Environmental sustainability is increasingly a core selection and disqualification criterion for IT products and services.
As the market shifts, IT vendors identify environmental credentials as a prerequisite to participate in RFPs with governments and large organizations. Environmentally superior offerings will gain market share, even if they cost more than alternatives.
Increasing adoption of generative AI (GenAI) will lead to dramatic increases in energy use, with annual information and communication technology (ICT) electricity increases of 25% or more. Increased emissions and water consumption could result in vendors failing to meet environmental performance targets established in application selection processes.
Commencing from the 2024 financial reporting season, environmental sustainability regulations are progressing to implementation, demanding that sourcing, procurement and vendor management (SPVM) leaders take action to secure required data from vendors.
Exclude vendors that are significantly out of alignment with the enterprise’s environmental sustainability expectations by evaluating vendors’ sustainability performance, either as a prequalification mechanism or within RFP processes.
Track and champion vendors that advance progress to the enterprise’s environmental objectives by measuring their impact and identifying what performance premium may be acceptable to meet the objectives.
