By: Christina Shim, Global Head of Product Management & Strategy, IBM Sustainability Software
Next month, scientists, political leaders, and business people from around the world will gather in Dubai for the 28th United Nations Climate Change Conference. The annual event, billed COP28, will come after the hottest summer in recorded history and some of the most extreme and destructive flood in Europe and North Africa.
The stakes are real. Estimates show that more than 90 percent of businesses have at least one asset financially exposed to climate risks. Climate risks are prompting credit downgrades and raising borrowing costs for cities, countries, and companies. This year, in fact, the U.S. has already set an unfortunate record with 23 separate billion-dollar weather disasters—with months still left to go. It’s clear: the world needs to seize every opportunity it can to move toward sustainability.
The good news is that business appears on board. IBM research shows that 95 percent of organizations have developed operational ESG propositions. CEOs and their executive teams increasingly have compensation tied to sustainability goals. And four out of five CEOs expect sustainability and ESG investments to actually improve business results in the next five years. CEOs know the time to act is now.
New technologies, often software and IT, are also giving organizations unprecedented capabilities. AI is helping consolidate and analyze massive amounts of data, giving business leaders insights on how to reduce energy costs, minimize waste, and lower emissions. Sensors and software are helping enable predictive maintenance that can significantly extend the life of infrastructure. Technologies are also optimizing how organizations use the Cloud and helping fuel smarter and more sustainable supply chains.
Turning ambition into action
The bad news is that there may be a gap between perception and action. New survey data—collected this August by Morning Consult for IBM’s 2023 Sustainable Business Snapshot—shows that an impressive 93 percent of sustainability and IT decisionmakers think their company is somewhat or very mature in using data to track sustainability progress. Yet only 42 percent of that same group say they are ready to report on Scope 1 emissions—the greenhouse gas emissions directly controlled by an organization.
The report, which polled 3,250 global business leaders from companies with 1,000 or more employees, found that surveyed executives broadly understand that IT investments impact their organization’s sustainability. Nearly two-thirds of organizations have dedicated budgets to apply IT toward sustainability, and 38 percent plan to significantly increase their spend in the next year.
Yet, while the respondents feel mature in tracking sustainability, the metrics that they describe collecting suggest another story. About half track energy consumption. A little less than that track Scope 1 and Scope 2 emissions. Only a third measure supplier metrics. Moreover, 60 percent say that reporting and compliance is challenging. Eighteen percent say additional investment in IT for sustainability is hindered by lack of data or insights on a path forward. Another 18 percent said they have no strategy at all.
Innovating toward a low-carbon future
This week precedes another weekslong event starting in November: the UN Climate Change Conference, or COP28. Since 1995, these meetings have sought to foster collaborative action on climate change, resulting in the famous 1997 Kyoto Protocol and 2015 Paris Agreement.
For businesses that need a strategy on IT and sustainability, those that need more data and insights, and even those who just want to accelerate progress toward their sustainability goals, now is the time to take action—and COP28 will be an opportunity to both find solutions and demonstrate commitment to a more sustainable future.
While some businesses may be overconfident, it’s hugely promising that the vast majority are motivated. A clear-eyed, data-driven assessment will let them better see where they are, where they want to go, and how to get there. Then, organizations can align business and sustainability objectives, and build data-driven feedback loops that operationalize sustainability end-to-end.
Fortunately, technology that can help is improving every day. Survey data suggests organizations are leaning in; despite the complexities surrounding AI, 91 percent of respondents to IBM’s Sustainable Business Snapshot felt AI will play a positive role in helping them achieve their sustainability objectives. Forty percent reported already using AI in these efforts, with another 40 percent planning to adopt it soon.
As so many recent events make clear, building a more sustainable world has perhaps never been more important—or necessary. Confidence is high, and technology is available, but action needs to be commensurate. As COP28 approaches, let’s make sure we use every tool at our disposal for this important work.