Sustainable Digital Services and CSRD: The Power of Data and the Responsibility of the IT Organization

The New Era of Responsibility in Europe: CSRD

The Corporate Sustainability Reporting Directive (CSRD) is the European Union's sustainability reporting directive aimed at integrating sustainability reporting into financial reporting. Through CSRD, companies are required to disclose how sustainability issues, such as climate change, affect their business and how their operations impact people and the planet. Reporting will start in phases in 2024.

The advantages of CSRD sustainability reporting include improved transparency and clarity for stakeholders such as investors and consumers, as well as comparability and credibility. There has been much debate about whether EU regulation and reporting are the right tools to regulate responsible corporate procedure. Instead of seeing reporting as just additional work that consumes resources without providing value, companies should ensure that sustainable business development is at the core of their strategy.

"It is crucial to see the new reporting directive as an opportunity to promote the company's agenda. Reporting elevates sustainability issues to the forefront of management and board agendas. Reporting generates a large amount of data that organizations can leverage in their operations.", emphasizes Mia Folkesson, CEO of Impaktly.

Starting in 2024, CSRD reporting obligations will gradually apply to almost all players in the value chain. This means that companies must understand the carbon footprint of their digital services and report on it.

Folkesson describes the opportunities created by reporting as extensive."The discussion about utilizing data is in its early stages. The possibilities created by the data from reporting are excellent. When organizations set goals, measure things, and collect data, they can invest in things that really matter! This is a prerequisite for mitigating sustainability risks, but it also creates enormous opportunities for developing new products, services, and new business. We should talk about this much more than we currently do."

The Carbon Footprint of Digital Services

Although many may not think about it in their daily lives, all digital services have a carbon footprint. The carbon footprint of digital services arises from factors such as data center energy consumption, device manufacturing and usage, code and execution performance, software, and websites. For all entities with digital services, it is crucial to understand the environmental impacts of both their own and third-party digital services. Measuring, analyzing, and optimizing environmental efficiency will be on the agenda.

"A data-driven perspective is crucial for leaders who want to understand and improve the sustainability of their companies. By demanding, collecting, and analyzing data from their digital services, companies can make data-driven decisions, reduce the carbon footprint of services, and develop responsible practices. This not only helps companies meet the reporting obligations of CSRD but also promotes the positive role of companies in sustainable development.", says Ville Nordberg, CEO of Trail Openers Oy.

Green ICT

Green ICT is essential for companies that want to reduce the environmental impact of their digital services. By using sustainable design and software development practices, companies can reduce their carbon footprint and promote a more sustainable future. This approach ensures that technology is utilized in a way that maximizes benefits while minimizing the harm to society and the environment. When creating digital solutions, companies must consider the broader impact of the result.

"Green ICT includes making code and architectural changes and choices that reduce the energy consumption of an application or software. Responsible and careful design and software development are the foundation on which sustainable digital services are built. As industry experts, we have a responsibility to communicate about sustainable alternatives and implement them, because customers cannot yet be expected to be familiar with the subject and specifically request responsible coding.", notes Nordberg.

By adopting responsible software engineering practices, companies can significantly reduce the emissions of digital services, save costs in the software life cycle, and promote a more sustainable future.

Responsibility in Digital Development: A Shared Future

In a world increasingly focused on sustainability, measuring the carbon footprint of digital services is not only beneficial but also essential. CSRD recognizes this by requiring companies to submit detailed reports on their environmental impacts. These reports reveal the true extent of a company's carbon footprint, enabling data-driven decisions for stakeholders and holding companies accountable for their actions.

Folkesson emphasizes the importance of IT in sustainable development."IT plays a key role in enabling changes related to responsibility. The potential for change extends far beyond compliance with formal regulations and is crucial, for example, in enabling new business models."

The power of measurement lies in its ability to drive change.By defining their carbon footprint, companies can set clear development goals. Transparent reporting helps companies gain the trust of stakeholders and investors and strengthens the company's reputation and competitiveness. At its best, responsibility is a significant differentiator for companies.