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Green Fix
Welcome to the Green Fix, the climate & sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry, how they are impacting your business and your work, so that you can keep your sanity.
Green Fix
S1 E10: Greening Tech: How AI and Digital are changing the Sustainability Landscape with Tim Prosser
The technological revolution transforming Australian businesses carries a hidden environmental cost that few sustainability practitioners fully understand. In this revealing conversation with digital sustainability expert Tim Prosser, we uncover the substantial climate impact of our digital lives and explore how organisations can address this overlooked aspect of their sustainability strategy.
Did you know that 40% of an individual's carbon budget aligned with a 1.5-degree target is consumed by digital services? Or that by 2030, data centres could require 8% of Australia's power grid – equivalent to the entire steel industry? These startling figures highlight why sustainability practitioners must engage deeply with their technology counterparts as mandatory climate reporting approaches.
Tim draws fascinating parallels between the evolution of IT and sustainability functions within organisations. "About 10-15 years ago, there was a real flip where organisations went from having an overall strategy supported by an IT function to being an IT company in a specific sector," he explains. "I see an opportunity for sustainability to go through that transition."
We explore how the AI revolution is complicating sustainability efforts, with major tech companies already reporting missed climate targets due to energy-intensive AI deployments. Yet Tim also reveals the tremendous opportunity: research shows 84% of technology professionals prefer sustainability outcomes over cost-cutting measures, representing an army of potential champions waiting to be engaged.
For sustainability practitioners preparing for mandatory reporting, Tim provides practical guidance on establishing accurate technology emissions baselines, addressing e-waste challenges, and initiating productive collaborations with IT departments. He outlines common pitfalls in emissions calculations and explains how to move beyond spend-based approaches toward more meaningful measurements.
This episode offers essential knowledge for any sustainability professional looking to develop a comprehensive climate strategy that addresses the full environmental impact of their organisation's operations. Listen now to ensure your sustainability roadmap isn't missing this critical piece of the puzzle.
Your Hosts:
Dan Leverington
Loreto Gutierrez
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About 10 or 15 years ago there was a real flip in my experience working in financial services or telco, where organisations went from having an overall strategy supported by an IT function to being an IT company in a specific sector. I see an opportunity for sustainability to go through that transition. We're not there yet because we're still establishing baselines and understanding the starting point at the moment. Many will be surprised with the right reach out to technology teams, with the right sponsorship and support, there will be some real exciting champions and advocates to help you on your journey.
Speaker 2:Welcome to the Green Fix, the climate and sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry and how it impacts your business and your work, so that you can keep your sanity. I'm your host, loretta Gutierrez.
Speaker 3:And I'm Dan Leverington. Today we're in conversation with Tim Prosser, a well-known evangelist for the delivery and deployment of climate technologies. Tim is a specialist in digital sustainability strategy and green operations, with over 20 years experience leading enterprise technology teams in the UK and Australia. His expertise spans complex and critical systems across industries including energy, retail, aerospace, defence, financial services and tertiary education. Today, he focuses on supporting the deployment of climate technologies. He serves as a mentor and community advisory board member at Climate Salad and he led industry engagement at Climate Action Week Sydney in 2024-2025.
Speaker 3:An advocate for digital sustainability, tim is passionate about greening Australia's IT sector. He emphasises the sector's vital role in transition to a low-emissions future, from emissions reporting to transforming technology services. We're thrilled to have you with us for a deep dive into digital sustainability on our 10th episode, tim. So you have traversed quite the journey, from the 90s working on the Typhoon EJ200 engine program for Rolls-Royce in the UK UK to now being one of the top voices in digital sustainability. What is it about the gravitational pull of complex systems that seems to attract you to them?
Speaker 1:Oh, thanks, that's a great introduction, dan. Thank you for that. Really it's an interesting path because my initial career ambitions were in design and architecture. I then took the design creativity aspect of that business and commerce and technology was very much part of that kind of curious mix at the early stage of my career. But you talk about complex system design and analysis. My undergraduate degree was in systems analysis and that's become screamingly relevant to me in the last few years in my application of work in sustainability. But the through line really for me is that understanding the systems integration up and down supply chains. The projects you referenced at Rolls-Royce I was working on were engineering and procurement systems for very collaborative, complex engines that power military fighter jets. I had responsible for some of the systems integration components between the Germans, the Spanish, the Italians and the Brits. I used to walk past the Concorde engines every morning. You know that's a reference point that not many people can say in their career highlights.
