ESG Tops the Enterprise Tech Agenda

Summary Bullets:

• ESG is currently the hottest corporate topic with attention accelerated by the effects of COVID-19, but driven by customer, investor and value chain demand

• ICT companies are leaders in ESG, looking to reduce emissions, improve responsibility, and act ethically to win business and attract the best talent

ESG is everywhere at the moment, across all sectors and all over the global media. It is attracting the attention of governments and regulators, driving investment decisions, and becoming a key aspect of winning customers and the best talent. The challenge of ESG runs from the c-suite to vehicle fleet managers – it takes historical commitments to corporate social responsibility (CSR) to the next level and beyond.

Providers of enterprise ICT services tend to be ahead of the game in the broader market. All major players try to report as much as they can on environmental issues, whether that be: carbon emissions (environmental), volunteering, balance of staff by gender, ethnicity, orientation, disability (social), or publishing policies on discrimination, vendor selection criteria, etc. (governance). This will continue to grow in importance.

COVID-19 has acted as an accelerator of broader macro trends that include increased concern for the planet, responsible supply and value chains, new ways of working, and acceptance that all types of talent can make a valuable contribution, regardless of race, gender, sexual orientation, or disabilities. This in turn has led to a greater focus on how these strategic goals can be implemented through formalized corporate governance and cultural leadership.

Measurement is increasingly key to achieving these ambitions. Some companies have (rightly) been accused of ‘green-washing’ and ‘rainbow-washing’, especially when their environmental claims are unsubstantiated, or when they change their corporate LinkedIn logo to reflect global or national ‘X Day’ events. The momentum is towards deeper scrutiny and these ‘washes’ won’t hold water in the longer term.

Following COP26 in the UK at the end of last year, and the planned COP27 in Egypt later this year, governments are increasingly expected to adopt stricter sustainability goals. However, it is clearly a challenge during the pandemic era, with many larger emerging economies (most notably China) still heavily reliant on environmentally damaging sources of fuel and power to drive their growth.

Nevertheless, enterprises and their customers will drive continued progress in ESG initiatives, and regulation – both environmental and financial – and will play a growing role in delivering these goals at national, regional, and global (UN) levels. A credible, measurable ESG strategy (with growing emphasis on S and G) is no longer a tick-box; it is becoming a sine qua non of doing business in the enterprise space.

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