The Transition Towards Net-Zero Emissions: Implications for Banks and Their IT Strategies

Abstract: In response to the ever-intensifying urgency for environmental preservation, the imperative for sectors with substantial carbon footprints to adapt and drive the transition to a low carbon economy is apparent. Sustainability transitions, signifying systemic changes towards sustainable socio-technical systems, emerge as critical in this context, especially within the banking sector. This industry, anchored by its pervasive Information Technology (IT) infrastructure, stands as a key actor in the paradigm shift towards global sustainability. This study investigates the implications of the global transition towards net-zero emissions by 2050 for the IT strategy of banks. This transition necessitates significant changes in the banking sector’s practices, with a particular focus on reducing energy consumption and promoting sustainable operations. The paper presents an in-depth investigation of the factors that banks need to address when adapting their IT strategy to align with these imminent changes. The research methodology followed a qualitative research design, with semi-structured interviews conducted among banking sector practitioners serving as the primary data collection method. Additionally, the study applied the Technological-Organizational-Environmental (TOE) framework to analyze the adoption of sustainable practices in the banking sector. This framework allowed for a comprehensive understanding of the multifaceted nature of the transition towards net-zero emissions, considering the intertwined aspects of technology, organization, and environment. The findings of this research reveal significant insights into the key drivers and strategies required for banks as they make decisions about their IT strategies, particularly in response to the transition towards net-zero emissions. The urgency of environmental sustainability and its integration into strategic planning have emerged as primary drivers, leading to the adoption of Green IT for balancing operational efficiency with environmental responsibility. This strategy has influenced banks’ responses and adaptation by prompting introspective resource management, integrating sustainability into organizational culture, and shaping an environmentally conscious workforce. In conclusion, despite facing various complexities, banks are demonstrating resilience and adaptability in their transition towards sustainability, indicating a future of continuous innovation and transformative practices firmly rooted in sustainability. The findings from this research significantly contribute to the existing body of knowledge, offering deeper insights into the interplay between banking practices and the urgent transition towards net-zero emissions. Future research could further enrich this understanding byassessing the effectiveness of banks’ sustainability initiatives, their achievements against set sustainability targets, and the evolving role of Green IT in driving sustainable banking.