The sustainability technology market is actively developing in a variety of use cases (from ESG reporting to natural capital, sustainable manufacturing, smart energy grids, green IT and circular economy).
But for CIOs navigating this rapidly changing world, the ability to distinguish true environmental performance from carefully chosen averages, aggregates and complex calculations has become a critical competency… and one that can determine whether your organization becomes a recognized leader in sustainability or an unwitting accomplice to greenwashing.
Beware of green IT with dirty secrets
One of the biggest red flags when considering the sustainability of software and IT services is that vendors are touting the benefits of their artificial intelligence (AI) offerings while remaining noticeably silent about the environmental impact of the resource-intensive data centers powering them.
Even if the supplier may invoke corporate level obligations (say, for purchasing renewable energy or offsetting emissions), if they are unable or unwilling to provide granular visibility into impacts at the individual workload level, then this should be a cause for concern.
Global averages that smooth out peaks and valleys or rely heavily on compensation to hide true consumption can mask the unpleasant truth about how green your the use of their services (in your region, at the time you use them) actually is.
The environmental impact of AI becomes particularly relevant when considering its application in sustainable development scenarios. Discussions at COP29 highlighted “The Paradox of Sustainable AI” – the fact that the very AI systems used to solve climate problems are themselves energy and water intensive – making it critical that any sustainable solution using AI demonstrates clear net environmental benefits.
A lack of clear statements (taking into account the environmental costs of training models, as well as specific operational use models – where and when workloads are executed, etc.) can mask the dirty secret of a potentially green solution.
Technology consumers face inevitable trade-offs as they try to balance sustainability, cost and performance, but without hard data to base tough choices on, decision makers will be operating in the dark.
Insist on seeing actual power consumption figures for any cloud solutions. The most innovative suppliers are not only switching to renewable energy sources, but doing so transparently. Vague claims about creating a “carbon neutral cloud” without specific, verifiable metrics should be viewed with suspicion.
Additionally, be wary of sustainability statements that focus solely on future commitments rather than current achievements, especially if time frames continue to change. For example, have the 2030 commitments recently evolved into similar-sounding 2035 commitments?
While science-based targets and commitments for net-zero emissions by 2050 may seem impressive, they mean little without transparent reporting of baseline levels, current emissions, specific reduction milestones and regular updates on progress.
Finally, if a company seems to be overly reliant on carbon credits (especially if they are not in a sector that is particularly difficult to reduce, such as heavy industry), ask whether they should have made more of an effort to reduce their own carbon footprint before resorting to paying others to offset their impact.
This is especially true after COP29 Carbon Trading Agreementswhere – despite cross-country trading mechanisms finally being established after a decade of negotiations – concerns remain over the quality of credit.
Consider what's important, not just what's easy
Everyone (eventually) falls into Scope 3. Before smaller – still out-of-scope – organizations find themselves directly involved in the expanding reach of environmental reporting legislation, they are more likely to find themselves in another network… the network of partner or sponsor Scope 3 (indirect) carbon reporting.
In today's ecosystem-based world, every company is connected to many other companies up and down the value chain for a variety of reasons, and carbon disclosure responsibility has now joined that list of touchpoints. Vendors who claim they can't provide this data are either lagging behind or potentially hiding something.
However, even if you are able to obtain this information, beware of over-reliance on industry averages (rather than on factual, accurate and attributable data) and on proprietary certifications and badges that are not industry-wide recognized.
Platform-specific certifications (or benchmarking schemes designed to focus on the efforts of the “product community”) can obscure the true picture of consumption and emissions, when what really matters is adherence to internationally recognized standards (such as ISO 14068, which replaces the BSI 2060 scheme).
If the supplier's primary evidence consists of self-assessment rather than authoritative third-party verification, proceed with caution.
Despite the expected reduction in regulation, the EU Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) represent a good start.
