By Chris Forde – The Open Group EA, Vice President, Global EA and General Manager, The Open Group APAC.
Today I’m going to focus on the sustainability considerations you may face in your day to day work and in your career as Enterprise Architects.
The most prominent framework for Sustainable development goals are the United Nations Sustainable Development Goals depicted here. Sustainability is an increasingly important consideration in the work and careers of Enterprise Architects (EA). When I say EA or Architects please keep in mind I am referring to the entire profession of Architects.
Solution architect technical architect full stack architect whatever word is in front of that title architect that’s the profession of architects with a common set of tools capabilities knowledge skills and experience so architects play a critical role in aligning business strategies with technology solutions, and in presenting pragmatic options and choices for decision makers in our respective organizations.
As sustainability considerations gain prominence in government and in enterprises, you must adapt your approach and practices to include them and address them.
Since 2006, there has been increasing emphasis on sustainability in laws and regulations from governments, also in the expectations of the business environment from investors, and leaders, and in the expectations of citizens and of course employees and consumers.
It is impossible to escape the realities of our environment, society, or governance, we live within them. I imagine we all hope for a better future for ourselves and our families. We as Enterprise Architects can influence and perhaps shape that future. I want to make a significant point here, there are no perfect sustainability answers and there are very difficult choices, balancing of issues and tradeoffs to be made. Every choice made can be a target of criticism. However positive progress is possible and essential.
Here’s a breakdown of each ESG component:
1. Environmental: Environmental factors encompass a wide range of issues related to the natural environment. This includes assessing an organization’s impact on climate change, greenhouse gas emissions, energy consumption, waste management, water usage, pollution, biodiversity, and resource conservation. ESG goals related to the environment focus on promoting sustainable practices, mitigating environmental risks, and transitioning to a low-carbon economy.
2. Social: Social factors encompass the impact an organization has on people, both within and outside of the organization. It includes considerations such as employee relations, diversity and inclusion, labor practices, human rights, community engagement, customer satisfaction, data privacy, and product safety. ESG goals related to social factors aim to foster positive social impact, promote fair and ethical practices, and ensure the well-being of stakeholders.
3. Governance: Governance factors relate to how an organization is governed, managed, and controlled. This includes aspects such as board structure, executive compensation, shareholder rights, transparency, ethics, risk management, compliance, and anti-corruption measures. ESG goals related to governance focus on promoting strong ethical leadership, accountability, and effective risk management to build trust with stakeholders.
In terms of your careers, ESG goals offer new opportunities for you to contribute meaningfully to organizational success as an Architect by including sustainability. People with expertise in sustainable architecture, social impact frameworks, and governance are likely to be in high demand.
New specialized roles such as ESG architects or sustainability architects have already emerged within some enterprises. To be clear this is not about sustainability being someone else’s job, or a new role. The point is weaving this into the fabric of your practices and the outcomes for your enterprise.
People who can navigate the intersection of technology, business, and the added dimension of ESG considerations will be well-positioned to drive positive change and shape the future of their organizations.
ESG goals require organizations to adopt sustainable practices, reduce their carbon footprint, and address environmental challenges. EAs need to integrate sustainability considerations into the enterprise architecture and the many different views of whatever it is that you’re dealing with, this involves identifying and evaluating the options related to the environmental impact of technology decisions, designing eco-friendly systems, and promoting energy-efficient solutions. For example, assess the lifecycle of IT assets, make recommendations of green technologies, and the optimization of data centers to reduce energy consumption.
Over time, this becomes in part a supply chain analysis and evaluation with your existing partners and suppliers and customers, all the way back to origin points.
What I mean by that is if you’re in the food product delivery business you may be dealing all the way back to the field the farmer is producing organic or inorganic materials which is a topic of conversation at lunch the social responsibility is a key component of ESG goals.
Enterprises are expected to contribute positively to society by addressing social issues, promoting diversity and inclusion, and engaging with local communities. Of course, Governments do the same for their citizens. EA’s need to identify and consider social responsibility principles in developing their architecture strategies.
You may be involved in designing capabilities and systems that enable transparency, protect privacy, and handle data ethically. You may leverage technologies and business practices to support initiatives such as employee well-being, fair labor practices, and community engagement amongst other things.
