CASE STUDY
wWith enterprises in the Middle East being urged to develop sustainable technology strategies , how should CIOs address the whole sustainability agenda in their organisations ?
For every CIO , sustainability must not only be high on the agenda , but a constant thread through everything they do . For most CIOs in larger companies , they have been making some kind of sustainability effort in recent years . This is being driven by a few factors .
Firstly , general awareness of the need to reduce emissions , as highlighted by high level reports such as those from the Intergovernmental Panel on Climate Change ( IPCC ) and gatherings such as COP26 , based on widely collected data from multiple sources and disciplines that show the extent of human-influenced climate change .
Secondly , capital in markets is now becoming sustainable , driven by the needs highlighted in these reports . McKinsey describes data centres and technologies like hydrogen distribution as nextgeneration investments , highlighting that traditional risk-based classifications for infrastructure investing “ are being challenged by fundamental drivers led by the energy transition , including sustainability targets , electric mobility and digitisation .”
Thirdly , customers are now including sustainability credentials as part of their purchasing deals . RFPs now have sustainability sections , looking for hard metrics .
In light of all this , the CIO has a key role in providing the information and management systems that will allow an organisation to understand its full impact , from Scope 1 – 3 emissions . Only with that full understanding will an organisation be able to confidently meet emissions regulations , fulfil ESG commitments and have those achievements differentiate it as a responsible global citizen when doing business .
What is environmental , social and governance ( ESG ) and why should it matter to CIOs or any IT leader ?
Sustainability has to be an integral part of business going forward , but it is also a risk management essential and a company ’ s path to the future ; it is a way to foster innovation and differentiate your business in a competitive market . There are challenges to overcome with climate change , social unrest , reputational impacts from unethical conduct and changing consumer preferences . However , there are also opportunities , in innovation , resilience , recognition , cost-savings , talent acquisition and retention and Disaster Recovery preparedness .
The CIO has a key role in all of this to ensure that the IT systems and infrastructure are there to support efficiency , as well as manage the systems that will gather the right data , analyse it , and turn into actionable intelligence to guide the COO , CFO and CEO in doing what is necessary .
Schneider Electric has written extensively on this , sharing our findings in a range of reports and tools on sustainability , ESG reporting , shared frameworks and developing a sustainability disclosure dashboard .
What specific criteria should CIOs consider for ESG ? And regionally , for organisations in the Middle East ?
ESG reporting in general needs to consider some key points .
When building and growing your company ’ s ESG reporting practice , you need to determine firstly which topics to address . Your level of ESG sophistication , industry , geography and other factors influence what your company should report on . Understanding this and identifying priorities is known as a “ materiality assessment .”
Then , identify which level of material assessment is necessary . Materiality assessments can vary in depth and inclusivity . A more extensive and comprehensive study will include feedback for all internal and external stakeholders to get a 360-degree view of a business , its risks and its impacts .
It is also important to decide on frequency of disclosure . The amount of information that is appropriate and necessary to disclose and how frequently you should communicate on it externally You must align with frameworks and certifications . Not all standards are made equal . And not all companies should respond to every framework ’ s guidelines . It ’ s important to identify what is appropriate for your own circumstance . The same goes for selecting the right ranking agencies . Making the right information available and engaging with relevant rating and ranking agencies increases the likelihood that your organisation will be recognised in these benchmarks .
Across the Middle East region , ESG has become an important part of governmental agendas , as reported by Bloomberg , as economies in the region shift towards low and ultimately zero carbon futures , it has moved centre stage .
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