Why sustainable tech is becoming a top initiative for execs

New data from Gartner shows sustainability is now a top-10 issue for business leaders because it can create greater efficiencies, save money, and address investor demand.

hand holding the Earth in front of green sunny background
Gerd Altmann

Sustainable technologies can increase the efficiency of IT services (and boost overall enterprise efficiency) using technologies such as traceability, analytics, artificial intelligence, and renewable energy — and the issue is now a top 10 initiative for CEOs, CIOs, and other top executives, according to a new report by research firm Gartner.

Gartner found that the issue of sustainability traverses all of the strategic technology trends for 2023. And by 2025, 50% of CIOs will have performance metrics tied to the sustainability of the IT organization.

The findings are part of a report on the 10 top strategic tech trends organizations need to explore in 2023. Gartner announced the findings during its IT Symposium/Xpo this week in Orlando. Environmental sustainability was in 14th place in 2019 and 20th in 2015.

Investments in sustainable technology can pay off by providing new areas of growth. For example, Japanese transport company Mitsui O.S.K. Lines uses AI-powered models to improve shipping efficiencies in the maritime industry. And utilities  such as Dubai Electricity & Water Authority (DEWA), use IoT and digital twins — a virtual copy of the water supply system that can simulate how it behaves — to create smart building management solutions that use 50% less water.

In May, a Gartner survey found that environmental, social and governance (ESG) initiatives are now a top three priority for investors, after profit and revenue. 

“As business leaders feel the pressure from key stakeholders to do more on environmental sustainability, they are now treating the needed changes as opportunities to drive business efficiency and revenue growth,” Mark Raskino, distinguished research vice president at Gartner, said in a statement.

Seventy-four percent of CEOs agreed that bolstering ESG efforts attracts investors. Of the 80% of CEOs who intend to invest in new or improved products this year and next, environmental sustainability was cited as the third largest driver, just behind functional performance and general quality.

gartner sustainability graphic Gartner

Sustainability has also become something as a competitive differentiator – in fact, it is on the same level as brand trust among respondents.

The pandemic, Raskino noted, brought a number of “deep societal trends” to the surface, such as a desire to change the way employees work and the fragility of long-distance global supply chains. More recently, the Russian invasion of Ukraine has aimplified the macroeconomic factors CEOs now face, such as inflation, Raskino said.

At the same time, CEOs’ digital business ambitions continue unabated by the pandemic and related crises. That means executives have to spend more on innovative solutions designed to address ESG-based sustainability goals.

“To do this, organizations need a new sustainable technology framework...," Raskino said.

Jack Gold, principal analyst with J. Gold Associates, said he’s seeing a lot of interest in sustainability, but for now there's more smoke than fire.

Some companies now have sustainability officers, “and that is a good thing as it concentrates the potential for strategic action,” Gold said. But they still represent a minority of companies, “especially if you’re not in the Fortune 1000, or a not-publicly-trader enterprise.

“There is increasing pressure in the public markets to invest in sustainability oriented companies,” Gold continued. “While some companies are willing to make the [significant] investment to achieve a sustainability posture, many organizations are not making the investment, or at least not a sufficient investment.”

Gartner recommends organizations focus on IT infrastructure and workplace services (“sustainable IT”) and prioritize tech investments based on an overall enterprise strategy.

Examples include:

  • Cloud services to raise utilization rates of shared resources and reduce environmental impacts.
  • Enterprise greenhouse gas emissions management software to facilitate collection, analytics, and reporting of past, present, and future emissions data.
  • Supplier sustainability applications to track ESG performance of third parties.
  • Supply chain blockchain to protect, verify and trace transactions, for example, to ensure ethical sourcing.

Gold said companies should not try to move too quickly on sustainability efforts, which are likely to take years to develop.  But organizations can start with simple things like acquiring more energy-efficient equipment, including newer, more power-efficient computer systems, and simple things like making sure to turn off equipment when not in use.

It’s also important to tell employees about corporate sustainability efforts, and educate them on how they can help.

“And finally, designate a person or group to delineate a sustainability strategy that is right for the organization, and then implement it,” Gold said.

One major problem that remains: defining what sustainability is in the first place, according to Gold. The term itself is broad and not universally defined, Gold said.

Generally, though, sustainability can be thought of as is a strategy to reduce the carbon footprint an organization by using  the least amount of non-sustainable energy and converting to sustainable alternatives such as wind and solar. “And that includes not only in your own operations, but also throughout your supply chain and employee chain,” Gold said.

“That’s where it gets a bit confusing and difficult to manage. Is purchasing carbon credits, for example, being sustainable?” he said. “Really, that’s just offsetting your pollution with the better management of sustainability by others."

