Green IT Powers Net Zero Roadmaps for Insurers
Rising temperatures and frequent extreme weather events are just two signs of the accelerating pace of climate change, presenting one of humanity’s greatest global challenges. Insurance companies are in an ideal position to help promote and support the urgently needed response.
Insurers have significant influence due to their two main business areas:
A) providing protection against all kinds of potential threats to individuals and institutional companies, and
B) managing trillions of dollars in assets worldwide.
To display true leadership, drive industry action, and encourage companies across their portfolios, insurers must lead by example and optimize their own emissions first.
Leading insurers like Allianz, Swiss Re, AXA, and SCOR are already taking meaningful action, progressing plans to significantly reduce their Greenhouse Gas (GHG) footprints. The pressure is now on for others to do the same, and embracing Green IT will be crucial.
Introducing the Four-Step Approach
This article introduces a robust, proven four-step approach to implementing a sustainability strategy for IT, developed and trialed jointly with leading industry players. This strategy is not limited to the insurance sector, but is applicable across all industries facing the challenge of decarbonization. Whether in finance, technology, manufacturing, or consumer goods, any organization can adopt this framework to promote sustainability – demonstrating that there is a path to Net Zero in IT for all.
1. Comprehensively Assess Emissions Baseline
Before actively reducing emissions, it is essential to first build a comprehensive understanding of the various emission scopes and their proper measurement techniques. Ensuring high-quality data and accurately aligning it with official emission datasets are critical steps in this process.
From our experience, the spend-based method provides organizations with a quick and efficient means of estimating their total emissions, serving as an effective starting point. This approach also facilitates early engagement with suppliers, helping to foster collaboration on sustainability initiatives.
As organizations advance in their sustainability journey, shifting from estimation-based methods to more refined, data-driven approaches becomes increasingly beneficial - this enables more accurate measurement and effective emission reductions.
2. Define and Update Climate Targets for IT
Once the estimation of the existing footprint is complete, it is time to start setting climate targets following a thorough review of ambition levels in the context of the market. A general guideline is to adhere to the best practices set out by the Science Based Targets Initiative, which define the primary ways to reduce emissions and achieve Net Zero.
Aligning the company's climate ambitions, understanding the market, and leveraging established standards are key requirements for successful target setting. The best practice is to set strict yearly reduction targets for IT-based GHG emissions in all three scopes, and a target year for achieving Net Zero.
3. Identify Climate Actions
The next step for organizations to take is to identify and catalog all high-impact actions and quick wins in detail. This should include both ongoing and planned initiatives relating to baseline components, ensuring an end-to-end perspective. A comprehensive approach will enable the projection of greenhouse gas effects associated with company growth, technology efficiency gains, and supplier evolution.
Using the BCG Platinion Green IT Framework
Our battle-proven Green IT framework can be deployed to target each emission-generating component along the entire IT value chain, including hardware, software, and services. The framework also factors in decommissioning, ensuring that the circular economy and e-waste management are considered. Using a framework that includes these features gives teams full visibility of their efforts and helps to pinpoint where the greatest impact can be achieved.
Tackling Key IT Emission Types
The Green IT framework will help to identify all relevant action fields and potential quick-win levers. Based on our experience, the most important levers to tackle IT related emissions belong to the five action fields displayed in the graphic below.
Incentivizing the sourcing of renewable power, more sustainable hardware and services is a crucial aspect of minimizing environmental impact. But these actions should be accompanied by broader IT infrastructure improvements.
Key improvements include consolidating data centers to reduce energy consumption, optimizing cloud transformations to leverage more efficient, scalable resources, and actively managing IT usage to eliminate wasteful consumption. Each of these steps not only contributes to sustainability goals, but also improves operational efficiency and cost-effectiveness across the organization.
Starting the Green IT Journey With Quick Wins
This initial phase is also an opportunity to identify quick wins. These can be as simple as updating default power settings, reducing data redundancy on databases, optimizing lifecycles of end-user devices, or blocking certain inefficient GHG behavior (e.g., sending large email attachments). These actions are easy and fast to implement, and often come with a positive ROI. While a single action might not have a tremendous impact, the sum of actions adds up and sets the tone for more thoughtful use of resources in the future.
4. Create a Roadmap and Establish Governance
Once your chosen actions have been defined and your levers for optimization have been identified, all activities should be mapped out on a timeline to ensure the defined NetZero targets are reached.
As part of this mapping process, a well-functioning approach to governance should be established, and a holistic roadmap will be needed to connect the dots. An effective roadmap will serve as a single overarching Net Zero implementation journey, one that integrates all implementation activities.
Our experience proves that to maximize the likelihood of success, there are several key success factors to be considered. A prime example is the creation of a GHG taskforce, responsible for the overall methodology, decentralizing responsibilities to dedicated workstream owners, and developing a dynamic and overarching communication strategy.
ActNow - 2030 is on the Horizon
As emphasized in this article, it is of paramount importance to holistically think through your strategy and targets when it comes to creating your own Net Zero roadmap. Not only should thorough analysis be carried out to inform your approach, but interim and long-term targets should be established separately to maximize efficiency and drive accountability.
With 2025 upon us and 2030 already on the horizon, now is the time to make meaningful progress and put sophisticated monitoring in place to ensure long-term success. Defining the right sustainability levers and creating a detailed roadmap to address them will drive both results and consistency.
With all this in place, your organization should be well-equipped to reach your emissions reduction goals. Start today by collecting your emission data and establishing a baseline to kickstart your Net Zero IT journey. As a result, you will be doing your bit to help close the climate action gap.
