What can we learn about ESG from the biggest IT vendors? ESG brings new market opportunities as well as corporate obligations.
The ESG reports from IBM, Cisco and HPE are long. Cisco’s ESG statement has 58 pages, IBM’s has 59 pages and HPE presents 91 pages. ESG is a giant with many limbs to cover. Whether these documents are for customers or investors they are heavy to read and digest. If you are looking for facts about a company’s journey to Net Zero, the information will be hidden in the reports along with everything else.
I was glad to see that IBM has set a bold goal, to reach Net Zero by 2030. Cisco aims for Net Zero by 2040 and hopes to achieve this by reducing Scope 1, 2 and 3 emissions by 90%. HPE also aims to reach Net Zero by 2040 and is asking every team member to work towards sustainable business practices.
Besides enhancing their products to become more energy efficient and environmentally friendly, all three vendors are marketing products to help their customers to hit their sustainability targets. I was interested to see what else these large vendors are reporting.
IBM’s 2022 ESG Report leads with a statement about the ethical use of AI. AI is a high priority for IBM as they have much invested in Watson. IBM’s ESG activities are large scale and high profile. They report a multitude of activities in all aspects of ESG, including thousands of energy conservation and community projects. 75% of IBM’s energy is to be from renewables by 2023 and they are reducing their use of water and sponsoring pollinator gardens.
A few interesting facts stand out from the numerous good projects that are listed. IBM was the technology partner to COP27, an ideal marketing platform to show Envizi, their product for ESG reporting. They are also a founder member of the Responsible Computing Consortium.
IBM has Mental Health Allies as part of their employee wellbeing programme and promotes volunteerism which raised funds for the 2022 earthquake in Turkey.
Cisco’s Purpose Personified Report also identifies AI as a top concern and counters this with their involvement in the Responsible AI Framework.
They point to the fact that they were named as number three in the list of the World’s best places to work and that they are sourcing 89% of their energy from renewables. The Cisco Foundation has already given $11 million to fund climate solutions.
Much of Cisco’s report emphasizes how their products are becoming more environmentally friendly and are being used for the common good. For example they support hybrid working and smart energy-efficient buildings. Cisco commits to using 50% recycled plastic in their products, less foam in packaging and moving towards more circular design.
Webex cuts the emissions from business travel and Cisco is enhancing it with better security and controls.
Cisco’s Country Digital Acceleration Program (CDA) is combatting the digital divide through 1100 completed projects in less developed countries, installing broadband in schools and colleges in the USA’s largely black areas. Cisco is supporting conservation with projects that track endangered species, supports non-profits in their disaster response work and is teaching digital skills through the Cisco Networking Academy which encourages girls in technology and promotes careers in STEM.
I was glad to see that Cisco’s Global Problem Solver Challenge awarded $250,000 to a team in Kenya to develop a solar-powered refrigerator to store vaccines. And I like the fact that they offer three days off for grandparents, to enjoy the special time when a child is born.
HPE’s recent Living Progress Report 2022 also goes straight to the responsible use of AI. It stresses how AI can be used to counter the carbon footprint of technology and promote sustainability.
HPE’s style is more technical than the PR-speak of some others and possibly more transparent. They share the fact that their emissions from logistics have actually increased due to the shortage of available ocean shipping.
Like IBM and Cisco, HPE offers products to help sustainability: the Greenlake platform monitors energy consumption and measures carbon footprints and the Optera platform helps suppliers to streamline their accounting for GHGs.
All tech companies must communicate improvements
One outstanding fact emerges from exploring these ESG statements. All three vendors put their concerns about AI right at the forefront, it’s a top priority along with GHGs.
Much of the information communicated in these ESG statements is very familiar. All businesses should look to reduce their energy consumption and move to renewables. All organisations with datacentres should plan to upgrade to the latest servers and cooling equipment to become more energy efficient. They can use techniques like hot and cold aisle containment to save energy and reduce running costs. Similarly, all businesses should adopt smart building technology to avoid wasting energy on heat and light buildings when their premises are empty.
Companies that sell products should build energy efficiency into their designs, incorporate recycled materials and use less packaging.
None of this is new to a modern business. Therefore the real purpose of ESG reports is to show how an organisation is moving towards ever more sustainable, ethical and egalitarian goals.
When it comes to making statements about ESG policies, the subject has become huge so it will be best to explain the topic in clearly identified parts. These could be:
- Ethical business practice
- Diversity in governance, sourcing and recruitment
- Reducing GHG emissions
- Use of energy and renewable energy
- Use of water
- Non-conflict minerals
- Hazardous waste
- Recycled plastic in manufacture
- Reducing packaging
- Human rights
- Investment in training
- Support for STEM
- Employee wellbeing
- Community activities
- Charitable work
- Data privacy
- Cyber security
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