6th October 2023, Sydney, Australia –  After distilling the responses of 1,022 Australia’s technology, data and people leaders that represent organisations responsible for 52% of Australia’s GDP, Australian technology research and advisory organisation, ADAPT, has released The Urgency of Sustainability for Australian Organisations, a research piece to help these leaders frame and drive strategic change for greater Environmental, Social and Governance (ESG) performance.

Mr. Shane Hill, Principal Research Analyst at ADAPT, says superior ESG performance has matured from a “nice to have” to a competitive differentiator. He says that given the fast-growing costs and evolving regulatory standards associated with emitting carbon, the economic case for environmental action is compelling:

“Regulations for sustainability are now in force for parts of the economy and coming fast to others,” says Hill.

“However, CIOs can use proven technologies (like Internet of Things [IoT], Digital Twins and predictive analytics) to effectively measure their environmental impact and capture new value from these investments.”

In Hill’s view: “Taking this approach can build engagement with environmentally-conscious clients and partners, meet the demands of international investors and better align the organisation’s ESG activity with government incentives. By acting now, organisations can access incentives announced in the 2023-24 Federal Budget and avoid the significant costs of inaction”.

 

Progress in carbon benchmarking “encouraging”: Analyst

When asked in May 2022 if they benchmarked the carbon footprint of IT, just 42% of survey respondents said they were doing so; when asked again in August 2023, this had risen to 55% of respondents. Shane Hill, ADAPT’s lead analyst for “practical ESG”, is encouraged by this evolution of carbon benchmarking:

“Given the commercial and environmental benefits on offer, CIOs are turning to proven technologies to deliver the reliable insights that their risk and compliance stakeholders require. These CIOs are now able to realise new operational, risk and reporting value from their existing investments.”

Specifically, In May 2022, just four per cent of organisations were building custom dashboards to benchmark the carbon footprint of IT, while only 12% were benchmarking the carbon output of their in-house and cloud environments. However in August 2023, a full 18% of IT departments are building custom dashboards and 27% are benchmarking the carbon footprint of both in-house and cloud environments.

“Leading organisations have both improved their scope for benchmarking and take a ‘collective’ approach to these changes, both internal and external to the organisation. Real change is happening where CIOs and other organisational leaders align on the strategic, commercial and operational changes required,” says Hill.

Based on ADAPT’s research, Hill sees new and existing technologies as playing a role in this transition, with people-based changes needing to keep pace.

“Technology investments include software-defined capabilities to route secure, renewable power to where it is needed alongside cloud migration to generate reliable insights and further reduce energy consumption,” says Hill.

“On the people side, we have a great opportunity to engineer this future. New skills and mindsets will help to facilitate the renewables transition and to uncover and act on insights.”

He adds further: “On the external front, organisations that work with others in their local ecosystem attack these problems together. They see value in new business and ecosystem models, recognising the transitional costs need not be borne alone, nor all at once. A couple of examples include offering new, trusted data products, or the commercial and export value of the judicious use of our boundless renewables.”

 

Link between visibility through value chain and modernisation established

ADAPT’s research also revealed that Australian organisations with a strong focus on sustainability during the modernisation journey enjoyed far greater end-to-end visibility across their value chains than those that did not. Just 15% of respondents with a weak focus on sustainability were able to report a high level of visibility across their value chain, compared to 63% of respondents with a strong focus on sustainability.

ADAPT’s Analyst believes better insights can inform not just ESG initiatives – greater operational visibility can also result. However, Hill sees some fundamental challenges are still in the way of delivering credible reporting:

“An inconsistent data culture and difficulties unlocking data silos are still preventing simple, intuitive access to these insights. In order to simplify compliant change, organisations need to bring together their data, digital and people strategies, to access the right insights and make sure these strategies build on each other.”

Media Contact media@adapt.com.au