More than 50% of the companies we met with raised the issue -- unprompted.
Digital transformation is making every business faster, smarter, and more connected. At the same time, it’s also putting pressure on businesses to reduce their environmental footprint and make sure that their IT operations are socially responsible. Are we at a point where we were with security five years ago, where you can no longer ignore the importance of social governance in your IT environment?
Data Security & Compliance
When I began conducting interviews with IT executives for DZone in 2015, GDPR and data security were only the concern of CIOs and CTOs -- there weren't many CISOs then. Data security was a nuisance to CEOs, CSOs, and COOs. IT just needed to "handle it."
Once the Equifax hack occurred in 2017, I noticed a huge change in emphasis. All of a sudden, CEOs, COOs, and other c-level executives were hearing from their boards of directors that data security and protection was now "job one."
Likewise, GDPR and CCPA were not taken seriously until fines started being handed down. Today, international enterprises realize the risk of not keeping personal data, secure, private, and in the proper geographic region. The implications from a brand integrity standpoint are huge, as are the economic consequences.
The explosion of data, the desire to preserve and protect data for decades, and the concerns about data breaches are driving companies to find creative solutions.
Many companies have moved their data to the cloud in an attempt to better protect it in a more cost-effective way. 76% of the global 2000 are now running a multi-cloud infrastructure and 94% of businesses have a multi-cloud strategy. However, the management, protection, and security of cloud data lag behind. Also, the on-premises data center is not going away.
Others are exploring solutions that enable them to get more value out of their existing infrastructure. They are also investing in data security solutions including firewalls, intrusion detection systems, and encryption.
The Rise of Sustainability
During the most recent IT Press Tour, I had the opportunity to meet with nine companies to learn about the current and future state of their business. Five of the companies, iX, Lightbits Labs, Liqid, Vast, and Veritas, mentioned sustainability in their presentations without any prompting.
Here are a few points they shared with regard to sustainability:
44% of CEOs see a net-zero future in the next ten years
59% of CEOs are deploying low-carbon and renewable energy across their operations
99% of large-company CEOs say "Sustainability issues are important to the future success of our business."
Exploring "upcycling" by extending the useful life of existing infrastructure.
Environmentally conscious businesses experience lower volatility and 4.7 times higher margins.
Waste in Data Centers
Data centers use huge amounts of electricity and water. They are also inherently inefficient with low infrastructure utilization rates: 44% non-production, 40% oversized, 76% idle time, and 50% overspent.
Datacenter footprint growth has grown from 500,000 data centers in 2012 to 8 million data centers today. Data centers are projected to use 20% of the world's electricity by 2025.
Global data centers currently use 190GW of power and 1,600T gallons of water per year. Power and colling cost now make up the majority of the costs to deploy large-scale data centers.
As such, a number of solutions providers are identifying ways to help data centers reduce their carbon footprint by reducing the space needed, improving server software, and optimizing technology.
We're seeing power reduction claims of 91%, space reductions of 83%, and productivity improvements of 2 to 3X. While hyper scalers have the most money and greatest incentive to invest in these improvements, they will become the "table stakes" for all large enterprises moving forward.
What is Environmental Social Governance?
ESG is an approach to governing business that goes beyond legal compliance to include being socially responsible. It’s about asking questions like “How does our business impact the environment?” “How do our vendors impact our workers?” and “How do our customers feel about the experience we are providing?” ESG is a way of governing that takes into account the environmental and social impact of your business. It’s a holistic approach that is inherent to the business, not an add-on or after-the-fact consideration.
Why is ESG so important for IT?
IT touches every aspect of a business – from customer experience and worker productivity to vendor relationships and financial performance. It’s hugely important to ensuring IT operations are socially responsible and the right governance in place to make sure that happens.
Given the power requirements of owned and contracted data centers, IT decision-making can have a huge impact on a firm's impact on the environment.
Tips to implement ESG in your organization
Hire for culture and values. Great people are the cornerstone of a great IT department. But hiring for culture and values are more important than ever when hiring for ESG. You need people who understand the importance of ESG within the business, and you need people who will also take action to improve their ESG every single day.
Make customer experience a priority. We all know customer experience is important, but it’s even more important when you’re thinking about how your IT operations impact the customer. Think about how you can use customer experience to make sure everything is on the up and up.
Put pressure on your vendors. Vendors can make or break an ESG strategy. They are the link between your business and its suppliers, so they have a lot of power. Make sure you put pressure on them to be more socially responsible as well.
Create a culture of continuous improvement. There is no finish line when it comes to ESG. There is no “OK, we’re done.” You have to create a culture of continuous improvement that is always looking for ways to make the business even better.
IT is a critical part of every business and makes up a significant chunk of a company’s environmental and social footprint. Therefore, environmental social governance in IT is important for every business as it helps them minimize their environmental and social responsibility risks.