Sustainable IT Stakeholders

Balancing the needs of many

Get excited! We’re going to kick off the new year with a 10-second lesson in business theory. Stakeholder theory is the idea that a business is successful when it provides value to all its stakeholders, which are defined as “any group or individual who is affected by or can affect the achievement of an organization’s objectives”. For all you MBAs in the room cringing at my oversimplification, you’ve probably traditionally defined stakeholders as investors, suppliers, customers, employees, communities, and governance or regulatory bodies. Value means something different to each of these groups and is often in competition with each other.

When we consider environmental sustainability and climate change, stakeholders can become harder to define. Is the environment another stakeholder? In his delightfully-named 1995 paper, Should trees have managerial standing? Toward stakeholder status for non-human nature, Mark Starik argues that the natural environment meets the stakeholder definition of “influencing or being influenced by” a business. Others consider whether a stakeholder must have agency, and that environmental issues are already captured in traditional stakeholders such as community and governance. While I personally find this debate interesting and have my own opinions (team trees!), either way, environmental issues must be considered in stakeholder management.

The concept of stakeholder is interesting from a CIO perspective as well. As you dive down deeper into functional organizations like IT, stakeholder theory still stands even as the stakeholders themselves change. IT organizations too have:

• Investors — CEO and CFO
• Customers — IT users, business executives, and process owner
• Suppliers — Software providers, OEMs, and internal client zero partnerships
• Governance — Corporate governing bodies like CISO, legal, and financial reporting teams
• Employees — Teams within the CIO
• Communities — Internal and external partners and peers

Where does environment land as an IT stakeholder? I would argue it depends on the organizational maturity of a company’s sustainability strategy. Harvard Business Review conducted a recent study of corporate social responsibility (CSR) programs, including sustainability and environmental management, across several large companies. The authors report that in early stages, a strong centralized organization and budget is key to building a unified CSR strategy and creating the processes required to execute it. However, as the program grows and matures, while the goals remain centralized, process ownership as well as budget shift to the functional units most equipped to execute them. This means that for CIOs of companies just kicking off their sustainability strategy, the CSR or Chief Sustainability Office may initially be a significant and central stakeholder for environmental issues. Once the strategy matures, IT organizations assume greater responsibility and autonomy and embed more of this work into the value they are delivering to their stakeholders.

As an example, let’s say the CSO sets a corporate GHG net zero target for 2040. The CIO will need to figure out how to meet emission targets for its own organization to deliver value to one stakeholder — the CSO — while balancing the needs of their other stakeholders, such as overall employee IT experience. This will require establishing processes to track, manage, and report IT-related GHG emissions (see my last post for more on this). However, as the sustainability strategy grows and process ownership moves from CSO to functional units, CIOs will also need to help connect the dots between different stakeholders and functional groups faced with new sustainability challenges. This can include delivering value to employee stakeholders by improving engagement, recruitment, and retention, which are strongly influenced by perception of corporate sustainability. Another is delivering IT tools to corporate real estate client stakeholders to track and manage building energy consumption. And a final example is reporting data to corporate CSR and regulatory teams for auditing and regulatory compliance.

Check out the table below for other potential stakeholders for IT sustainability and how each defines value — be sure to let me know if I missed any! Now that we’ve laid the groundwork for how sustainable IT fits into overall corporate strategy, next time I’ll start diving into the specifics of how it gets done.

Stacey Gifford, Ph.D. is CIO Sustainability Lead at IBM based in New York. This article is personal and does not necessarily represent IBM’s positions, strategies, or opinions.