Many organizations are now feeling the pressure of potential regulations, especially inareas  hard hit by climate change. “So, they are trying to get ahead of the curve by making their own sustainability initiatives, which in some cases are really just window dressing,” Gold said. “And it gets really complicated if you are a multi-national company having to deal with all the various regulatory bodies.”

gartner symposium top 10 trends Gartner

Gartner noted that the top strategic tech trends it idenitifed will continue to drive significant disruption and opportunities over the next decade. Along with sustainability, the other trends to watch include:

The Metaverse
Gartner defines a metaverse as a collective virtual 3D shared space created by the convergence of virtually enhanced physical and digital reality. A metaverse is persistent, providing enhanced immersive experiences. Gartner expects a complete metaverse that will be device-independent and won’t be owned by a single vendor. It will have a virtual economy of its own enabled by digital currencies and non-fungible tokens (NFTs). By 2027, Gartner predicts that over 40% of large organizations worldwide will use a combination of Web3, AR cloud and digital twins in metaverse-based projects.

A superapp combines the features of an app, a platform, and an ecosystem. It not only has its own set of functionalities, but also provides a platform for third parties to develop and publish their own mini-apps. By 2027, Gartner predicts that more than 50% of the global population will be daily active users of multiple superapps.

“Although most examples of superapps are mobile apps, the concept can also be applied to desktop client applications, such as Microsoft Teams and Slack, with the key being that a superapp can consolidate and replace multiple apps for customer or employee use,” Gartner said.

Adaptive AI
Adaptive AI systems aim to continuously retrain models and learn within runtime and development environments based on new data to adapt quickly to changes in real-world circumstances not foreseen or available during initial development. They use real-time feedback to change their learning dynamically and adjust goals. This makes them suitable for operations where rapid changes in the external environment, or changing enterprise goals, require an optimized response.

Digital immune system
Seventy-six percent of teams responsible for digital products are now also responsible for revenue generation. CIOs are looking for new approaches their teams can adopt to deliver high business value, mitigate risk and increase customer satisfaction. A digital immune system provides such a roadmap.

Digital immunity combines data-driven insights into operations, automated and extreme testing, automated incident resolution, software engineering within IT operations, and security in the application supply chain to increase the resilience and stability of systems. Gartner predicts that by 2025, organizations that build digital immunity will reduce system downtime by up to 80% — and that can translate directly into higher revenue. 

Applied observability 
Observable data reflects the digitized artifacts, such as logs, traces, API calls, dwell time, downloads, and file transfers, that appear when a stakeholder takes any kind of action. Applied observability feeds these observable artifacts back in a highly orchestrated and integrated approach to accelerate organizational decision-making

“Applied observability enables organizations to exploit their data artifacts for competitive advantage,” said Frances Karamouzis, distinguished VP Analyst at Gartner. “It is powerful because it elevates the strategic importance of the right data at the right time for rapid action based on confirmed stakeholder actions, rather than intentions. When planned strategically and executed successfully, applied observability is the most powerful source of data-driven decision-making.”

AI trust, risk and security management 
Many organizations are not well prepared to manage AI risks. A Gartner survey in the US, UK, and Germany found that 41% of organizations had experienced an AI privacy breach or security incident. That same survey found organizations who  actively managed AI risk, privacy and security get better AI project results. More of the AI projects moved from proof-of-concept to production and achieved more business value than AI projects in organizations that did not actively manage these functions.

Organizations must implement new capabilities to ensure model reliability, trustworthiness, security, and data protection, Gartner said. AI trust, risk, and security management (TRiSM) requires participants from different business units to work together to implement new measures.

Industry cloud platforms
Industry cloud platforms offer a combination of SaaS, platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) to deliver sets of modular capabilities that can support specific industry business use cases. Enterprises can use the packaged capabilities of the platforms as building blocks to compose unique and differentiating digital business initiatives, providing agility, innovation and reduced time to market, while avoiding lock-in.

By 2027, Gartner predicts that more than 50% of enterprises will use industry cloud platforms to accelerate their business initiatives.

Platform engineering
Platform engineering involves building and operating self-service internal developer platforms for software delivery and life cycle management. The goal of platform engineering is to optimize the developer experience and accelerate product teams’ work.

Gartner predicts that 80% of software engineering organizations will establish platform teams by 2026 — and 75% of those will include developer self-service portals.

Wireless value realization
While no single technology will dominate, enterprises will use a variety of wireless solutions, from Wi-Fi in the office, through services for mobile devices, to low-power services and even radio connectivity. Gartner predicts that by 2025, 60% of enterprises will be using five or more wireless technologies simultaneously. 

As networks move beyond pure connectivity, they will provide insight using built-in analysis and low-power systems will harvest energy directly from the network. This means the network will become a source of direct business value. 

Copyright © 2022 IDG Communications, Inc.

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