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The EU has introduced a Net Zero-focused regulation called the Corporate Sustainability Reporting Directive (CSRD). The CSRD, along with similar upcoming regulations worldwide, requires businesses to report on the environmental impact of their operations regularly.
These reports also need to cover the risks and opportunities to society, the economy, and governance.
As IT departments navigate these CSRD requirements, this article offers a clear guide to aligning IT operations with sustainability goals.
IT leaders will discover practical Green IT strategies, including adopting green software development practices, migrating to cloud environments powered by renewable energy, optimizing devices to reduce carbon emissions, and reducing E-waste. By developing sustainability roadmaps, integrating green procurement policies, and leveraging tools to track energy consumption, IT departments can ensure compliance with evolving regulations. At the same time, they can reduce operational costs, improve performance, and foster a culture of sustainability across the organization.
Effective from 2024, the European Union has introduced a new regulation designed to bring European and international companies in line with the EU’s 2050 Net Zero carbon emission goals. The Corporate Sustainability Reporting Directive (CSRD) legally requires companies to report annually on their carbon emissions, overall sustainability performance, and the risks and impacts their operations pose to people and the environment.
This directive is designed to accelerate the transition towards a fully green and sustainable future by requiring full transparency in sustainability reporting—a form of ‘carbon accounting’.
Carbon accounting, also referred to as “greenhouse gas accounting,” is a method used to calculate the carbon footprint of businesses, governments, and individuals.
It’s very similar to how financial accounting tracks monetary impacts. However, instead of focusing on financials, carbon accounting monitors the organization’s environmental impact by quantifying its contribution to climate change.
While the CSRD is a European legislation, similar legislation is being developed on a global scale, for example in the US, the Securities and Exchange Commission (SEC) is currently being implemented to provide investors with greater ‘climate disclosure’ from companies. Whilst, in the UK, the Sustainable Disclosure Regulation (SDR) does similar.
Additionally, non-EU companies active in the EU market that generate over EUR 150M annually will also be required to comply with the CSRD.
Of course, all the above goes beyond just the IT department and Green IT initiatives, but for the sake of clarity, we will focus on what the CSDR legislation means from that specific perspective.
The question I’ll try to tackle in this article is, what role will IT departments and software developers play in helping your organization comply with the Corporate Sustainability Reporting Directive, and where does green IT, and more specifically, green software development fit in?
The IT industry generates a huge amount of carbon. According to McKinsey, enterprise technology is responsible for emitting around 350 to 400 megatons of carbon dioxide equivalent (CO2e) annually, which represents about 1 percent of global greenhouse gas emissions. Although 1% might not seem significant at first glance, it’s about half the emissions from aviation or shipping and is comparable to the total carbon output of the United Kingdom.
When thinking about the carbon footprint of the IT sector, people tend to think that it is mostly composed of hardware and infrastructure. However, software has a big role, and it might be bigger than you first think. In fact, the development, maintenance, and deployment of software—i.e., the Software Development Lifecycle, or SDLC—consumes massive quantities of energy, whilst the quality of the software build, or even the technology that’s used to write source code, dictates how carbon-intensive an application will be to run.
Unless something changes, and soon, the ICT industry is projected to be responsible for a whopping 14% of our world’s carbon emissions by 2040.
The CSRD regulation is particularly relevant to IT departments because they are at the forefront of the climate crisis response—whether they realize it or not. IT professionals and software developers build systems that process vast amounts of data daily, positioning them to play a critical role in ensuring their organization’s compliance with CSRD carbon-reporting standards.
IT departments must prepare for clear, quality, accurate, and compliant CSRD reporting. As Forrester aptly puts it, investing in sustainability and measuring environmental impact is no longer just a choice for businesses, but a “matter of survival”.
While new regulations and legal reporting requirements may seem like an obstacle to your IT operations, there is an opportunity to align compliance with CSRD in a way that benefits everyone.
Green IT is an all-encompassing software development strategy and set of eco-friendly principles aimed at minimizing the negative impacts of IT operations on the environment. Green software development is an often overlooked, but critical part of that strategy.
The advantages of green software development go beyond improving sustainability metrics; they also enhance application performance, reduce costs associated with building and maintaining software, and increase job satisfaction for the teams involved in development.
CSRD reporting makes it a legal requirement to monitor and report on energy consumption, efficiency, and carbon emissions, it is also key to optimizing and perfecting your operations.
In other words, we must measure our environmental impacts so that we can improve them. This is key to the success of CSRD—that organizations don’t stop at merely reporting on their impacts but instead use their reports to drive improved sustainability across their operations.
Now that we’ve discussed CSRD in the context of IT and the role IT departments will need to play in compliant reporting, let’s take a closer look at what this role entails.
The Corporate Sustainability Reporting Directive outlines 8 key aspects that should inform the contents of annual CSRD reports by large companies. SMEs, on the other hand, will be asked to report against a tailored set of requirements currently out for consultation, expected in June 2026. Below are the 8 aspects mentioned.
IT departments should prepare for CSRD reporting by gathering data from their operations and organizing it under these 8 key headings. For more detailed guidance on each section and how to structure your report, we recommend seeking the advice of your legal team.
European Sustainability Reporting Standards (ESRS) establishes the specific metrics and contents organizations must use when collecting data and filing their annual CSRD report. IT departments must familiarize themselves with these standards before they begin collecting data.
