The ANZ region needs to catch up with the ASEAN region in regards to sustainable IT practices, with poor ESG scorecards for many businesses, a new report has revealed.
Paessler AG has commissioned Intuit-Research to assess the current state of sustainability practices among businesses in Australia, New Zealand and ASEAN, which explores the drivers and barriers to implementing sustainable IT practices.
The findings highlight the crucial role of IT monitoring in ensuring the success of sustainable IT strategies, which serve as a precursor to digital transformation.
Paessler's survey involved in-depth interviews with 200 business decision-makers from large enterprises with revenues ranging from 50 million to over 1 billion USD across three key sectors: Manufacturing, Essential Services (including Utilities, Public Transport, and Hospitals), and Tech/Telecom/Data centres, a fifth of these were from Australia and New Zealand (ANZ) organisations.
The research indicates an optimistic business outlook over the next three years in the ANZ region, with 67% of businesses stating they were very optimistic. Meanwhile, those in Singapore had a more conservative sentiment, with 23% expressing uncertainty or pessimism.
This positive outlook for ANZ bodes well for investments in priority areas to drive future business growth; however, environmentally conscious investors may steer clear of businesses that do not have an Environmental, Social and Governance (ESG) sustainability scorecard.
The pandemic has accelerated digital transformation efforts across all markets and sectors, leading to higher growth rates and improved resilience despite supply chain disruptions. In keeping with this trend, digital transformation emerges as the top priority for businesses across the ASEAN markets (66 per cent), whereas only 38% of ANZ businesses stated it as a priority.
"Digital transformation can enable sustainability by making businesses more efficient, reducing their environmental impact, and helping them meet sustainability goals, so it is concerning that there is a disconnect for businesses in Australia and New Zealand with a much lower share seeing digital transformation as a priority," says Amit Phatak, Director and Partner, Intuit-Research.
Since the pandemic, the priority for businesses in ANZ is innovation to drive growth (60%) followed by increasing efficiency and productivity (55%) whilst sustainability including ESG practices is the third most important priority for ANZ businesses (50%). On the other hand, Australian businesses are the furthest along when it comes to having a clear sustainability strategy and acting on it (63% versus 44% for ASEAN).
Despite embracing sustainability and ESG adoption, businesses in ANZ are significantly behind their ASEAN peers regarding their sustainable IT strategies, with only 48% already having one, whereas in ASEAN it is 72%. However, the remaining ANZ businesses (52%) plan to have one within the next year.
All the ANZ organisations Intuit-Research spoke to said that monitoring their IT systems and infrastructure had enabled them to reduce emissions, which is the key sustainability focus for the ANZ firms. Due to their infrastructure monitoring, many adopted other sustainable IT strategies such as optimising power usage, hardware utilisation and improving energy efficiency.
Manufacturing and Essential Services sectors prioritise diversifying and tracking supply chains in real-time across ASEAN (60%), while Tech/Telecom and Data centres emphasise sustainable IT strategies, greener data centres, and on-premise to cloud migration (80%).
Despite sustainable IT strategies being on the radar for 100 per cent of businesses in ANZ, most believe there is room for improvement in their capabilities with only 62 per cent of ANZ businesses acknowledging moderate to low or no in-house competency in sustainability practices.
The top barrier to adopting sustainability practices for ANZ businesses is the lack of clarity from governing bodies (50%) followed by the cost of deployment (48%) and the lack of technical know-how on planning and the implementation of sustainable practices (48%).
Sustainability and digital transformation are often perceived as separate initiatives, leading to a fragmented approach to developing sustainability frameworks. Many ANZ businesses have focused on achieving specific corporate metrics related to emissions, recycling, water or energy consumption. Reputation (45%), industry standards (36%), and regulatory compliance (24%) were the main drivers for adopting sustainable frameworks in ANZ.
"Paessler emphasises the interconnectedness of building a robust IT strategy, digital transformation strategy and sustainability framework," says Felix Berndt, regional manager for Asia Pacific at Paessler AG.
"Businesses must overcome siloed approaches and recognise that these areas are part of the same puzzle," he says.
"By improving awareness and knowledge of sustainable IT strategies, backed by effective IT monitoring provided by solutions like Paessler PRTG, businesses can reduce their carbon footprint, become net neutral, and accelerate progress towards achieving their sustainable development goals."