Speaker 1:I'm seeing some through lines and some relevance now in that in my digital sustainability work.
Speaker 2:Thanks, tim. Let's talk about digital sustainability. You define digital sustainability as aiming to personalize and localize the conversation around the environmental impact of technology, so do you want to elaborate on what that means and why this approach is important?
Speaker 1:Absolutely. Before I go into the digital sustainability question, it's very important to establish from an individual's consumer point of view what their relationship is with the IT that they consume and what that would generate from an emissions point of view. I find that perspective very useful in helping people understand their relationship with technology and therefore the consequential emissions profile that they're responsible for. So last year, research by Nature revealed that emissions from an individual's use of technology services such as streaming or media, photo, video sharing, email and remote work tools accounts for 40% of a person's carbon budget, aligned with a 1.5 degree target Few. As an individual, have a personal commitment to live a 1.5 aligned life. 40% of that carbon budget is taken up by your digital exhaust. 90% of the data stored today is never accessed after three months after creation. Think about all those photos, those cat videos, those emails. Often, in order to maintain service resilience, data is replicated 10 times. So you may have one item, but there's 10 of them. Over the past two years, your listeners will be very aware that the Australian corporate regulator, the ACCC, has made 47 regulatory interventions to address greenwashing. This gets my attention because I'm trying to apply that regulatory oversight to the technology world, and that included court actions of fines totaling many millions of dollars.
Speaker 1:Australia's geographic isolation, combined with high levels of digital consumption, results in a very significant per GDP digital emission profile, which presents unprecedented demand on energy and water resources. In 2024, australia sourced 43% of its total energy from renewable sources and this is on track to meet 50% within the coming 18 months. I call out energy specifically because technology is a major consumer of technology, which we'll talk about later, I'm sure. Furthermore, e-waste generated by digital consumers and businesses is still largely sent to landfill. I think Australia has one of the lowest recycling rates in the OECD a figure of four or five percent and in Sydney we're hearing that by 2030, landfills will be full. So there's no long-term solution for landfills in Sydney beyond that date. We're missing out significant opportunities for recovery and reuse.
Speaker 1:It's been noted that there's more gold and silver in a ton of iPhones than a ton of ore from a mine. That sounds crazy, but it's factually correct. Listeners to this podcast will be all too familiar that earlier this year, the Australian government mandated businesses beginning disclosing their non-financial climate emissions, which leads to a lot of the work on the subject matter of this podcast series. This phased approach will ultimately require most Australian businesses to report emissions from their technology use. A recent case study from a global financial institution found that 40 to 60 percent of its non-financed operational emissions originated from its IT estate, figures not dissimilar for the insurance or media and communication industries. From July this year, the Australian government will introduce environmentally sustainable procurement requirements for information and communication technology contracts exceeding a million dollars. Right at the heart of all this, though, is accountability, and data to back up and evidence that position, which provides the evidence needed to build integrity, trust and, ultimately, accountability, underpinning all of this work in sustainability, and specifically digital sustainability.
Speaker 3:Anecdotally, it appears as though digital sustainability is not necessarily on many people's radar when they're pulling together their sustainability strategies. What are some of the key areas where waste and inefficiency commonly occur within IT that digital sustainability is seeking to address?
Speaker 1:That's a very keen observation there, dan. I'm keeping a very keen eye on the already disclosing sustainability reports from the ASX200. I'm seeing a lot of reporting around energy, maybe data centre, maybe a certain amount of working from home computer use, but that is largely missing. Scope three emissions generated from technology use. When I look at the high level, it's a broad spectrum of technology assets, some owned, some leased, some managed. It spans things like devices so laptops, desktops, monitors and the like data centers, software hardware, cloud computing and telecom assets.
Speaker 2:What is your view on timelines, with Scope 3 reporting not being mandated for another couple of years, and the rapid implementation of new technologies? Do you feel like there might be risk that we might see a runaway car when it comes to energy and water use?