The key to ESRS is the ‘Double Materiality’ principle, which requires companies to consider both the environmental impacts caused by their organization and the risks and opportunities incurred in a wider environmental, social, financial, and management context.
IT departments will have to report on their environmental impact regularly. This means, for example, measuring the energy consumption of their data centers, hardware, the carbon emissions of their operations, and the energy demands of software systems at each step of the SDLC.
A recent PwC report revealed that over 60% of organizations impacted by CSRD are already collecting key performance indicators (KPIs), and a similar percentage say CSRD requirements are influencing their operational decisions. This highlights how the directive is driving sustainability efforts in IT.
Below are some key strategies for IT departments to prepare for CSRD compliance through energy monitoring and carbon data collection:
Fundamentally, CSRD is not just another piece of corporate reporting regulation—it is primarily about reducing carbon emissions across Europe to the benefit of the planet.
For software developers, a green IT strategy that includes a focus on green software development is crucial for reducing your carbon footprint and complying with CSRD. We’ve written extensively on how green computing can guide IT departments toward a more sustainable, productive, innovative, and profitable future. Let’s take a brief look at a few core green IT strategies.
Of course, these efforts should go alongside other eco-friendly practices in the development process, including reducing energy consumption, minimizing waste, and using sustainable materials.
We would be remiss to move on before briefly discussing how another software development strategy—namely, Software Quality Management (SQM)—can also help IT departments comply with the Corporate Sustainability Reporting Directive.
SQM is a strategy encapsulating quality assurance, control, and planning—designed to help software developers build higher-quality, more efficient systems to the benefit of time-to-market, reduction in technical debt, reduced Total Cost of Ownership, and improved ROI.
Given much of what makes software so carbon-intensive is its inefficiencies, Software Quality Management can be paired with green IT as an effective strategy to monitor, report on, and improve your IT department’s carbon footprint.
Despite the challenges of CSRD’s technical complexity, the process of complying with this new piece of sustainability regulation can indirectly lead to greater innovation and positive digital transformation within your IT department and the company at large.
One example of this transformation is in the adoption of cutting-edge technologies, such as AI, and other software management tools to help you monitor and report on your carbon footprint. We’ve written more extensively on the tools available to you for energy-monitoring and carbon-measurement purposes, but have provided some examples below to give you an idea of what these tools are capable of doing.
Historically, sustainability and IT have not been terms that typically go hand-in-hand. For many software development firms, regulations like CSRD represent a significant shift.
As such, IT leaders are set to play an important role in leading the charge toward a more sustainable future for software development and computing. This may take many forms but will likely center around the reeducation and management of your IT department employees.
As a European IT company, CSRD requires you to report on energy consumption and carbon emissions as part of your journey toward Net Zero sustainability by 2030-2050. To comply, CIOs and IT leaders must establish realistic KPIs for reducing emissions, starting with current carbon measurements and setting annual (or more frequent) targets for emissions reduction.
One of the often unexpected challenges of implementing green IT or complying with sustainability reporting directives is the cultural pushback you may experience from your team. Without sufficient education surrounding the need for sustainable practices—nor the carbon impact of software development—developers may initially resist the idea of changing the way they work. It is up to IT leadership to change their minds by illustrating the benefits of green IT and green software development—not solely in environmental terms, but also in terms of job satisfaction, system performance, and profitability.
We are at the very start of green IT and the future of CSRD compliance. As software developers, we’re always looking to innovate, grow, and change technology for the better. Some future trends in sustainable IT and regulatory compliance are already beginning to emerge.
As Artificial Intelligence continues to improve, AI tools can be used to assess and gather vast quantities of sustainability data from across your operations.
Once they’re in place—just like those higher-quality and more efficient systems you’re building—they need only be scaled as time goes on to meet an IT organization’s CSRD-reporting demands.
AI systems built for this purpose can help optimize and automate reporting on sustainability so that it doesn’t detract from your other primary software development focuses. However, approach with caution, as behind AI’s brilliance lies an energy-intensive process with a significant carbon footprint.
Collecting and reporting sustainability data for CSRD may seem like a time- and labor-intensive activity; perhaps even one that detracts from your IT department’s main focus (namely, building systems and applications).
Yet, as we’ve demonstrated throughout this article, CSRD reporting already goes hand-in-hand with Green IT practices, which are themselves a necessary and beneficial part of the future of software development. As such, you can seek to futureproof your organization by baking sustainability metrics into your everyday IT operations.
The EU’s Corporate Sustainability Reporting Directive (CSRD) is already in effect, requiring large companies operating in or registered in Europe to report on their carbon footprint, their sustainability policy, and the impacts, risks, and opportunities arising from their carbon emissions. In June 2026, industry-specific regulatory requirements will reach SMEs.
For ICT companies and software development firms, IT departments will play a pivotal role in complying with these new regulations—not only because they are well-equipped to handle vast amounts of data but also because their operations contribute significantly to greenhouse gas emissions, both from the hardware and software perspective.
Green IT achieves carbon reduction through a variety of means, from the implementation of green coding practices and AI automation to migrating to the cloud, eco-conscious vendor management, and adopting sustainable frameworks.
The future of sustainable IT is now, and it is up to IT leaders to guide their teams and organizations through the transition to a Net Zero future.
A digital representation of the Earth surrounded by lush green leaves and eco-friendly technology circuits, symbolizing the concept of Green IT and sustainable computing practices for reducing the environmental impact of technology.
Author:
Head of Innovation
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