My fascination with technology led me to sustainability but didn’t stop there.
Bucharest, March 2002. As the phone rang, my heart skipped a beat. Fresh out of university, I had applied for a job at a global software company which was opening an office in Romania. The manager broke the good news: I had gotten the job.
I was beginning to see the immense possibilities for software to transform the world and realized why my new job was so appealing. My passion for futurism and progress, sparked by sci-fi books and films, had found a playground: working in technology.
Twenty years later, my career pivoted to sustainability consulting. The insights I gained from seeing companies become more efficient through digitalization were a solid basis for my new endeavour. I still believe in the power of tech to transform business and society through innovation. I enjoy a good dystopian story every now and then, while I remain an incurable optimist. Technology will help us live in a better world, but how? And are technology companies ready to play their role in sustainable business transformation – now?
For any company, running sustainable operations comes down to their specific business model, industry, size, and geographical coverage.
When we talk about sustainable business, we take two major areas into account:
- How a company runs its own operations
- How its products and services serve other companies to be more sustainable
In this article, we´re going to focus on the first aspect:
The sustainability areas that software and IT services companies need to manage and report.
The sustainability reporting standards issued by the International Financial Reporting Standards (IFRS) and the recently created International Sustainability Standards Board (ISSB) include industry-specific metrics. They allow comparability within an industry and are the basis for assessing materiality. The SASB Standards, now part of IFRS Foundation, list the following disclosure topics for software and IT services:
- Environmental Footprint of Hardware Infrastructure
- Data Privacy & Freedom of Expression
- Data Security
- Recruiting & Managing a Global, Diverse & Skilled Workforce
- Intellectual Property Protection & Competitive Behavior
- Managing Systemic Risks from Technology Disruptions
If you’re familiar with the ESG acronym, you will notice that these topics span all letters – from environmental criteria to social and governance topics.
Analyzing the sustainability metrics specific to software and IT services is a pragmatic way to start your reporting journey. It ensures transparency for investors, who are accustomed to this way of reporting, and regulatory bodies. It also gives all stakeholders a clear view into how a company performs in terms of sustainability. Reporting based on clear metrics and KPIs enhances policies with real performance data, comparable over time, and within the industry.
One of the main disclosure areas required by both European and global standards (like IFRS Sustainability Standards) includes an explanation of a company’s strategy, including analysis of sustainability-related impacts, risks and opportunities. This analysis goes beyond the company’s borders and extends into its supply chain, partner ecosystem, clients and the environment. In a future article, we will explore opportunities for software companies to respond to the increased demands for sustainability from all their stakeholders.
Our consultancy was founded on the backbone of long careers in tech. We are closely watching green tech, including tools that support emissions measurement, supply chain transparency, and sustainability reporting. There are new and innovative applications of AI in sustainability communications. I firmly believe that software and technology companies have countless opportunities to make a sustainable impact on their clients’ businesses and society in general. The immense possibilities for software to transform the world are now an obligation.