Speaker 1:Do I see risk? Yes, that's part of what is motivating me to apply myself in this way now, because I can see things that others can't yet see, and this is a statement that's pretty broad in the sustainability space in general that people don't yet know what they don't know, and everyone's on a significant learning journey. To answer your earlier question, although the timeframes for many of these reporting requirements are not yet mandatory, these organizations would do well to have one, two or three internal reporting cycles to get this thing running. This is going to take a significant amount of work.
Speaker 1:I've been in public forums where significant business leaders have said this is the biggest transition they've seen in their 40-year career. These are people in boardrooms. They're well-known directors, chairmen of businesses that have a technology background. I can see significant challenge but, on the flip side, opportunity by leaning into this. We'll get into it in more detail later, I'm sure. But those that are purely looking at this from a compliance point of view really are missing out the opportunity, the upside and, from a risk point of view, the exposure they're opening up for their boards if they don't engage in this properly.
Speaker 3:I was speaking to someone the other day who was saying, from a CFO perspective, now that this is mandated, it isn't up to them to decide whether this will be a sunk cost or something they can realise ROI on and there's not too many CFOs who would be willing to admit that this would be a sunk cost, which means that they have to be thinking about not just the risks but also the commercial opportunities that are available to them.
Speaker 1:When initiating the conversations with people who haven't previously spoken to you about this topic. Within one or two sentences you can kind of gauge where that starting point is from and those that start from quite a negative, cost-based mindset. You know you need to adjust your approach to subtly educate and surface some of the opportunities that they wouldn't necessarily have visibility of. I'm a big believer in work that's been done at New York Stern University in the Center for Sustainable Business and they've looked at over 2000 businesses and looked at their business returns around sustainability in a very diverse inclusive strategy from the overall business performance and they've proven there's a 6% top line revenue growth opportunity for doing that. Those that have a very fragmented, let's say purely reporting kind of engagement have a 3% negative engagement. So there's a 9% performance in financial outcome, which is quite a significant variance. So I like the first answer, not the second.
Speaker 2:Tim, we couldn't have a conversation around digital sustainability without talk. How do you see AI impacting companies', climate strategy and decarbonisation roadmaps? And to add to that, I'd love to hear your perspective, both from the vendor side as well as those that are rolling the technologies out in their own operations.
Speaker 1:This is a hot topic. Big time. This gets asked everywhere I go, I think, and possibly in your case as well. It's a significant challenge, but in here there's a significant opportunity for the appropriate AI tools and solutions to help alleviate some of the complex challenges we have in the sustainability space. So under no question is there an upside opportunity. But there is also a bit of a gold rush going on at the moment where organisations can see significant potential business and control in the future of business around rapid deployment of AI.
Speaker 1:So some things are being a bit fast and loose in this space. Something like $240 billion last year alone 2024, went into AI investments globally In there is a bit of a land grab going on. You've got to be in it to win it. So people are putting down money with no visibility or very little visibility of the business return coming out of it. Now, if we look at Google and Microsoft as an example and I have to, by association, just to assume Amazon are implicated in this as well both organizations reported off their sustainability trajectory and targets last year because of AI. It's very, very resource intensive from an energy and a water point of view. That does need to be factored in to making sure this is a net, positive transition we're going through. I'm still on the fence at the moment. I don't yet see that. Just for some numbers. You asked questions about some of the vendors and suppliers.
Speaker 1:Data center rollout is a really hot topic here in Australia, as it is globally and the association of it being driven by AI. But the AI arms race let's be real really is going on in the US and China. Australia is a tiny player in this regard. Just to put some numbers on it a very large data center for AI, a hyperscale data center, a very, very large one, could be the power consumption equivalent of 200,000 homes in the US and a similar kind of footprint for water consumption as well. In Australia. Our data centers are a lot, lot smaller, so a 50,000 kind of home equivalent might be a large one in Australia. But I mentioned in my introduction that Australia, we're geographically isolated. We're a very large continent. We're a very tech consumer savvy nation. That means our per GDP uptake of digital technologies can be higher than some other countries. There's an emissions profile and a footprint that comes on the back of that.
Speaker 3:Building on that in Karen Howe's new book Empire of AI, she states in the near future there will be even bigger data centers, known as megacampuses. Just one of these could use more than three cities the size of San Francisco. A report by Morgan Stanley has also predicted that data centers in Australia will require 8% of the country's power grid by 2030. And we know, as you just mentioned, in terms of the water usage required. That is clearly a strategic risk in an already drought-prone country like ours. Can we dig a little bit further into how do you believe we can solve the physical resource scarcity issues while leveraging AI for the planetary scale, solutions that we know are required within climate and nature?
