With COP28 being held in the UAE this year, boardrooms across the region have been abuzz with discussions around sustainability. Given the financial sector’s position as a major pillar of regional economies, and a pioneer of innovation and progress, it comes as no surprise that industry analysts are closely watching this space – eagerly anticipating developments that will set new precedents and benchmarks. And progress is indeed being made. A third of GCC banks now publish a sustainability or ESG report, versus none just five years ago.
Financial leaders have widely agreed that their industry can be an engine that drives a significant sustainability transition, not only for themselves but the wider economy. Against the backdrop of COP28, pledges by the governments of the UAE, Saudi Arabia and Bahrain to reach net-zero carbon emissions, and increasingly climate-conscious consumers, it’s become more important than ever for Financial Services (FS) organisations to create actionable sustainability initiatives that match their values. However, building successful sustainability initiatives in the financial sector can be challenging, particularly as stakeholders want to see meaningful change instead of simple greenwashing.
The challenges
Companies have begun exploring numerous options that can help them to implement more sustainable operations. Some of the more popular ways enterprises are reducing their impact on the environment are cloud migrations that avoid energy intensive on-prem data centres; cutting back on IT energy consumption by gaining actionable insights for device usage; and reducing unnecessary device waste. The investments made by global hyperscalers such as Microsoft, Google, AWS and more to establish locally-based cloud data centres have paved the way for regional banks to embrace the cloud, while conforming with data sovereignty regulations and requirements.
But for these top initiatives to be implemented successfully, the financial sector must look at its own data usage to inform them of areas where they can improve and support sustainability. Unfortunately, the complexity of the data required has so far made collecting accurate sustainability data a huge challenge.
Sustainability reporting involves gathering data from various internal and external sources. However, without the proper tools in place, combining all of these internal and external sources can make analysing sustainability data extremely complicated. A successful sustainability program must include a cohesive system that can pull together seemingly unrelated sections of data. Without this, sustainability reporting can become time-consuming and dense for organisations, and risks a lack of accuracy.
The dangers around inaccurate sustainability reporting for the financial industry are also negatively affected by the lack of standardisation in how the data is measured. The absence of a framework makes it difficult for organisations to verify data across different platforms and channels. This can create a disconnect between attaining a holistic and precise representation of how well a company is complying with their own sustainability goals and how to recognise areas where they can improve.
The benefits of unified observability
Industry-leading unified observability solutions play an important role in helping financial services organisations, and indeed all companies, implement and track their sustainability goals. By gathering and correlating large amounts of granular data from internal and external sources and then transforming them into actionable insights and workflow automation, unified observability solutions drive effective decision-making models and organisational awareness about its social and environmental impact.
For example, a sustainability dashboard can reduce hardware waste by providing businesses with a more accurate lifespan of devices. This means they can reduce waste and device costs by measuring the performance of devices, prolong the lifespan of aging devices that are still performing well, and only replace devices that have truly reached their end of life. Additionally, many of these dashboards can also retrieve information from devices to detect how long they have been left on standby and remind users to switch the device off when not in use, creating immediate energy and cost savings.
Unified observability dashboards can also help the financial sector keep track of the carbon footprint caused by their data use. Data centres account for almost 4% of the entire world’s energy use – a staggering amount. Given soaring summer temperatures, characteristic of so many Middle Eastern nations, this energy requirement is likely to be even more pronounced. Therefore, organisations must reduce that figure where possible and undertake the first step of understanding how much energy is being used on an individual business level.
Finally, unified observability solutions that offer intelligent automation can drive workflow optimisation of resource consumption and operational reliability while reducing failures and the footprint of human intervention.
Small differences make big changes
Action is needed to improve sustainability measures within Financial Services companies in the Middle East. While this might seem like a daunting task, tools such as unified observability solutions can serve as the foundation to drive Sustainable IT practices. For these investments to reach their full potential, they must be embedded into a wider strategy which sees sustainability integrated into the businesses’ core values and buy-in achieved across the employee base. Afterall, what good is having tools that illustrate environmental impacts, for instance, if they’re not being used for accurate decision making and actions?
This buy-in could be achieved by leaders communicating with their staff about the impact sustainability reporting can have on stakeholder trust or why a business needs to show a commitment to sustainable practices to meet investment criteria. Measuring and providing employees with insights about their impact to the environment, is the first step to encouraging employees to measure their sustainability efforts and drive change in employee behaviour. As a result, financial services organisations will not only be empowered to meet sustainability regulations and save money, but have a tangible, positive impact on the world around them.
