Why sustainable transformation will rely on enterprise architecture

By Jim Hietala, VP Sustainability and Market Development, The Open Group.

  • 4 months ago Posted in

No matter how complex, wide-ranging, or multifaceted a business becomes, its ultimate success can always be traced back to a handful of non-negotiable necessities. Objectives like having enough revenue to sustain operations, maintaining the workforce needed to deliver those operations, and ensuring compliance with regulations that govern those operations touch every part of an organization.

Increasingly, those long-established commitments are being joined by a new need to deliver operations in a sustainable way. The pressure for this shift comes from multiple quarters. Government regulations, for one, are trending towards more stringent requirements – and more forceful penalties for non-compliance. There is a growing demand amongst consumers and end-users to favor businesses with clear, effective sustainability initiatives in place. Business partners pursuing their own sustainability imperatives need to ensure that their whole value chain upholds high standards and are becoming more likely to stipulate as much in contracts and agreements.

And, perhaps most significantly, there is a clear internal pressure coming from within organizations to transform towards truly sustainable operations. The necessity of a holistic response to unsustainable business practices – including, but not limited to, emissions reduction – is universally and clearly understood. Employees want their businesses to take action, and employers want to help deliver an economy that will support their businesses long into the future.

Where we’re coming from

If sustainability now sits alongside things like revenue as an objective which every part of an organization must feed into, and which constitutes an existential necessity for the future of the organization, it must also be treated with a similar kind of depth and attention.

This stands in contrast, however, to the approach to sustainability which many of us will be most familiar with. There has, of course, been a significant shift over the last decade or so in sustainability engagement: while environmental friendliness has been a visible feature of businesses for decades, we have recently seen a turn towards a more targeted and measurable approach. Most corporations will now have internal commitments around environmental, social and governance (ESG) or corporate social responsibility (CSR) reporting which tracks progress against defined long-term goals.

To be clear, this is a necessary and positive trend which marks the start of a journey towards meeting the extraordinary challenge that sustainability poses to most organizations. Nonetheless, it is an approach which makes sustainability just one of various activities that

are being invested in. At best, this places it alongside things like product development, marketing, and HR, rather than something that all of those areas interact with and share responsibility for.

Another way of looking at this issue is to think of it in terms of information flow. An ESG initiative might draw on data from various parts of the organization – and from the organization’s partners, vendors, and customers – in order to make measurements and track progress. The question is whether that data is then made present and so influences decision making across the business as a whole.

If it isn’t, then sustainability is still secondary to those other operational necessities which every business unit and business leader does and must understand and act on.

Where we’re going

Establishing systems that enable information to flow in the right way, to be made available in a timely manner and without boundaries, is not an easy task, but it is one with a well-established toolkit around it. For decades, the discipline of Enterprise Architecture has grown and developed to solve exactly this kind of problem: looking at technology and business practices as a holistic environment, it brings rigorous processes to bear which enable more efficient, resilient, and innovative ways of working.

The role of Enterprise Architecture has been gaining prominence in recent years, in particular, as organizations have sought to balance the transformation imperative with the need to sustain existing areas of value. Ensuring that new products, services, or methods integrate well with established offerings – and, indeed, ensuring that those two aspects mutually support one another’s value – is something that Enterprise Architecture fundamentally enables.

Looking forward, businesses which want to commit sincerely to sustainability will need to repeat that move with these new information flows. It would not be going too far to say that sustainability is an echo of digitalization as a transformation imperative: it means reexamining and rearchitecting the fundamentals of daily workflows.

What we need

Of course, things like revenue maintenance, workforce management, and regulatory compliance are also information-driven processes, and businesses invest significantly into ensuring that the relevant information is well-founded, well-stored, and well-shared.

One major difference with sustainability is that the nature of the information it needs to work with is still an emerging factor. Even for something as obvious as CO2 production, different businesses or processes within businesses might use different units to record that data, different definitions for what constitutes direct or indirect emissions, different ways of describing how that data was recorded and with what level of confidence, and different field

names and file formats for storing and sharing that data in. This makes a broad, accurate view of a given organization’s footprint very difficult to attain, and the problem is multiplied when we add other greenhouse gases like CH4 and NO2 alongside impacts like water and land consumption.

Solving this challenge – and so making a holistic, Enterprise Architecture-based approach to sustainability possible – is the role of the Open Footprint Forum, a forum of The Open Group. In the context of typical value chains found in businesses, the prospect of gathering emissions data for scopes 1, 2, and 3 reporting is daunting, and the outputs and standards coming from the forum will greatly ease these issues.

The Forum, which encompasses a range of corporate and academic contributors, is developing a set of standards which is usable across all industries, with unified data and metadata definitions as well as a data platform and API implementations to ensure a common approach to working with those definitions. The Open Footprint initiative is also producing a reference architecture and reference implementation, to be delivered across major cloud services, so that organizations can move quickly to developing applications which make effective usage of their sustainability data. In addition, we expect that software solution providers will gravitate to these standards to help deliver interoperability across the emissions ecosystem.

How we will make it matter

One thing we know, from years of incubating standards development processes, is that cultural norms and usage is just as important as technical design when it comes to effectiveness. This is equally true for sustainability standards, as we learned recently by hosting business scenario sessions in Edinburgh and São Paulo.

In these sessions, the aim was to create communities of sustainability-focused professionals across industries by working through a three-step brainstorming process to identify problems, find commonalities, and agree on prioritizations. What we found was that issues around operating models, such as supply chain integration and stakeholder incentivization, are just as significant a concern as data issues like validating and exchanging information. In Edinburgh, these were each allocated a third of the budget; in São Paulo, the agreed number was 37%.

What this teaches us is that, even as we progress towards a standard for sustainability data that every industry can hold in common, we will need to deepen our understanding of the organizational complexities around using it. That means that now is the moment for Enterprise Architecture to start building and sharing the systems and processes which can put sustainability right at the heart of effective decision making. Now is also the moment for organizations that are wrestling with emissions data management and reporting challenges to consider getting involved in the Open Footprint Forum.

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