Digital spend now takes up 35% of sustainability budgets, as businesses leverage IT to achieve environmental goals. The global digital sustainability market is projected to reach $34 billion by 2027, growing about three times faster than the overall technology market. This surge highlights increasing corporate commitment to sustainability, driven by regulatory pressures, rising energy costs and stakeholder expectation.
However, despite these positive trends, we shouldn’t ignore the impact of current technologies in play. Enterprise IT already accounts for 1% of all GHG output, and tech emissions are set to rise to 14% of global totals by 2040. Datacenter expansion and AI investment have seen emissions increase by 150% in three years. Scope 1 and 2 emissions grew by 1.4% since 2024, and gaps remain in Scope 3 reporting. It’s clear that good intentions have not yet translated into tangible reduction of carbon footprints.
To ensure meaningful progress towards net zero targets, businesses must reconcile rising digital demand with environmental responsibilities. Meeting ambitious climate goals will require a systemic transformation of operational strategies. Entrenched behaviors – such as repeating IT procurement practices – hinder progress towards ESG and business goals.
Achieving sustainability targets will require bold changes across the entire technology ecosystem – from IT infrastructure and digital operations to innovation and regulatory alignment.
Making sustainability a business priority
Sustainability is no longer optional; it’s a business imperative driven by environmental, regulatory and market forces. Climate change remains a central issue on the global agenda. While some governments may not prioritize climate initiatives, international frameworks such as the United Nations’ COP, the Kyoto Protocol and the Paris Agreement continue to push organizations for meaningful progress.
On the regulatory front, frameworks such as the European Union’s Corporate Sustainability Reporting Directive (CSRD) are raising the bar. New legislation will require detailed disclosures, including Scope 3 reporting – indirect emissions including those from digital infrastructure and IT supply chains. With technology a significant contributor to Scope 2 and Scope 3 emissions, staying ahead of these compliance mandates is crucial for effective risk management.
But regulation is only part of the picture. Sustainability in IT is increasingly tied to business performance. Organizations with strong ESG practices are outperforming peers in profitability and EBITDA metrics. Ultimately, digital transformation efforts that overlook sustainability are missing a key component for long-term value creation. Sustainable IT is central to competitiveness, growth and resilience.
A sustainable IT journey
Building a sustainable IT strategy goes far beyond adopting energy-efficient hardware or migrating to the cloud to cut Scope 2 emissions. It demands a holistic approach to technology sourcing, management and use across its entire lifecycle. To accelerate ESG priorities, organizations should:
1. Assess datacenter sustainability: Where growing data volumes are hosted has a major environmental impact. With cloud adoption more effective than upgrading on-premise infrastructure, prioritizing datacenters powered by renewables is vital. Businesses should seek facilities with strong Power Usage Effectiveness (PUE) ratings – lower scores (closer to 1.0) indicate greater efficiency.
2. Scrutinize cloud providers: Sustainability performance varies significantly between cloud providers. While major hyperscalers have faced criticism over environmental practices, some smaller providers offer 100% renewable-powered services and employ energy-saving technologies like virtualization, containerization and AI-driven resource optimization. Opting for suppliers with robust sustainability credentials and able to provide accurate Scope 3 data will deliver immediate impact to decarbonizing supply chains.
3. Leverage Infrastructure-as-a-Service (Iaas): Adopting an IaaS model removes the burden of managing on-premise IT, transferring power and emissions responsibility to the provider. IaaS boosts agility and cost efficiency, while reducing IT estate, hardware refreshes, power costs and equipment waste.
4. Optimize end-user devices: End-user hardware accounts for a large share of IT-related emissions and electronic waste. Minimizing device count, extending hardware lifespan and exploring alternatives like Bring Your Own Device policies can reduce environmental impact and operational costs.
5. Enable remote work: IT is a key enabler of remote work, helping reduce emissions from commuting and office infrastructure. Virtual desktop infrastructure allows users to access powerful computing resources securely while significantly lowering energy consumption compared to traditional desktop setups.
Now is the time to step up
The path to business sustainability is well defined – the technologies, frameworks and partners to drive improvements are available. What’s needed now is momentum from organizations to drive meaningful change.
Sustainable IT is more than a reporting checkbox for regulatory compliance; it’s a critical pillar of long-term business success. Forward-thinking leaders are increasingly recognizing that doing ‘just enough’ is a risky strategy, which can result in poor technology investments and leave firms exposed as contexts change and competitors seize an advantage.
Embedding sustainability into corporate agendas is essential for driving growth, strengthening stakeholder confidence and meeting environmental commitments. Leaders should act now and make smarter IT choices to transform their operations for the better. Future success – for their business and the planet – depends on it.
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