Speaker 1:The first point really to tease out is the 8% number that puts data centers on par with steel and iron. That's three times greater than global aviation. That's a very significant number to be focused on. Personally, I'm quite concerned by that number, based on some of the growth rates that I'm seeing at the moment, and you're right to point out, in Australia we're a very drought prone country and water consumption is certainly front of mind for citizens not necessarily in the technology space.
Speaker 1:And just so people understand how on earth data centers use so much water. They are packed full of chips and very hot IT equipment that needs to be cooled. Air conditioning systems tend to use evaporative cooling, so water will be taken out of the freshwater system, used through pipes in order to cool the very expensive technology equipment, and then a very large proportion of it evaporates. It's not necessarily recycled water. There are a whole bunch of technologies and a number of data center operators are looking into circular based systems so they're less reliant on fresh water consumption. But it is a big risk and a risk that should be front of mind for Australians, who are very mindful of water consumption.
Speaker 3:In the same, we should be with power for Australians who are very mindful of water consumption, in the same way we should be with power. Considering the resource intensivity of the technology, why is it still expected and predicted to play such a large role as we head towards 2050?
Speaker 1:Maybe it's a bit of a one-on-one on how AI is so resource intensive. So essentially, there are two sides to AI. There's the generating the models and then there's the referring of the models. In order to build a good AI model, you need access to an awful lot of data, and the processing units which are very dense and in high proximity to each other so they can work together have to process vast amounts of data in order to be effective and efficient from a referral point of view later on. That energy density is very, very hungry, and that is what's underpinning those numbers.
Speaker 1:As I referenced earlier, there's a bit of a land grab going on, so a number of people are putting forward demand signals into the energy provisioning system, which isn't as responsive as technology. Community want these energy services now, but in the case of new gas turbines there's like a five or eight year queue. It's longer for a power station, so the generation capability isn't working at the speed of the kind of technology consumers are demanding. There's a lot to play out in this space and there's a lot of people focusing on this topic at the moment.
Speaker 3:And what do you see as the upside, from a climate and nature perspective, of utilizing AI to our advantage?
Speaker 1:Data. I think that's where I'd start with that question. To be able to evidence something through data or to highlight opportunities for developing solutions around reduction in emissions transition programs, we need to collect vast amounts of data and humans alone are pretty poor at dealing with that and inconsistent in the way we review data. But AI, as a tool applied in a very specific way, can really help generate really good insight and direction in helping us solve some of these things. So, well applied, I think it can play a very valuable role.
Speaker 2:Tim this is a great foundation and A great insight for our listeners, who are likely sustainability practitioners that don't have a background in technology, so it's really important for them to understand, first of all, why digital sustainability needs to be top of their agenda, but also the potential impacts and the unknown impacts that AI might have in both their reporting, but also the way that they're going to approach their reporting and the action plans, but also the way that they're going to approach their reporting and the action plans. I want to talk a little bit about how these practitioners are going to get ready, in collaboration with their IT teams, for mandatory reporting and, of course, climate strategy no-transcript.
Speaker 1:The sustainability reporting space is working in the context of financial space under the responsibility of the CFO, and financial reports have been around for decades, if not centuries. So the maturity and the predictability and the certainty around that isn't there necessarily in the sustainability space. It means this will be a highly iterative and highly collaborative journey over time involving many, many aspects and functions within the organisation, specifically in IT. In my engagements with sustainability and IT teams I find it helpful to establish a baseline of capability and ambition. This helps inform the establishment of a transitional roadmap.
Speaker 1:There are a lot of similarities and parallels between IT and sustainability, maybe about 10 years apart. In my 25 years of working in IT functions in enterprise, it 15 years ago was a very expensive function. The business value wasn't immediately transparent, cost a lot of money and caused a lot of challenges. But about 10 or 15 years ago there was a real flip in my experience working in financial services or telco where organizations went from having an overall strategy supported by an IT function to being an IT company in a specific sector. I see an opportunity for sustainability to go through that transition. We're not there yet because we're still establishing baselines and understanding the starting point at the moment, but I think many will be surprised. With the right reach out to technology teams, with the right sponsorship and support, there will be some real exciting champions and advocates to help you on your journey.
