainability efforts to translate into proof of results. An April 2022 survey from a division of Johnson Controls revealed that nearly 80 percent of U.S. consumers consider sustainability (of a product, the retailer, or the brand) when making at least some purchases. It is on the minds of consumers—but it’s not at the center of CIO conversations.

It should be—particularly for any CIOs in the financial sector. This is because we’re in a time of significant regulatory changes in the U.S. financial markets. There are proposed rule changes from the SEC that, if adopted, will have a substantial impact on the industry. Specifically, the changes proposed would require enhanced and standardized climate-related disclosures for organizations.

The disclosures would need to be in an organization’s registration statements and periodic reports, including information about climate-related risks “that are reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements.”

The proposed rule changes would also require organizations to disclose information about greenhouse gas emissions. This has become an increasingly standard metric to assess exposure to climate-related risks. CIOs need to be aware of the pending changes and the impact any digital transformations may have on climate-related risks. 

Understand your organization’s digital carbon footprint to make decisions 

Impending SEC rule changes on sustainability should act like the starter’s gun for organizations, triggering a race to make significant and lasting changes. Our research at BT suggests they’re starting to have an effect—and, really, they should. As CIOs’