Known for its rapid pace of innovation, the tech industry is undergoing limitless changes and exploring opportunities to embrace sustainable development.
With technological advancements becoming increasingly integrated into everyday operations, technology companies are now deeply embedding environmental, social, and governance (ESG) principles into their business to help individuals, society, and the world.
ESG initiatives are becoming mainstream as technology companies refine how they measure progress toward achieving their social goals while communicating positive values. The key is to embody and integrate these principles across every facet of the business with four critical approaches:
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Ensuring that all operations promote health and sustainability
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Protecting the environment by incorporating a low-carbon business model
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Enhancing the lives of millions via human-oriented innovations
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Engaging with companies throughout the ecosystem to promote common objectives
Environmental, social, and governance (ESG) practices are being designed to evaluate a company's influence across three critical areas. This swift progression of technological innovations leads to a growing necessity to develop and maintain vast amounts of data, escalating demands for limited technical resources.
Tech organizations are committing to ESG, thereby inspiring their workforce and customers to think, create, and believe in sustainable development. Building social responsibility is vital to support the entire ecosystem. Cutting-edge products and services with ESG values help change people’s lives.
The Current ESG Practices and its Limitations
While ESG practices are progressive, they are predominantly emphasizing the environmental aspects of sustainability. For technology companies, adopting a comprehensive approach encompasses the entire product lifecycle - ranging from sourcing to disposal. Traditional hardware lifespans are only three to five years old. Extending hardware longevity can help in reducing resource consumption. With a holistic perspective, tech organizations can address inefficient and resource-intensive applications running on the hardware to achieve effective technology consumption dynamics.
The proliferation of technology has further led to significant societal impacts, such as the exponential amount of data growth and inefficiencies of data centers. Technology companies need to consider the long-term effects of their actions on society from a climate and environmental perspective and introduce proactive measures to ensure socio-economic sustainability
However, many ESG practices are insufficient in fully tackling the sustainability hurdles inherent to the technology sector as they don’t specifically offer guidelines for computing power, memory, and bandwidth for data analytics and management.
Changing the mindset of technology workers will help further understand the impact of their actions and the costs that could be eliminated if the mindset was adopted at the higher levels and communicated throughout the company. To become truly sustainable, industry leaders need to foster a work environment that supports and encourages transparent discussions.
Read more: Corporate Sustainability Reporting Directive
How can Technology Companies Establish a True ESG Mindset?
ESG policies vary significantly as technology firms integrate ESG investing practices into their operations. Driven by stricter regulations, these organizations are integrating comprehensive ESG disclosures, encompassing their carbon footprint, data privacy policies, and workforce diversity.
Increasing awareness of climate change and diversity issues is pushing tech companies to broaden their ESG focus and change their mindset about sustainability. Technology companies are working on changing and improving ESG practices, which are largely influenced by investor expectations. While there has been a growing emphasis on transparency and disclosures, there is a growing focus on data privacy and security following high-profile data breaches.
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Pledge for Sustainability
The Sustainable Development Goals (SDG) offers a global framework for development and sustainability. Comprising of 17 goals, they aim to protect the planet and ensure peace and prosperity. Tech organizations are integrating SDGs into their strategies and aligning their technology with global goals. With SDGs, they can demonstrate their commitment to sustainability while promoting sustainable business practices and contributing to global development initiatives. Organizations are further working towards environmental sustainability by developing ambitious carbon reduction goals. The Corporate Social Responsibility (CSR) framework further enables organizations to deliver solutions that align with the SDGs.
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Implementing Green Coding Practices
There is a growing need for green coding to make data and data systems more efficient. By focusing on documenting efficient, optimized code, businesses can reduce the energy and resource footprint of their software. With a commitment to using certified green data centers, businesses need to pledge to incorporate green coding practices like efficient algorithms and data structures, thereby reducing redundancy and cloud optimization.