Speaker 3:What do you think are some of the key lessons that CIOs could share with their sustainability counterparts?
Speaker 1:There's lots of aspects to that. So I was just listening to a previous podcast from you guys around risk yesterday and it was making me think around. A lot of work in technology centers around project operational security or compliance-based risk. There are so many synergies and parallels and opportunities to collaborate.
Speaker 1:In many cases, sustainability functions are very heavily reliant reluctantly on spreadsheets. That's obviously not sustainable or scalable. So vendor selection around products is important. An IT function should be able to support you in helping you choose something that's appropriate. There are way too many options out there at the moment for very specific niche needs. There will be consolidation in that space. It's really important to make sure that it's not a standalone solution. It is integrated and part of your overall organizational suite of software. But then, by the same token, much of my work is focused on preparing and helping IT teams to get ready for counting the emissions related to technology and making sure it's part of the overall strategy of the organization. Really, it's around risk, it's around projects, it's around operations, it's around vendor selection, it's around supplier engagement. There's procurement angles to this as well. It teams need to be the center of a sustainability strategy in any organization.
Speaker 3:Do you have any data around the way that sustainability initiatives can help motivate IT teams?
Speaker 1:It's a great question, dan. Last year, the climate action technology community, which is a global community of over, I think, 10,000 professionals now working in this space. It's a non-profit, but it's very open source and highly collaborative they commissioned a survey globally last year, which included Australia, looking at the motivations of technology practitioners and, very interestingly, when they were given a binary choice between cost-based measures like, do you want to save your company money or would you like your work to contribute towards sustainability outcomes, only 16% of the respondents indicated support for financial cost-based measures. It's somebody else's money after all, not theirs which really tells me there's a values and a purpose alignment. That is a dormant sleeper agent inside the technology community that I would certainly like to tap into and help surface, because that could really help turbocharge some of these projects.
Speaker 2:I want to pull a thread on sustainable procurement. Can we explore how that is going to impact IT procurement?
Speaker 1:So the federal government in Australia, following the lead from several other countries certainly the UK have already done this where vendors and suppliers are providing technology-based services and there are already existing services that fall under the sustainability procurement criteria ICT, telco, that kind of stuff from July 1 in Australia will have to start meeting criteria around sustainable procurement for purchases over a million dollars. I assume that's batched services If you're buying 100,000 laptops or something that would obviously be in scope. I haven't yet actually seen the published details of what that is, but I imagine those that are working in the public sector and working with federal government will be well aware of that. It's worth keeping an eye on things like that because certainly the private sector, when seeing that, are going to take notice and already I'm starting to see tenders or procurement outbound kind of inquiries requiring certain sustainability criteria already appearing in tenders and procurement criteria.
Speaker 2:Which I find quite interesting because it creates yet another point of pressure for the work of sustainability professionals and the organizations that are vendor side equally so brings more attention to the sustainability perspective and hopefully results in more resourcing for those teams.
Speaker 1:Yeah, there's another angle that I was heavily involved as well, which was around what you might call an internal procurement process. From several organizations I've worked in, I've been quite involved in what you might call a statement of work process, where a project is being stood up in order to procure certain IT capability. It's important that sustainability expectations are represented in such documentation or approvals. One thing we might talk about shortly is around establishing a carbon or an emissions baseline, not only for the organisation but for the IT function specifically itself. That's really important because when new projects are being established or stood up or decided on the decision around spend whether it's capital expense or operational expense it also includes the carbon expense as well.
Speaker 1:There may be solutions where you're standing up a very cost effective solution, but if it means it's drawing on your carbon budget because you only have so many dollars of carbon budget to spend, then that's a decision that needs to be surfaced early on. There are quite significant choices available. For example, I've recently looked at, say, cloud computing in Melbourne and I compared it with the lowest carbon emitting instance. This was a cloud-based solution I was looking at at the time and there was a 54% difference between choosing something offshore in Sweden. It's a long way away, but that was the lowest emissions alternative in the world versus one in Melbourne. So it just goes to show there are significant carbon differences in where you place workload and offer it to your customer.
