Author’s Note: In December 2008, my colleague Terrence Clark wrote an overview on the topic of Green Governance. In the nearly nine years since this time there have been many developments on this topic, and a renewed interest in the subject. We at CA would like to readdress the subject and provide an update to what Green Governance means to businesses, and how organizations are tackling it.
To review, Green Governance is a systemic approach to incorporating environmental considerations into all levels of operations and product stages. From overall business strategy to product conception and execution, consideration to environmental impacts, risks and opportunities are considered.
Green Governance is a field that has changed dynamically over the past decade. There have been many additional names to the concept, including “Sustainability,” “Environmental Responsibility,” “Corporate (Social) Responsibility” and “Corporate Citizenship.” Ultimately the concept of being a good corporate citizen via environmental and social considerations has not changed. What has changed is the structure around how companies report on this, the ubiquity with which companies incorporate this into their mindset, and the innovative ways that businesses are approaching their operations.
Additionally, the environment and social concerns have become linked. Historically social and environmental considerations have been separate issues, but as time goes on these go hand-in-hand with each other and business operations. Companies and investors now refer to these topics as ESG (Environmental, Social and Governance) as a whole. Innovative and future-minded businesses integrate this concept at all levels, subscribing to a triple bottom line mentality. This approach to business, in short, approaches value in the form of environmental value and social value, in addition to financial value.
What role does technology play in enabling the E part of ESG? We at CA have harnessed technology and efficiency measures to reduce our carbon footprint by over 36% since 2006. The opportunities to harness technology are as varied as the technologies themselves (and then some!), but a few notable highlights are:
1. Improved efficiency by moving to hosted services
In environmental reporting, there are three scopes of carbon emissions. Scope 1 involves direct emissions such as burning of fuels for heating and transportation, or refrigerant use for cooling. Scope 2 involves emissions based on electricity use and other indirect emissions. Scope 3 is all other indirect emissions, such as those in a supply chain, waste, or travel through third parties (e.g. airlines, railways).
Companies that host their own datacenters and technology infrastructure encounter emissions in all three scopes – at minimum involving cooling, electricity, and supply/waste chain. Some organizations are reducing their carbon footprint to moving away from on-premises data centers and to SaaS offerings and third-party co-located datacenters.
Utilizing SaaS products such as those that CA offers allow for businesses to minimize their IT footprint. A move from in-house to co-located datacenter achieves the same. These actions lead to reduced emissions in a business’s Scopes 1 and 2 and increase in Scope 3 – because the service is now in the supply chain instead of in-house. However, the increase in Scope 3 is minimized due to the devoted resources of SaaS and co-location providers. These providers frequently have resources devoted to maximizing efficiencies as part of their business operations, and minimize unused IT overhead.
2. The Internet of Things
In the past decade we have seen the boom of the application economy. The capabilities of smart sensors and inter-connected technology have opened an entire new realm of business opportunity to minimize environmental impact while maximizing efficiency. This has led to the rise of home automation technology, and the roll-out of smart cities. Businesses are seizing the opportunity to develop applications and create innovative hardware to save consumers money, improve user experience, and reduce environmental impacts.
3. Harnessing blockchain
We at CA have discussed Blockchain before, and its opportunity to business via enabling innovation and security. Within a framework of ESG, the blockchain presents an opportunity to improve supply chain transparency and increase energy efficiency. The energy sector is taking a keen interest in the technology, seeing in the blockchain an opportunity for smart and automated distributed generation and storage. It also opens an opportunity for direct monitoring of many small renewable energy projects – like rooftop solar – and real-time trading of renewable energy credits. Other sectors are taking an interest in blockchain as an opportunity to make their supply chain more transparent and socially and environmentally sustainable.
Ultimately the ongoing business commitment to ESG creates innovation opportunities and aligns business with public interest. We’re excited to see what impact current and future technology has on this practice.