Lens five: Accelerating towards sustainability
As consumers, governments and investors demand greater environmental accountability from companies, going green has gone from being optional to a business imperative. Technology will present both challenges and opportunities in the drive to embed sustainability in more activities and practices.
Through the Looking Glass
The push for sustainability — using natural resources that are renewable, or in a way that will not lead to their depletion; reducing the ecological footprint of the business; and avoiding contributing to outcomes such as global warming — is gathering unprecedented momentum in political, economic and market circles. Making sustainable choices is something an increasing number of consumers do as a matter of course, and businesses are incorporating sustainability considerations directly into commercial strategies.
Technology is a major contributor to climate change and most tech companies are attempting to address this, whether by building energy-efficient data centers, adopting renewable energy sources, analyzing their vendors and supply chains, or developing applications that consume less in both their creation and ongoing operation.
Technology can also help make our everyday lives more sustainable, by for example supporting smart cities that optimize traffic to reduce pollution. The move to a sustainable world is accelerating, and the trend has wide business implications.
The growing emphasis on sustainability emerging in government policies, for example in the Build Back Better Framework, the UK Green Financing bonds, or in the wake of the 26th Annual Conference of the Parties — COP26.
The increasing prominence of environmental, social and governance (ESG) standards within organizations, and the movement of funds into ‘ethical’ investments and away from companies that pollute or have a negative sustainability posture
A growing focus on supply chain analysis to identify opportunities to reduce energy intensity and emissions throughout the production cycle, and more consultancies and solutions emerging to support this process
Technology providers proclaiming their ‘greenness’ or other sustainability characteristics
- Organizations adopting ambitious carbon neutral or similar environmental impact reduction pledges. For example, HP announced an extensive lineup of climate goals in its quest to become the world’s most sustainable technology company. Equinix has set itself a target of becoming climate neutral by 2030, a first for the data center industry
Consumers want to feel good about their impact on the world and will increasingly factor sustainability into their decision making when choosing a brand or supplier. That will require businesses to examine the environmental costs of their products and operations, and adopt more sustainable strategies and technologies in response. Rather than a box-ticking or compliance issue, sustainability should be understood as a contributor to business goals. Choosing to understand and invest in sustainability through supply chain analysis, simulation and selection can increase profits through more efficient processes and can be a win-win for a business’s bottom line.
Sustainability has also gained considerable momentum in equity markets under the ESG banner, with many major investors and portfolio managers instituting ESG targets or requirements. Based on analyst projections, ESG assets are expected to make up more than one third of total assets under management globally by 2025. Green credentials can therefore ultimately enhance a company’s market valuation, competitiveness and ability to attract quality investment.