The valuable role of CEOs in leading sustainable change

Technology plays a key role in helping businesses tackle climate change. As AI and quantum computing grow, energy use becomes a bigger issue.

The information and communications technology sector is now responsible for four percent of global carbon emissions, and this could rise to 14–20 percent by 2040. CEOs must address this by enforcing strong data governance and clear AI usage guidelines, similar to early internet rules on data storage.

It’s vital to act on current sustainability efforts without letting future AI energy concerns stall progress. It’s about deploying technology smartly and balancing innovation with sustainability.

Reducing scope emissions while driving commercial growth is a major challenge for business leaders. Achieving this balance is complex; however, sustainability needs to remain a priority.

Four pillars of sustainability for businesses

As part of its commitment to playing a role, Logicalis is aiming to become a net zero carbon organization by 2050. Its global operations have already achieved a 27 percent reduction in Scope 1 (direct greenhouse) emissions and a 17 percent reduction in Scope 2 (market-based) emissions in the second quarter of the 2024 financial year.

The business case for sustainability rests on four pillars every CEO should consider:

1. Employees

Today’s workforce, especially Gen Z, looks for employers whose values align with theirs. A strong sustainability stance can motivate employees and attract talent. Employees will also back the organization and brand if they believe it’s helping to make a difference.

2. Customers

Customer preference is similarly values-based. Modern consumers make purchasing decisions based on shared values, particularly genuine commitments to sustainability.

3. Stakeholders

Organizations with strong ESG commitments backed by genuine action rather than so-called greenwashing deliver better financial performance and attract more investment.

4. Regulations

Governments worldwide are implementing stricter carbon footprint reporting requirements. By 2030, carbon-based taxation is likely to become a reality, making proactive sustainability measures environmentally responsible and financially prudent.

This makes it important for organizations to have a strong value statement that they actively live up to, which happens to be both good morally and good for the future of the business in general.

Implementing sustainable practices

With such clear benefits, what’s holding CEOs back from committing to sustainable practices?

A common misconception is that sustainability initiatives involve higher costs. In reality, sustainable choices lead to long-term savings. Extending the lifespan of existing assets while ensuring efficiency can reduce capital expenditure and minimize environmental impact.

Understanding the full impact of technology choices is crucial. Extending the life cycles of laptops, routers and other equipment can deliver significant environmental and financial benefits, as every new device has an embedded carbon cost from manufacturing.

Maximizing the use of each device saves on capital expenses and reduces waste and environmental impact.

Small but powerful steps

CEOs can take a few simple yet powerful steps to begin this journey. First, deploy tools to accurately measure the organization’s current carbon footprint. This foundation is essential to set meaningful reduction targets.

Second, leadership teams must understand key sustainability concepts and terminology for informed decision-making and effective stakeholder communication. CEOs should also consider incorporating sustainability KPIs into bonus structures. When financial rewards are tied to environmental goals, action typically follows swiftly.

Finally, collaborate with sustainability focused partners who have the experience and certifications to support the organization’s environmental initiatives. Look for partners who have demonstrated their commitment through certifications, awards and concrete actions.

Embracing sustainability is an essential leadership responsibility that strengthens business resilience and societal impact. CEOs can inspire a legacy of innovation that drives environmental stewardship and sustained growth for future generations by making intentional, measurable changes now.

Opinions expressed by The CEO Magazine contributors are their own.