Governance is a central pillar of ESG goals, focusing on ensuring ethical behavior, accountability, and risk management. EAs play a vital role in establishing governance frameworks and ensuring compliance with regulations and standards.
Examples include designing architectures that enable transparent recording of accurate data, reporting, auditability, and effective risk mitigation. Also assisting in establishing data governance practices, implementing cybersecurity measures, and embedding privacy controls into systems.
ESG goals often require organizations to collaborate with stakeholders, including customers, suppliers, investors, and regulatory bodies. EA’s need to foster collaboration across business units and facilitate the integration of ESG considerations into various processes.
They may engage with stakeholders to understand their needs and design architectures that support data sharing, sustainability reporting, and stakeholder engagement initiatives.
This ecosystem’s idea may seem a little bit of a stretch but we’re already inside the open group with the help of the leader of IBM’s technology Academy and with Honda on identifying what defines a digital ecosystem and how companies will operate in that type of ecosystem in the future emerging technologies and innovation so on this slide I’ve said insert your list here.
ESG goals may drive innovation by pushing organizations to adopt new technologies and find creative solutions to sustainability and social challenges. This is the behavior of architects in synthesis not analysis that is creating something new from multiple things that already exist that have not yet been composed into an effective tool but will be by people like you.
EAs need to stay updated on emerging technologies and assess their potential to support ESG or impact objectives. They may explore the use of technologies such as artificial intelligence, blockchain, and IoT to enable sustainable practices, optimize resource utilization, and enhance social impact.
Staying in that region of the world Nordic countries like Sweden, Denmark, Finland, Norway, and Iceland consistently rank high in ESD performance. They have strong environmental policies, social welfare systems, gender equality initiatives, and governance practices. These countries prioritize renewable energy sustainable development social inclusivity and transparency at the other end of the world. New Zealand has gained a reputation and recognition for its environmental stewardship conservation efforts and commitment to renewable energy. This country has set ambitious targets to become carbon neutral by 2050 and has implemented various initiatives to protect biodiversity and promote sustainable land management.
Now in this context I want to draw attention to a specific activity within The Open Group Government Enterprise Architectural Workgroup. the Government EA Workgroup has been established to help government organizations through the development and sharing of best practices and the workgroup focuses on developing standards and best practices relating to the worldwide use of EA in government organizations. These work areas include are not limited to all of government paradigms federated approaches and reference architectures, building and sustaining architecture capability, architects careers, and competencies in that area and a 230 agenda for sustainable development the United Nations sustainability goals are core to this work group. We are collaborating with organizations such as smart Africa who push the agenda for government transformations in EA on a sustainable basis.
European Union (EU): The EU has been at the forefront of ESG initiatives, particularly in environmental sustainability. It has implemented regulations and targets to address climate change, such as the European Green Deal and the EU Emissions Trading System. The EU also promotes sustainable finance, and has developed frameworks like the EU Taxonomy for sustainable investments.
Environmental:
In September 2020, China announced a commitment to carbon neutrality by 2060, and a peak in carbon dioxide emissions before 2030. The government has been actively promoting renewable energy sources and electric vehicles. It has implemented policies to restrict single-use plastics, and extensive reforestation programs have been implemented.
Social:
Huge strides have been made in poverty alleviation in early 2021 it was announced that nearly 100 million rural citizens were lifted out of poverty since 2012. The total number of people lifted out of poverty is much larger, this is just the latest decades information.
As a personal note the reduction in street noise pollution over recent years when walking through the streets of Shanghai due to the decrease in combustion engines replaced by electric vehicles is noticeable in my view, fewer combustion engines mean more breathable air also. I view both of those things as contributing to a good quality of life.
Governance:
Regarding corporate governance, the China Securities Regulatory Commission (CSRC) has made efforts to enhance the quality of listed companies and protect the rights and interests of investors.
In a great example of public-private collaboration, CERDS (or the China Enterprise Reform and Development Society – a think-tank under the State-owned Assets Supervision and Administration Commission) and a group of China’s biggest business players recently combined to publish the country’s first ESG disclosure standards: the “Guidance for Enterprise ESG Disclosure”. Having the status of “association standards”, means the ESG Disclosure Standards are not mandatory, however their release is an extremely positive development for this market whose size naturally puts China at the forefront of many ESG issues on the global stage.