Speaker 2:A really good example of sustainability, integrating across yet another function of the organisation. Which leads me to my next question, which is how can organisations build internal support and expertise for mandatory climate reporting within their IT teams?
Speaker 1:Yeah, it's a tricky sell when you're starting with mandatory compliance reporting. Those are three taglines that aren't really going to engage or excite people. To start with, I really try to focus on the overall organizational sustainability strategy. From a high-level point of view, sustainability is merely the executor of that strategy. Therefore, it's important that we highlight some of the benefits or the opportunities by engaging in a sustainability transition and, by consequence, the compliance just drops out as a side byproduct. I prefer that approach because then there's a lot more opportunity for people to engage in overall wins, rather than just a glossy document that keeps the regulator at bay.
Speaker 3:In terms of the setting of those IT carbon reduction targets that you mentioned. We know that that is a significant first step for a lot of organizations. What are some of the initial considerations?
Speaker 1:A baseline is really important and it's really important for the IT function, but the first baseline is probably going to be wrong. And I say that because there's so many moving parts in this, there's so much maturing going on, there's so much learning going on. It's really important that the organisation or the function make the best educated guess, essentially based on evidence, and it's really important that assumptions are documented to show how you got there and as you evolve and learn your journey, when you see assumptions that were not made correctly, you can then reiterate and mature on that. But that's a real challenge. It's probably worth surfacing some case studies I'm aware of in the UK from the financial services sector which alarmed me when I heard them and it's worth sharing because it talks to some degree around the litigation risk we have around misreporting. We know, based on what I referenced in my earlier comments, around the regulator being very active in this case, in this space, around greenwashing and misrepresenting companies' positions around green statements. So when organisations or practitioners, peers of mine in the UK have been involved in you might call them emissions true-ups between actual and reported emissions between organisations and their regulators, they're finding in the IT specific estates they're finding a 99% variance between actual and reported emissions and you hear that number and you go that can't be true. How is that possibly true? But when you peel back and you understand the reasons, when you look at the makeup of what goes into the numbers that were reported you're looking at, not all products and services are included. It doesn't include scope three. It doesn't include partial scope two. It may be market-based rather than location-based, may not include water consumption when you start to go through all of these numbers, or may not include all assets. So for large organizations and I'm talking very large corporates, this is really a bit of a truth telling around some of the internal processes that had nothing previously to do with sustainability or climate, around asset management or the kind of inventory control around things. It's now surfacing some of these challenges again in this space.
Speaker 1:So it involves money. In my experience and these are well-known industry figures within the technology community but between 30, 35, some cases 40% of IT expenses is surplus to requirement. We're talking over-provisioning, we're talking oversizing, we're talking projects that didn't quite meet the ambition they had at the start. There's a constant painting the harbour bridge exercise in keeping this expense aligned with generating business value. If money is being spent just for stagnant air it's not even fresh air because it's just not adding value to the business. That's a significant amount of money just for your listeners' benefit. Global spend last year on public cloud alone was something like $625 billion massive, massive numbers. It's an opportunity to have a frank and collaborative conversation with your IT department around shared value realisation because there may be an opportunity, by coming in with a sustainability lens, to release some cost which could help some of the overall sustainability agenda.
Speaker 2:It's a really interesting point because what I've experienced is, when the knowledge is presented back to the IT teams on the impact, it isn't shocking to them because they understand that the complex architectures that they've built, the legacy systems that they have been patching together for the last couple of years, combined with the implementation of new technologies and cloud-based solutions, the financial inefficiencies are generally known to the IT team. Now we're coming on to how do we untangle all of the overspend and the carbon budget and try to consolidate to generate efficiencies?
Speaker 3:If that is the case, what specific actions should IT teams be taking to ensure the accuracy and reliability of their emissions data for the upcoming mandatory reporting?
Speaker 1:I think it's useful to have some global context around how organizations are engaging with digital sustainability. My reference point is ISG's Digital Sustainability Insights Report from 2024. Isg have researched digital sustainability globally and these guys operate between vendors, suppliers and large enterprise consumers of technology and they have, in that research, concluded the value of this market is about $21 billion and growing. In one case it's growing at 39% annually a year, so massive, explosive growth. Very interestingly, they look at the primary drivers around business engagement and digital sustainability, primarily around risk regulation and reputation management, less so in opportunity, revenue and margin growth. Interestingly, the largest area of growth is around optimization, includes things like digital twins and machine learning and AI. That kind of stuff split them into five groups those that are exposed and therefore having to react to regulators, and therefore that's demanding or informing their buying approach around digital sustainability.
