Sustainability slowly creeping up list of business priorities
More than a third of channel and IT professionals say their company has no environmental, social and governance (ESG) strategy, while sustainability remains a distant fourth when it comes to procurement. This is according to the latest TechBeat survey on sustainability conducted in association with DataSolutions.
The poll of 105 IT end users and 77 channel professionals carried out in August 2021 found broad agreement on the position of sustainability and the likelihood of achieving ‘Net Zero’ carbon emissions ahead of the government’s target of a 51% reduction by 2030.
However there appeared a disparity when it comes to the awareness of ESG strategies. Despite 38% of all respondents saying their companies did not have one in place, there appeared a stark divide between channel and end user participants – full 62% of channel respondents saying they were aware of their business’ efforts compared to 43% of end users, an alarming 18% of which having no idea at all.
Commenting on the results, Michael O’Hara, group managing director at DataSolutions and one of the founders of the Techies Go Green movement, says these figures are not surprising. “Since launching Techies Go Green last March and talking to Irish businesses who signed up as members of the community, it quickly became clear that a lot of organisations are only starting out on their sustainability journeys,” he says. “I think 2021 has been the year of realisation for many companies in terms of ESG strategies and objectives. While there is still a substantial proportion of organisations that don’t have a plan in place, the important thing is that business leaders are becoming more educated, having these discussions and taking action.”
On the subject of companies going to ‘net zero’ emissions there is a slight variation, with 45% of channel and 39% of end user respondents saying their company has no plans to achieve that target. “A major issue is the lack of awareness and education on how to get started on the net zero journey,” says O’Hara. “Any business looking to make their operations more sustainable and achieve net zero can get paralysed into inaction due to the mountain of information and negative commentary around climate change.”
He continues: “It is not easy to produce a plan and the reality is that it will take years for the vast majority of businesses to achieve net zero. However, the answer is continual education to build awareness and training geared towards companies. This will help a lot of organisations to get started and establish a strategy.
“Working together and sharing knowledge – what works and what doesn’t – is another element that could really benefit those who don’t necessarily know where to begin.”
Looking towards the factor most affecting how channel businesses select suppliers, sustainability comes a distant fourth (10%) in comparison to price (78%), performance (also 78%), and cost savings (62%). While respondents expect this positioning to remain unchanged in two years, respondents said sustainability would be considered ‘highly important’ by almost a third (29%).
“This finding shows the growing awareness and importance around sustainability over the coming years,” says O’Hara. “It is noteworthy, even in the last seven months since we launched Techies Go Green, how much attitudes are changing due to people getting a better understanding of how serious an issue sustainability is and their role in the fight against climate change.”
For end users the poll looked at attitudes towards IT procurement strategy. Using similar metrics as the channel, the majority respondents said sustainability was currently a ‘middling’ consideration (48%) where price (53%), performance (50%), and cost savings (42%) were considered ‘highly important’. While this trend is expected to continue over the next two years, sustainability will move from its position in the middle rank to move to an area of ‘high importance’ for almost half of participants (48%).
O’Hara notes that this presents a challenge to vendors as end users take a broader perspective of their environmental impact. “Some vendors are responding quicker than others, but more work needs to be done by everyone in the industry,” he says. “If a reseller doesn’t like the service it is getting from its distributor or a corporate client doesn’t like the service it gets from its reseller partner, it can always pick another supplier. And increasingly, sustainability will have a larger influence in these decisions – which means vendors will have to be proactive in this space.”
O’Hara takes the example of Microsoft as one vendor that is making great strides in its drive to become carbon negative by 2030. “Vendors like Microsoft can really drive sustainability through their supply chain (which includes 500k partners) and because these partners have a vested commercial interest in Microsoft, they will be influenced by its strategy around sustainability. That’s a very positive thing. Microsoft is just one vendor, but every vendor has a similar role to play,” he says.
On the subject of the government’s aim to achieve a 51% reduction in CO2 emissions by 2030, half of end users reported feeling ‘some pressure’ to adhere to this target. O’Hara feels this target is achievable. “If you take that longer view of nine years,” he says “it is very doable compared to trying to effect major change in just two/three years. Just look at the evolution of smartphones or social media companies like LinkedIn, Facebook, and Google over the last 10 years. Anything is possible but again, it is crucial to educate yourself and develop a plan with set goals.
“I also think corporates need to set sustainability as one of their ‘top three goals’ and treat it as they would any other business objective, like revenue growth or sales KPIs. When it comes to one of the top three business priorities and it is regularly being discussed at board meetings or during company updates, it is more likely to get done. Communicating the strategy across the entire organisation and to every member of staff is also beneficial as people know their role and the overall aim.
“My other piece of advice for businesses on their sustainability journey is to keep going and remember that every bit of progress is important progress. If an organisation can reduce its CO2 footprint every year up until 2030, they should be able to achieve at least the 51% reduction.
Only 34% of channel respondents said sustainability would be a growth driver for their business over the next 12 months, and only 13% say it will play a significant role in any economic recovery. O’Hara admits to being surprised by this finding.
“I would disagree with the consensus on this issue,” he says. “Climate change and sustainability will have the biggest impact on all our lives over the next decade – both personal and professional. Therefore, it’s inevitable that it will impact on things like customer retention, business growth and product development.
“As customers look for greener providers, organisations will have to meet this demand and make changes to stay competitive. In turn, it presents a huge opportunity to take advantage of the growing investment, awareness and requirements in the whole area of sustainability. The trick is getting out in front and being a leader – this will differentiate, and ultimately benefit, companies.“
Finally, TechBeat looked at the factors standing in the way of making more progress on ESG. End users reported a lack of green alternatives (47%), a focus on short-term problems (42%) and cost (40%) as the chief barriers. O’Hara takes a slightly different view: “The biggest barrier is resistance to change. Humans don’t like change, especially when we have established business practices that have worked well for years. However, change is necessary, and it can often – if approached in the right way – be positive. We all need to play our part in this particular journey, and I’m confident that we will get there over time.”