4 reasons IT leaders should champion sustainability

Adopting sustainable practices isn’t just good for the environment; it’s also smart business. Here’s why
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I’m a member of the Climate Change Community of Practice at Red Hat. This Community of Practice is an associate-led internal community to support the development and implementation of sustainability targets and initiatives, both operationally and across core business activities. We aim to connect passionate associates around the challenges humans are facing as a result of climate change.

Managing our carbon footprint is Red Hat’s responsibility to the planet. In addition to fulfilling this responsibility, what do enterprises stand to gain from embracing more sustainable practices?

1. Attract and retain talent

Would you accept a lower salary to work at a company that has a strong commitment to environmental responsibility? Fast Company reported on a survey of 1,000 employees at large U.S. companies. The result: Nearly half of all respondents – and three-quarters of millennial respondents – said they would take the pay cut.

The numbers aren’t just hypothetical. Fast Company also cited research in which 40 percent of millennials said that they’ve accepted one company’s job offer over another because the chosen firm demonstrated a deeper commitment to sustainability. Since millennials are projected to comprise 75 percent of the global workforce by 2025, companies can’t afford to ignore the push for employer sustainability, especially amid The Great Resignation.

[ Also read The new normal: 3 trends that are changing how we work. ]

The need for a sustainability agenda is relevant for not only attracting employees but also retaining them. Engaged employees stay. Research from Deloitte shows that “mission-driven” companies report 40% higher levels of talent retention. Red Hat’s mission revolves around creating better technology the open source way. The term “better” can mean different things, but for many, “more sustainable” is likely one of the first qualifiers that come to mind.

2. Save money by improving energy efficiency

It’s long been known that energy efficiency saves households money. Similar logic could apply to enterprises with offices worldwide and clients in the energy sector. ENERGY STAR notes that more energy-efficient buildings save money annually as compared to typical buildings:

  • $0.60 USD per square foot on operations and maintenance
  • $0.50 USD per square foot on janitorial needs
  • $0.53 USD per square foot on utilities

Red Hat Tower in Raleigh, North Carolina, has had the U.S. Green Council’s LEED Gold Certification as of 2014. The most widely used green building rating system globally, the LEED rating system awards certifications based on criteria addressing carbon, energy, water, transportation, and other factors related to climate mitigation.

3. Save money by reducing waste

Another way to both support sustainability and save money is by reducing the amount of waste that a company produces. This positive correlation may seem intuitive, but for those seeking hard evidence, we can again look internally.

One of Red Hat’s IT support teams analyzed the printing and email process for customer transactions and introduced a system redesign that optimized resource usage; saved time, money, and manual effort; and reduced our company’s environmental impact. By routing tens of thousands of customer transactions annually to a shared internal Red Hat email (rather than a local printer), the green initiative reduced printer processing by 80 percent and, by effect, saved $15,709 on cartridges and 576 labor hours per year.

What other ways could we save money while improving resource efficiency? The possible benefits are quantifiable and worth exploring further.

4. Strengthen relationships with investors and other stakeholders

We’ve now established that having a clear sustainability agenda matters for companies internally. What about the external, public-facing level?

Whether you call it environmental, social, and governance (ESG) investing; socially responsible investing (SRI); or impact investing, the incentive for companies to prove to investors that they care about the planet is growing.

The Motley Fool defines ESG investing as a form of investing “that prioritizes financial returns alongside a company’s impact on the environment, its stakeholders, and the planet.” The “E” in ESG includes (but is not limited to) a company’s relationship with climate change policies, carbon footprint, renewable energy usage, and green technologies.

[ Related read: 6 ways CIOs can drive change through ESG ]

Interest in ESG-focused funds has grown significantly over the past several years. The COVID-19 pandemic accelerated the trend by pushing investors to increase their portfolio’s resilience in response to market disruption. In the first three months of 2020, $45.6 billion USD was invested in ESG-focused funds. In 2021, roughly $120 billion USD flowed into these funds. Companies with a strong ESG performance are the preferred choice to many investors.

Businesses are catching on: 92 percent of S&P 500 companies published sustainability reports in 2020, and 60 percent of Fortune 500 companies have set climate-related goals as of the third quarter of 2021.

Looking to strengthen relationships with investors and other stakeholders? Consider the role that corporate sustainability plays in shaping the perception of a brand.

When enterprises make a concerted effort to champion sustainability, everyone wins: employees/employers, investors, and our planet. Businesses’ case for establishing, strengthening, and sharing their sustainability stories is multidimensional: attracting and retaining talent, saving money, and strengthening relationships with investors and other stakeholders.

[ Check out essential career advice from 37 award-winning CIOs! Get a variety of insights on leadership, strategy, and career development from IT executives at Mayo Clinic, Dow, Aflac, Liberty Mutual, Nordstrom, and more: Ebook: 37 award-winning CIOs share essential IT career advice. ]

Sara Holley is a Digital Lifecycle Specialist at Red Hat, building and optimizing marketing campaigns to promote Red Hat’s enterprise open source technologies to organizations around the world. She strives to deliver the right message to the right people at the right time.