Speaker 1:They're aware and they're cautious, so they're probably putting a bit of a toe in the water to try and get out ahead of this, or being even more, and they're being proactive, which is great because they're really getting out ahead of it. But only about 20% of the organizations represented in their research are being preemptive or influential, so the vast majority of organizations are being motivated around risk regulation and reputation management, not necessarily around revenue growth and margin. I would like to see that change because that demonstrates a degree of confidence, or lack of, in this. In my earlier comments I talked about really to engage IT teams. You know, risk reporting regulation, mandatory reporting isn't necessarily going to win friends and influence people. It's very necessary to do it. I've worked under heavily regulated markets most of my career, so I'm very familiar with that. But it's not necessarily the best motivator for teams to engage.
Speaker 2:Let's talk about actions and action plans. So one question we have is how can our sustainability listeners best engage with their CIOs, who have now become a key decision maker within companies across Australia?
Speaker 1:Lots of ways. Firstly, obviously, initiate a conversation with the CIO or CTO and buy them a coffee or lunch, which is a great, hopefully introductory, conversation introductory conversation but secure an invitation to speak at their next IT leadership team meeting if you haven't done already and find a way to identify the sustainability champions and advocates within the organisation. They will be there and you may be surprised where they come from. I've had a number of these conversations already and it's really, really important to get this engagement right, or the initiation of it correct. Sustainability people will be very familiar with significant expectations on their function, minimal resources and not enough time. That certainly translates in the technology community as well. It would really help if you have board or ex-co leadership sponsorship of the overall strategy, so you're not just going in alone. This needs to be a long standing, long termterm engagement. This is not just a one-off to help you with your report this year. This is a long, long-term engagement.
Speaker 3:I would imagine that the stat that you shared earlier of people motivated by sustainability-related KPIs is a pretty solid data point to be giving our listener confidence that there are people in the IT org who will be very open to their message.
Speaker 1:Absolutely, Dan. It is early days, though. I mentioned also in my introduction, there are 900,000 practicing professionals in technology jobs in Australia. I've been working very hard from the inside to work through the industry groups, both technology organizations but also individual practitioners, to try and lift sustainability. It is a work in progress. We need to do a lot more to prepare for this. As I keep on mentioning and many people use this statement people are not yet alive to the issues they can't yet see, so therefore the demand signals aren't necessarily there. But once people see these things, you can't unsee it. And once that happens and people go through that transition, wow, people engage and it's amazing what you can achieve when that happens.
Speaker 3:In light of that, what is one concrete action that our listener, as a sustainability leader, can take away from today's conversation to initiate this collaboration with their tech peers?
Speaker 1:Start the conversation and be prepared to listen and don't just talk and ask, because I wouldn't be surprised if people have personally maybe thought about these things. They haven't yet worked out what the on-ramp or the invitation is for them to be involved, and maybe your role as a sustainability practitioner is directing traffic.
Speaker 2:Tim, we've talked a lot about the inherent risks that are associated with basing emission calculations solely on spend. Do you have any idea of how organizations can gain a more accurate understanding of their technology emissions?
Speaker 1:Many organizations, in order to kick off their emissions reporting, are using invoicing as a means of at least getting it going. We can expect that to continue, with the CFO being responsible for this reporting requirement. However, it doesn't necessarily provide the nuance or the accuracy that you would need around IT-based emissions. It's probably worth understanding that technology products and services often make use of discount regimes based on the client relationship, the sector or the longevity of their engagement. Very few organizations pay list price. Some negotiate discounts of 60, 70% off list. So when emissions calculations are purely based on the spend, it means there can be some wild volatility in the emissions profile that's generated from that. I really encourage a much lower level of granularity of reporting.
