Leading CIOs have long since extended their focus beyond CIO 1.0, a generation of CIOs that focused on keeping the IT lights on. As a movement of business leaders with a technology focus, CIO 2.0 was a major contributor to the improved alignment of IT with business. Next was CIO 3.0, which focused on digital transformation for sustainable competitive advantage.
For a small subset of those leading CIOs though, there is much more at stake than business success; at stake is the sustainability of IT in the context of IT’s increasing requirements for materials and energy. Meet CIO 4.0! Armed with legacy skills and experiences from CIO 1.0, CIO 2.0, and CIO 3.0, the focus of CIO 4.0 is helping to ensure that corporate IT is sustainable, and that IT is aligned with the organization’s broader sustainability goals. For CGEITs, yes, strategic alignment remains relevant as a key pillar of the enterprise governance of IT for CIO 4.0.
From a sustainability perspective, IT contributes to the pollution (externalities in the language of economists) of land, sea and air. The typical IT atmospheric (air) externality takes the form of the emissions energy generators create while producing the electricity that powers IT. A typical water externality is the enormous amounts of clean water semiconductor factories need, while a typical land externality is the enormous and growing problem of the dumping of old and redundant IT, constituting a toxic waste issue no previous generation has needed to address before.
Large Canadian bank, Scotiabank, like many other organizations around the world, recently set itself an emissions reduction target of 40% less by 2030 compared to its 2016 base. It is beyond the scope of this blog post why organizations only post carbon emissions targets, recognizing that methane and nitrous oxide are other greenhouse gas (GHG) emissions. It is also beyond the scope why land and water externalities are excluded.
This said, to reach these targets, the Royal Bank of Canada Climate Action Institute finds that C-suite buy-in and embedding climate into KPIs are critical success factors for driving emissions reduction. As a C-suite representative, CIO 4.0 needs to determine the fraction of those targets that can be attributed to the CIO as KPIs, as part of the overall CIO accountability to have IT aligned with the goals of the organization.
In general, IT as a whole used about 4% of the world’s electricity in 2020, and contributes about 4% of global GHG emissions. The latter figure can be used as the basis of a KPI by CIO 4.0 to determine its part in an organization’s emission reduction targets.
Next for CIO 4.0 is to determine the source of the relevant emissions. The GHG Protocol Corporate Standard sees an organization’s emissions in three contexts. The widest scope is Scope 3, which takes a lifecycle approach covering all upstream and downstream emissions along the organization’s value chain. The middle scope is Scope 2, which entails indirect emissions from the generation of purchased energy. Scope 1 emissions are the narrowest, concerning direct emissions incurred by an organization’s assets such as cars, trucks and generators.
Note that Scotiabank, as the example here, only set Scope 1 and Scope 2 goals, so CIO 4.0 would take about 4% of those targets as the responsibility of IT to resolve. While 4% is a small fraction right now, the challenge is that IT energy use is increasing dramatically given the greater distribution of a wide variety of information devices and technologies. Data centers, AI and cryptocurrency mining are significant drivers of new energy demand that could see IT energy consumption increasing significantly by 2030 and beyond.
So, what can CIO 4.0 do about Scope 1 and Scope 2 emissions?
- Scope 1 carbon emissions are directly controllable and can be reduced by seeking out the highest efficiency cars, trucks, vans and emergency generators; all the assets that generate emissions on behalf of corporate IT. The emissions reduction is relatively easily measured and results in real emissions reductions.
- Scope 2 carbon emissions are indirect and are a function of the external energy requirements of the IT organization. Reducing these energy requirements demands energy efficient IT infrastructure, platforms and devices. The GHG protocol provides guidance for calculating Scope 2 emissions. The critique here is that while IT energy consumption may reduce for an organization, it’s not to say that actual carbon emissions will be reduced.
By demonstrating reductions in Scope 1 and Scope 2 emissions, CIO 4.0 can demonstrate continued alignment with the goals of the organization while helping to ensure the sustainability of the organization’s IT ecosystem.
As far as IT energy efficiency is concerned, the topic of Green IT is highly relevant today. Green IT emphasizes sustainability and offers CIO 4.0 options not only in the reduction of Scope 2 emissions, but also in terms of a lower environmental impact on land and in water. Read more about the potential of green IT in my recent ISACA Journal article, “Green IT and Environmental Economics Through an IT Governance Lens.”
In conclusion, the evolution to CIO 4.0 presents IT leaders with an opportunity to integrate sustainability into the core of IT operations, thereby reinforcing IT’s role under CIO 3.0 as a catalyst for competitive advantage. Although challenges like the practical nature of Scope 2 emissions reductions remain, CIO 4.0 is forward-looking and continues the strong tradition of innovative and value-adding corporate IT leadership. CIO 4.0 ensures that IT remains a driver of competitive advantage while actively contributing to the protection of our planet for future generations.