Even after Brexit, the CSRD is relevant because it covers UK subsidiaries of EU parent companies and UK companies with significant activities in the EU. In addition, many UK firms are voluntarily adopting it to remain competitive when entering into contracts with the EU.
Delays and reforms to the CSRD may provide some breathing space for UK companies, but this is no excuse for complacency. Suppliers that cannot demonstrate the ability to comply with these and other new requirements likely do not have strong sustainability management at their core, limiting their ability to effectively respond and report their carbon footprint, whatever is ultimately required of them.
There is also now additional framework pressure on tech companies to transparently report and reduce their own emissions in line with the COP29 Green Digital Action Declaration (signed by 90 governments and 1,000 cross-sector stakeholders).
CIOs should specifically ask suppliers about their compliance with the Declaration and whether they are contributing to increasing their country's Nationally Determined Contributions. The UK's previous commitment (made just before COP29) to cut emissions by “at least 81%” below 1990 levels by 2035 will be minimized through procurement requirements, making supplier sustainability certifications increasingly important for public sector contracts (especially given the government's emphasis on “Make The UK is a clean energy superpower, enshrined in its revised social value model).
Also, look for evidence of an integrated (and “owned”) approach to sustainability, rather than just a collection of disparate initiatives.
TechMarketView's Sustainability Technology Activity Index The study, which analyzed more than 2,000 technology providers and users around the world, shows that leading providers are building sustainability into their offerings rather than maintaining separate systems.
The Index also found that they provide clients with the means to use sustainability data for broader business decision-making and operational control (beyond core sustainability concerns).
If a company's sustainability team appears disconnected from core product development and operations, its influence (and the company's commitment) may be superficial. Sustainability should be a business issue – for them and for you.
Disadvantages and shortcuts to sustainable development
There is something of a skills crisis at the intersection of sustainability, business and technology. The unfortunate truth is that many organizations lack the internal expertise to even properly evaluate third-party sustainability claims, let alone define what sustainability means. to your business.
Given the shortage of talent that combines environmental expertise, business context and technical capabilities, companies should create cross-functional teams to evaluate incoming proposals.
However, look beyond just IT and procurement (and sustainability if you have access to them) and look to finance teams for their understanding of ROI models; operations, with their understanding of the realities of implementation; and business strategists, for general context.
These combined teams can provide the subject matter expertise needed to identify greenwashing that may elude unsupported generalists—especially when combined with the use of formal assessment systems that focus on third-party verified emissions data, adherence to recognized standards, and evidence of year-on-year improvements; and that verifiable achievements in the present are more important than future promises.
Of course, not every company has this breadth of expertise – even spread across multiple roles and role holders – and in such circumstances, IT services firms are ideally placed to step in and fill the gaps.
According to the Index, professional services are involved in 34.9% of global sustainability technology activities (in the UK this figure rises to 38.4%), highlighting that initiatives are still largely consultation-based rather than being rapidly adopted into organizations.
However, over-reliance on external expertise risks businesses failing to truly embrace and understand sustainability thinking (and develop anti-greenwashing antennae) for themselves – instead sustainability will remain more of a priority consideration, risking being cut off when consulting budgets are reallocated.
Moving Forward
The stakes are higher than just compliance. Unsubstantiated sustainability claims risk not only reputational damage, but also potential legal and financial consequences as greenwashing regulations tighten. CIOs who fail to implement rigorous audit processes risk allowing their organizations to become complicit in environmental deception (and lose control of their net zero history).
Companies should start by reviewing their current technology partners against clear sustainability criteria; Make third-party verified sustainability metrics a requirement for new procurement; and start building internal competencies through training, hiring, and strategic partnerships—but don't wait until you have the perfect team in place before you take action.
By combining healthy skepticism with systematic testing, CIOs can ensure they are working with real sustainability leaders rather than seasoned storytellers. In a market where environmental considerations can transform any industry, being able to discern substance from propaganda is more than just good management. This is business critical.