Speaker 1:Many, many suppliers provide a degree of sustainability-based reporting. It's on a maturity journey that's really important to understand. And buyer beware don't necessarily ingest these reports as compatible with your own aspirations and obligations around sustainability reporting. It's really important that the receiving customer function ingest and localise that reporting and put back some challenging questions about emissions or gaps. I referenced earlier around the UK case studies from financial services around 99% variance between actual and reported. That point is where some of those missing emissions can be attributed to. I've been in many cases where a customer has somewhat naively just believed factually the sustainability reports shared by their supplier, ingested and reported up the organization unchecked, unseen really, and celebrated some of the, let's say, marketing material that's come from their supplier around the sustainability credentials, only to find they're opening up a massive litigation risk for misreporting.
Speaker 2:One interesting thread from the start of the conversation is around waste. You mentioned the huge amount of waste generated at organisational levels. What is an easy first step that individuals or organisations can make to contribute to better e-waste management in their operations?
Speaker 1:E-waste is something that's really starting to become front of mind and in many of the early Group 1 reports that I'm reading at the moment, it's purely energy consumption. You know, how much do you use your laptop, use at home or in the office? That's kind of what's being reported at the moment. However, when it comes to scope three kind of reporting the materials in the asset, the supply chain to the asset coming to you, and then also the waste streams and what you do after it, whether it's reused, recycled or disposed of in landfill At the moment the vast majority are disposed of in landfill.
Speaker 1:There are two very, very easy, simple steps that you can try to apply today, and one of them is using devices for longer. Maybe use the devices for four years, not three years, and in business at the moment is up to three years Many don't last that long and then look to reuse or repurpose that asset or recycle that asset after its end of life with you as a customer, because there may be and there are a number of suppliers and providers that help with that. Really try to avoid pure disposal to landfill.
Speaker 3:What a key section. Thank you. Now, as we said at the top of the episode, this is our 10th episode, and as the 10th episode, we obviously want to try something new. We're fascinated by the thought leaders that we have on this podcast and what they're reading and watching and listening to, and we'd love for you to share with us, firstly, a book recommendation that you believe would be beneficial for our listener to read themselves.
Speaker 1:I'm actually going to give you two, because I just had another one come in yesterday which I want to share because it's very relevant to this topic how to Fly a Horse the Secret History of Creation, invention and Discovery by Kevin Ashton. It's a really strange title. It's a great read and it's an easy read as well, because it gives you permission to think of big things and consider yourself a contributor towards creation and invention, and it's not just the domain of the genius or the very exclusive people. All great advancements in society are built on incremental change and adaptation and not just on the brains and the capability of one individual, so I like that. From a collaborative point of view, it's really, really useful.
Speaker 1:The one I really want to tag as well is the Climate Truth by Tim Berners-Lee, so the brother of the founder of the internet. So that's on my reading list for my upcoming trip. A film I do want to call out because this has really exposed or exploded the whole digital sustainability journey into this. It's available online, clouded too, and it's really a documentary around exposing many of the challenges I've talked about in this podcast, really around putting a cost or a price around our digital lives and digital existence. Many of these costs are not known to us as society, let alone those outside of the technology community. You'd have no idea that at the end of your iPhone there's a cost being incurred.
Speaker 2:Epic. All right, so to end the episode, let's ask the two final questions. We ask all of our guests. So, tim, if we give you a magic wand, what would you like to see happen in the next five years?
Speaker 1:Well, put a carbon price on things is the result I keep on coming back to. Unfortunately, it's not very exciting and I know a lot of people will find that quite challenging, but I know in this space people will relate to that and I think it's going to come anyway, whether it's directly through a degree of ambition from politicians, but I think I'm hearing increasing conversations around carbon border adjustment mechanisms globally.
Speaker 3:And then for our final question. Can you please take us out by telling us a piece of positive climate news that you've heard recently?
Speaker 1:It's kind of linked to the previous answer really, which is I was very excited to see Mark Carney be elected in Canada. I've been following his journey. Obviously the previous head of the Bank of England. He's quite progressive on climate and the agenda, so I'm watching that very, very closely. There may be some interest around giving the political climate community a bit more confidence around climate leadership, so that's one I'm watching very closely.
Speaker 2:Thanks, tim, it's been a wonderful interview. Thank you for coming on the podcast.
Speaker 1:My pleasure Great to be here.
Speaker 2:This was Green Fix with your hosts Loretta Gutierrez and Dan Levington. You can get your Green Fix every two weeks on Apple Podcasts, spotify or Pocket Casts.
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