This blog was created from a recent episode of Device42’s podcast, The Hitchhikers Guide to IT. You can find the latest episodes here.
Sustainability has come a long way in the past decade. Enterprises that previously struggled to understand their carbon footprint now have a wealth of standards, frameworks, and tools to leverage. More than 80 percent of all businesses now have internal sustainability goals. In addition, sustainability is cited as the number-one corporate priority for Q1-Q2 2023, despite economic uncertainty, Futurum Research finds.
It is against that backdrop that Todd Weatherby, founder of Rafiki Advisors joined host Michelle Dawn Mooney to discuss “Sustainability in IT” for our third episode of The Hitchhikers Guide to IT.
Weatherby got his start in technology working for Oracle, Microsoft, and AWS and most recently served as executive sponsor for AWS’s sustainability efforts in 2023. Now, he works as an independent consultant, helping companies accelerate their progress with sustainability and other strategic imperatives.
New to the field, Weatherby did a deep dive on sustainability principles and frameworks when he took on his new role at AWS. He highlighted the UN definition of sustainability which is “development that meets the needs of the present without compromising the ability of future generations.” “Those principles are pretty hard to argue with,” Weatherby said.
“There’s so much opportunity to make improvement(s) and make the world better and more sustainable for future generations. And it’s exciting in that way for me,” Weatherby stated.
The Greenhouse Gas Protocol, which characterizes emissions by different scopes, helps enterprises set strategies and prioritize improvements. Scope 1 emissions are the direct carbon emissions that companies produce. Scope 2 emissions are indirect emissions created by power consumption. And Scope 3 emissions are those produced by a company’s extended value chain. “And so when you get these mental models, you can start to get your arms around what does sustainability mean broadly and where can we see improvement? Where can we start? Where can we make improvement over time?,” says Weatherby.
Working for AWS, Weatherby saw how customers were facing increased regulatory and stakeholder pressure to improve the sustainability of their operations. As a result, customers were asking AWS about the sustainability, cost, and time required to migrate compute processing, databases, and networking to the cloud. They also wanted to know how cloud solutions could provide insights that they could use to accelerate their sustainability progress more broadly.
“And so those conversations have really started to heat up now that IT has had to respond to their business stakeholders, business stakeholders responding to regulators and external customers.… The challenge, of course, is that the measurements are all new. And so it really becomes what data are we looking at? How do we collect more data? How do we make sure it’s credible? How do we make sure it’s accurate, complete? And then how do we apply that data to iteration and improvement?… We used to just hear it [on] the business side. And now we’re also hearing it on IT,” stated Weatherby.
How Cost Pressures Influence Sustainability Imperatives
Host Mooney asked how recent market developments have impacted enterprise priorities. Many companies are facing greater pressures to reduce costs, due to economic uncertainty, rising production and labor costs, and unpredictable customer demand, among other factors.
Weatherby acknowledged enterprise cost pressures, but said that companies have the opportunity to use sustainability to reduce their cost structure and differentiate themselves with customers.
“If you are reducing the cost of your product by reducing usage, you can increase the value to your customers. So you can build in this efficiency of usage of resources, energy, power, water. You can build all that in as a way of increasing value to your customer, but also as making your operations internally more efficient,” he said.
Who’s Leading on Sustainability
The conversation turned to a discussion of which organizations are leading on sustainability. Many companies are voluntarily committing to aggressive action on sustainability and are signing pacts and accords to hold themselves publicly accountable to achieving key goals.
Weatherby cited the Paris Accord and signatories’ pledge to reach net zero emissions by 2050. He also mentioned Amazon’s work to co-found The Climate Pledge, which 253 companies have signed and committed to becoming climate-neutral by 2040, 10 years before the Paris Accord.
Amazon is also working to become water-positive by 2030, giving back more water to communities than the company uses, and using 100% renewable energy by 2025.
Using Technology to Improve Sustainability Performance
So, how can enterprises use technology to gain a holistic picture of emissions, focus on the right sustainability imperatives, and increase the pace of progress?
Weatherby recommended that companies select key metrics and baseline current performance. Persefoni provides carbon accounting software that many enterprises and government agencies are using to develop a holistic picture of their carbon emissions, he said.
Next, companies can use technology like data lakes to aggregate multiple internal and external data sources to take snapshots of results and analyze key trends. In addition, they can leverage IoT technology and edge computing, putting sensors on the devices they use around the world, collecting, and synthesizing data.
With digital twins technology, businesses can create virtual images of infrastructure and processes to understand and model improvements. Weatherby shared the example of building a commercial facility. Teams could simulate all the materials they plan to use, such as concrete, to uncover embodied carbons. By doing so, stakeholders understand the carbon footprint of a facility before building it.
Finally, Weatherby highlighted the growing trend of creating circular business models, where companies design products for reuse and recyclability. While this process typically requires that firms reconceive both products and packages, they can extend the lifespan of goods as they are used, returned, potentially repaired, and then filled again or recycled into other products.
Opportunities and Challenges for Sustainability in 2023
So, what opportunities and challenges lie ahead this year?
Weatherby said there is an opportunity to increase leader and team awareness of — and education on — ESG and sustainability issues. He cited himself as an example of a senior leader who has more recently become aware of the importance of future-proofing business models, products, and services, by reducing their carbon footprint.
Venture capitalists want to fund innovative ideas in climate technology. In fact, more than a quarter of all venture funding in 2022 went to innovative climate solutions, with more than $260 billion raised since the beginning of 2022, according to PWC. This ready source of capital is attracting more talent to the space, with new startups being founded to explore innovative approaches to reducing emissions. “The innovation, the ideas are coming from all over the place,” said Weatherby.
In terms of challenges, Weatherby said that companies will need to decide whether to build or buy climate technology products, to meet their business requirements, timeframes, and budgets. In addition, not all firms possess the internal skills to develop their own solutions.
If companies try to build technology themselves, they may risk missing targets and losing time. In addition, firms will want to spend the bulk of their time on Scope 3 emissions, which “are the hardest challenge of them all,” said Weatherby. Firms need to measure suppliers’ emissions and then drive process improvements through their supply chain, distribution channels, and their customers, he said.
“Companies who have done it find out that there’s huge leverage in that. Companies who are still trying to stay insular and inside and just figure out theirs because they feel like they got to get their house in order, I’d encourage them to open up quickly and start collaborating up and down your value chain. I think that’s the biggest challenge, but it’s also the biggest opportunity to catch up. We’re behind on a lot of these metrics. There’s great leverage in our networks around our companies. I think that’s an opportunity and a challenge all at once,” stated Weatherby.
Why Sustainability Matters
Host Mooney concluded by asking why sustainability matters.
Beyond corporate goals, many leaders are motivated by a personal desire to leave the world in a better place for generations to come. Weatherby said his children are excited about sustainability and his work in the field and are pushing him to do more.
In addition, Weatherby, like other leaders, feels a strong sense of urgency to increase the pace of progress. He cites scientific research that says 2050 is the “breaking point, where if we don’t have this under control, then it’s downhill from there.”
What can others do? Weatherby encouraged his listening audience to be curious, learn, look for allies, and not be consumed by politics. Instead, they should focus on implementing the right metrics, but favor implementing good metrics at pace rather than perfect metrics later.
After that, companies should find opportunities to improve and then iterate.
“We know in the IT world that agile methodologies of iteration are a lot more effective … often than these big waterfalls where we take [a] long time to get through one version and another long time to get through the next,” said Weatherby.
If enterprises around the world are constantly innovating and iterating, they can make significant strides with sustainability. In addition, they can share winning ideas via best practice communities, enabling others to benefit from their innovations.