Feature
A major transformation is taking place in digital workplace management, and it's got nothing to do with generative AI.
Earlier this year, Gartner found 80% of digital workplace leaders stating they planned to integrate their tools with environmental, social and governance (ESG) systems for management and reporting by 2027, up from the less than 5% who do so today.
"Even in the face of economic headwinds, environmental concerns remain at the forefront for top executives. However, current DW tools offer limited sustainability insights, typically focusing on device energy consumption, which comprises only a small fraction of overall digital workplace emissions," Gartner VP Analyst Stuart Downes said in the March statement.
The responsibility will fall on IT teams to develop digital solutions that enhance organizational sustainability while also meeting increasingly strict reporting requirements, Downes continued, which will require the standardization and centralization of sustainability data within these platforms.
ESG Is Essential in the Modern Workplace
The integration of ESG into digital workplace tools is not only feasible, but essential, said Riccardo Ocleppo, founder and CEO of the Open Institute of Technology.
“We're observing an intense shift towards socially conscious strategies across all sectors, and technology is no exception,” he said.
He added that the integration of ESG principles into business operations is becoming increasingly important, driven by the need for companies to align their practices with broader societal values and expectations.
Technology firms, which play a pivotal role in shaping modern life, have an even greater imperative to lead by example in this domain, Ocleppo noted. “Their influence extends far beyond their immediate operations, making their commitment to ESG principles particularly impactful.”
Implementing ESG strategies effectively requires a gradual, methodical approach, he said. Organizations often find success by starting with targeted pilot programs or focusing on specific areas of their business. This allows for valuable learning experiences and the opportunity to refine strategies before expanding to larger-scale implementations.
“At OPIT, we have adopted this incremental approach. Our initial focus has been on incorporating ESG principles into our e-learning program development,” he added. "This serves as a starting point from which we plan to extend ESG integration across other facets of our operations."
This measured strategy enables companies to build a solid foundation for sustainable practices, learn from early experiences and create a more comprehensive and effective ESG framework over time.
Related Article: Is It Time to Evaluate Your Environmental, Social and Governance Policy?
One Area Ripe for an Upgrade: Data Management Systems
According to the Green Software Foundation, data centers that run data management systems account for about 4% to 5% of global CO2 emissions every year, Greg Rivera, vice president at CAST noted. That is roughly equivalent of the air, rail and shipping industries combined.
The other interesting finding in the report Rivera highlights is roughly 85% of those data center emissions is attributable to how those systems are designed, like the software engineering of those systems, not just the hardware or the infrastructure they're running on.
“There's a huge opportunity to make data management more sustainable by basically engineering the software applications that they're running inside to be more efficient and use fewer resources,” he said. “In addition, it’s just the right thing to do for the planet, it just so happens that making these software systems greener or more sustainable also typically means they're going to perform better, cost less to operate, and be more resilient.”
Better run data management systems create a number of business benefits as a result. Sustainable data management is about designing or changing the software applications that manage data to be more efficient, use less power, and ultimately emit less carbon into the environment, Rivera explained.
CAST is starting to see organizations integrate software intelligence into their software development processes to identify opportunities to make their software greener and more efficient, he added.
The earliest adopters are coming primarily from banking and financial services. "It makes sense because those industries have a heavy reliance on software and data, but they're also very focused on financial ROI, obviously," he said. "And they are seeing benefits there as well. So, in addition to improving the green impact, they are also seeing those performance and cost benefits as well. That is what we are seeing out there from that software perspective.”
Related Article: The Green Potential of Remote Work: Reality vs. Myth
Market Pressures Make ESG Essential, Not Optional
DevSquad founder and CEO Philip Alves notes three factors adding a sense of urgency to improve ESG integration, namely:
1. Regulatory Pressure
The push towards ESG integration isn't a fad, he said. Regulatory changes and growing market demand are driving it. Companies are increasingly held accountable for their environmental and social impact, making ESG compliance a business imperative. “As regulations tighten, the need for robust ESG reporting tools will only grow, forcing digital workplace leaders to integrate these systems sooner rather than later,” he said.
2. Technological Advancements
The significant evolution of the technology landscape has made it easier and more cost-effective to integrate ESG tools with existing digital workplace platforms, he continued. Cloud-based solutions, APIs and AI-driven analytics tools are becoming more accessible, allowing companies to implement ESG tracking and reporting without the need for ground-up system overhauls. “Companies that leverage these advancements can achieve rapid integration with minimal disruption,” Alves said.
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3. Employee and Investor Expectations
Both employees and investors are placing increasing importance on a company’s ESG commitments. Workers are more inclined to join and stay with companies that demonstrate a genuine commitment to sustainability and social responsibility. And investors are scrutinizing ESG metrics as part of their decision-making process, he said. Integrating ESG tools into digital workplace systems will enable companies to meet these expectations, attract top talent and secure investment.
“While the initial investment in integrating ESG tools might seem substantial, the long-term benefits are significant,” he said. “Companies that successfully integrate ESG into their digital workplace will not only mitigate risks associated with non-compliance but will also unlock new opportunities for innovation and market differentiation.”
Integration will allow organizations to streamline operations, reduce costs and enhance their reputation in the eyes of consumers, investors and regulatory bodies, Alves concluded.
Related Article: Building a Sustainable Future on the Backbone of Technology
ESG Has a Branding Issue
The 2027 deadline is ambitious, but likely unrealistic, said Liquid Web's Andy Bisonette. He said most companies are woefully unprepared for the financial and technological shift involved.
ESG tools remain unrecognized among today’s companies, with less than 5% actively using such solutions, according to Gartner. The majority still struggle to enhance their existing digital workplace tools, let alone the complex technologies and platforms needed for ESG.
Bisonette pointed to what's basically a branding issue with ESG tools, in that they're seen more as compliance needs rather than revenue drivers. This perception has kept big investments at bay, with the result that executives focused on earnings and quarterly returns are unwilling to make the multiyear commitments ESG integration requires. This short-term orientation could slow down progress unless there is a clear ‘win-win’ financial rationale.
“The 2027 goal will force corporations into action, although the required changes might evolve gradually since numerous players continue to anticipate clearer ROI signs before committing to transformative investments," Bisonette concluded.