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Implement a Circular Economy Approach
Circular economy presents an economic model that helps in eliminating waste along with the continual use of resources. It helps to replace the conventional linear economy, which functions on a "take, make, and dispose" model, along with a closed-loop system that focuses on sharing, repair, refurbishment, reuse, remanufacturing, and recycling. This will equip organizations to create a more sustainable economic system. The circular economy approach is based on nature's cycles where nothing is wasted. Due to this reason, a circular economy benefits the environment as well as offers opportunities for innovative business models that can foster economic growth.
Read more: EU Sets a Global Benchmark with New “European Green Bond” Standards
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Introduce Employee Training and Awareness Frameworks
It has become imperative for organizations to educate their current as well as future developers on environmentally conscious technology design, starting with eco-friendly coding practices. Often, developers remain unaware of how inefficient code contributes to a larger carbon footprint.
Prioritizing energy efficiency has become paramount for organizations. Developers need to be incentivized to attain eco-friendly goals and reduce resource consumption while also minimizing their code's carbon footprint. Employees need to be encouraged to make informed decisions concerning the use of technology, disposal, and recycling. Companies are taking a step further and actively promoting sustainable living among their employees while also offering incentives for eco-friendly commuting, as well as implementing recycling programs, and educating their employees about their role in environmental sustainability.
ESG for Technology Sustainability
ESG practices across organizations vary significantly. Leaders across industries are implementing and promoting progressive ESG policies to incorporate sustainable practices. The variation can be attributed to different political landscapes, resource availability, and local attitudes toward climate change and social justice issues.
Many businesses are adopting ESG practices driven by stakeholder expectations and recognizing the long-term benefits of sustainable business practices to address ESG concerns for all companies, with particular attention to the requirements of companies and vendors for the technology industry.
To pledge sustainability practices, incorporate green coding, reward employees for their efforts, adopt a circular economy approach, and build significant practices into their DNA to train future generations with a new ESG mindset.
Read more: iRecycle, iReduce, iRevolutionize: Apple Introduces their First Carbon Neutral Products
Leading with Values
The changing world implies a growing need for tech companies to become greater leaders and thinkers than ever before. The technology sector is driving global innovation and leading to social and environmental responsibility. Tech companies today have the reach, tools, and mandate to lead from the forefront in building a better future. A mission-driven approach will assist every organization at every stage, ranging from product design to manufacturing, operations, and end users.
By embedding ESG principles in everything they do, organizations can meet their customers' evolving needs and seek new possibilities while achieving ESG-driven breakthroughs in the market.
SG Analytics, recognized by the Financial Times as one of APAC's fastest-growing firms, is a prominent insights and analytics company specializing in data-centric research and contextual analytics. Operating globally across the US, UK, Poland, Switzerland, and India, we expertly guide data from inception to transform it into invaluable insights using our knowledge-driven ecosystem, results-focused solutions, and advanced technology platform. Our distinguished clientele, including Fortune 500 giants, attests to our mastery of harnessing data with purpose, merging content and context to overcome business challenges. Apart from being recognized by reputed firms such as Analytics India Magazine, Everest Group, and ISG, SG Analytics has been recently awarded as the top ESG consultancy of the year 2022 and Idea Awards 2023 by Entrepreneur India in the “Best Use of Data” category. With our Brand Promise of "Life's Possible," we consistently deliver enduring value, ensuring the utmost client delight.
A leader in ESG Services, SG Analytics offers bespoke sustainability consulting services and research support for informed decision-making. Contact us today if you are in search of an efficient ESG (Environmental, Social, and Governance) integration and management solution provider to boost your sustainable performance.
About SG Analytics
SG Analytics is an industry-leading global insights and analytics firm providing data-centric research and contextual analytics services to its clients, including Fortune 500 companies, across BFSI, Technology, Media & Entertainment, and Healthcare sectors. Established in 2007, SG Analytics is a Great Place to Work® (GPTW) certified company and has a team of over 1100 employees and has presence across the U.S.A, the U.K., Switzerland, Canada, and India.
Apart from being recognized by reputed firms such as Analytics India Magazine, Everest Group, and ISG, SG Analytics has been recently awarded as the top ESG consultancy of the year 2022 and Idea Awards 2023 by Entrepreneur India in the “Best Use of Data” category.
