Technology Portfolio Management (TPM) Best Practices

Overview

Sustainability and ESG considerations are not a separate evaluation track that runs parallel to the technology assessment framework. They are a dimension of every technology assessment, informing both the primary dimension scores and the Strategic Disposition assignment in ways that are specific to the environmental and governance profile of each technology category. A cloud service whose provider operates on entirely renewable energy in all deployed regions carries a different sustainability profile than one whose provider operates predominantly on carbon-intensive energy. A hardware vendor with a demonstrated circular economy commitment to product refurbishment and responsible recycling carries a different profile than one with no such commitment. These differences are material to the organization’s sustainability governance and should be reflected in the technology assessment.

Best Practice

Include a Sustainability and ESG Score as a standard secondary dimension in the technology assessment framework, applied to every technology in the Technologies Inventory family with criteria calibrated to the technology category. For hardware technologies, the Sustainability and ESG Score should assess: the energy efficiency of the hardware relative to equivalent alternatives; the manufacturer’s circular economy commitments, including repairability, refurbishment programs, and take-back provisions; the environmental certifications held by the manufacturer and the specific hardware line; and the organization’s ITAD plan for eventual retirement of the hardware. For software and SaaS technologies, the score should assess: the vendor’s published sustainability commitments and reporting; the energy efficiency of the software platform relative to equivalent alternatives; and the carbon intensity of the infrastructure the software runs on. For cloud and infrastructure services, the score should assess: the carbon intensity of the cloud provider’s data centers in the regions the organization uses; the provider’s renewable energy commitments and current renewable energy percentage; and the availability of carbon-aware workload placement capabilities.

Use the Sustainability and ESG Score as an input to Strategic Disposition decisions for technologies where sustainability considerations are material. A technology with an unacceptably low Sustainability and ESG Score that also serves a strategic capability may warrant a Move-Away Strategic Disposition if a more sustainable alternative is available, or a Sustain disposition with a defined timeline for migrating to a more sustainable alternative as the market matures.

Benefit(s)

Including the Sustainability and ESG Score as a standard technology assessment dimension ensures that sustainability considerations are integrated into every technology governance decision rather than evaluated separately in a process that has limited influence on technology investment and rationalization outcomes. Technologies with poor sustainability profiles are identified and their profiles are weighted in governance decisions. Technologies with strong sustainability profiles receive appropriate credit in the assessment, creating incentives for vendor and technology selection decisions that advance the organization’s sustainability commitments. And the sustainability dimension of the technology assessment produces the data that connects individual technology decisions to the aggregate sustainability reporting obligations of the enterprise.