Unilever, a multinational consumer goods company, has made substantial commitments to sustainability and social impact. It aims to achieve net-zero emissions from its products by 2039, has set targets to enhance livelihoods, improve hygiene, reduce waste, and promote sustainable sourcing. Unilever has been consistently recognized for its sustainability efforts.
This positive view on ESG’s is not universal, it is also necessary to be aware of the debate and challenges related to ESG’s.
There are differing viewpoints and arguments related to ESG’s. You may hold these views personally or may hear them during your work.
Economic concerns: Real concerns exist that prioritizing ESG goals may have negative economic implications. Concerns are that the costs associated with implementing sustainable practices and meeting ESG standards can be burdensome, particularly for smaller businesses. The concern is that these costs may hinder economic growth, job creation, and competitiveness.
Trade-offs and trade imbalances: The concern is that strict adherence to ESG goals could lead to trade-offs and potential trade imbalances. For example, assertions that stringent environmental regulations in one country may push industries to relocate to countries with lower environmental standards, resulting in “carbon leakage” and undermining global emission reduction efforts. A balance between economic growth and environmental/social objectives is a necessary concern.
Lack of standardization: Concerns are that the lack of standardized metrics, reporting frameworks, and guidelines for ESG goals. The concern is the absence of consistent and comparable data makes it challenging to accurately evaluate and compare the ESG performance of different organizations. A lack of standardization hinders transparency and effective decision-making.
Greenwashing and reputational risks: ESG goals and reporting can be subject to “greenwashing,” where organizations engage in misleading or superficial practices to create an impression of sustainability without substantial changes. Concerns exist that inadequate verification and reporting mechanisms may lead to reputational risks and undermine the credibility of ESG efforts.
Potential conflicts of interest: Concerns about potential conflicts of interest in ESG-related initiatives are related to ratings agencies, consultants, and other stakeholders involved in assessing and advising on ESG performance. They may have vested interests that could compromise the objectivity and integrity of 3rd party evaluations.
Debate and concerns of ESG goals and the challenges can come from various sources, including:
Business associations and lobbying groups: Some industry associations or lobbying groups representing specific sectors may express concerns about the economic impact of ESG goals on their members. They may argue for more lenient regulations or exemptions based on the challenges faced by their industries.
Economists and commentators: Economists and commentators with differing perspectives on the role of government regulation and the market may raise concerns regarding ESG goals. They may highlight potential unintended consequences or question the efficacy of ESG measures in achieving desired outcomes.
Academia and think tanks: Researchers and think tanks may contribute to the discussion by offering critical analysis and alternative viewpoints on ESG goals. They may conduct studies or publish articles exploring the potential drawbacks or unintended consequences of certain ESG practices.
Media and public opinion: Various media outlets and public opinion platforms can reflect differing viewpoints on ESG goals. Opinions on ESG goals may surface in editorials, articles, and discussions, driven by a range of perspectives and priorities.
It’s important to approach these viewpoints with critical thinking, analysis and to consider a balanced view that accounts for the potential benefits, challenges, and evolving nature of the Environment, Society and Governance relative to ESG goals.
In summary: ESG goals are increasingly important considerations in the work and careers of Architects. You play a critical role in aligning business strategies with technology solutions, and in presenting pragmatic options for decision makers in your respective organizations. As ESG considerations continue to gain prominence in government and in enterprises, you must adapt your approach and practices to address them, weaving them into your work and your eneterprise.
Chris Forde, as the Vice President and General Manager for Asia-Pacific of The Open Group Global Enterprise Architecture (EA) division, has led and been responsible for the top-level design and breakthrough in multiple architecture standards, including the TOGAF® standard, O-AA™ Open Agile Architecture standard, and ArchiMate® modeling language. He has made significant contributions to the development, formulation, and global release of various versions of standards such as The TOGAF® Standard, 10th Edition.
With nearly 30 years of experience in enterprise architecture development and management, Chris is a leader and practitioner in top-level design and innovation in the field of architecture. He has been dedicated to the research and promotion of architecture discipline and technical standards. Over the years, he has continuously explored the sustainable development of enterprise architecture, distilled best practices, and actively engaged in the dissemination and application of these practices in global and Chinese markets. His objective is to assist enterprises in achieving their business goals and realizing global interoperability.
Before joining The Open Group, Chris served as the Vice President of Strategy and Architecture at American Express, where he led and was responsible for customer service capabilities.