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Pressure continues to ratchet up as the world looks towards business leaders to help tackle climate change. Two new UK laws came into force last year mandating ESG reporting for all listed companies with over 500 employees or annual turnovers exceeding £500 million. Europe is following suit by extending the Non-Financial Reporting Directive (NFRD) to meet new standards, while last year, the US Securities and Exchange Commission proposed climate-risk disclosures that expand annual reporting requirements for publicly traded companies.
The financial stakes are ramping up too. Customers are applying increasing pressure on organisations to sustain their ESG performance, and 42% of companies are feeling the weight from shareholders. Investors are voting with their feet and wallets – almost half (49%) say they will divest from companies they believe are not taking sufficient action to tackle climate change.
There’s renewed focus across all industry sectors to tackle climate change. Companies in 166 countries have signed up to the UN Global Compact, calling on firms to align their strategies and operations with global goals. There’s a clear drive for business leaders to take action to make a real difference. Carbon offsetting no longer cuts the mustard and is increasingly discredited as a form of greenwashing. Firms are now expected to provide clear, incontrovertible proof of the benefits of their ESG policies.
Smart IT choices hold the key
Fortunately, there are a number of steps businesses can take to accelerate change - and IT teams hold the key.
Although many companies are now well-versed in environmentally-friendly measures such as recycling schemes and switching to renewable energy providers, other operational areas often lag behind. It’s all too common for organisations to be operating power-hungry PCs that do not maximise renewable energy sources. Many businesses do not realise that enterprise IT is a huge generator of CO₂, generating 1% of global emissions – that’s equivalent to half the emissions from aviation and shipping worldwide and equal to the total produced by the whole of the UK.
Change starts within. Tackling climate changes requires businesses to adopt new mindsets, more efficient working methods and smarter solutions.
Practical IT strategies for boosting ESG performance
Business leaders have the potential to make a tangible difference to their company’s environmental impact through smarter IT choices.
Adoption of Desktop-as-a-Service (DaaS) is one way to contribute to ESG targets. VDIPOD, for example, is a purpose-built VDI platform hosted from data centres operating on 100% renewable energy. It provides firms with metrics and an audit trail to simplify ESG reporting. Organisations using this solution use 81.7% less energy with an 89% renewable power model at source (one VDI server supporting 60 laptops/thin clients) and CO₂eq reduction of up to 43%1 compared to traditional workstations.
Since migrating over 400 employees to VDIPOD, a multi-award-winning architecture studio has already achieved a three-fold increase in renewable power use and a 90% reduction in kilowatt hours per person.
Although the cost of implementing a green data centre on premise is unviable for most companies, IT teams can still make wise environmental choices about where to host their data and services. With public cloud hyperscalers increasingly under fire for under-used resources and poor environmental controls, smaller cloud providers may be a consideration. Creative’s private cloud solutions are hosted from Equinix-powered data centres, which operate on 100% renewable energy. The company’s data centres are optimised to achieve a power usage effectiveness ratio (total energy used versus energy delivered to IT equipment) of c.1.2 versus an industry average of 1.8.
Global engineering company SNC-Lavalin is working with Creative ITC to reduce its global data centres from 16 to three. "One of the biggest benefits we've already seen in our carbon footprint is we've reduced storage by 69%, electricity by 53% and floorspace by 45%," said Steve Capper, Group CIO of SNC-Lavalin.
Transitioning to an Infrastructure-as-a-Service (IaaS) model is another step IT teams can take towards net zero. With fully-managed IaaS, infrastructure responsibility, power consumption and carbon footprint move to the service provider. IT teams can reduce energy consumption, cooling costs and waste from decommissioned equipment. Cloud providers can also boost firms’ ESG scores by using containers and virtual machines.
When looking to engage an MSP providing new sustainable technology solutions and futureproof IT infrastructures, be sure to scrutinise their ESG credentials and industry experience to ensure you unlock the greatest value and achieve the greatest impact on sustainability goals.
Unlocking business benefits
With a growing body of evidence that clearly links corporate ESG initiatives to value, higher profits and new growth opportunities, no business or IT leader should view investments in sustainable practices as ‘nice-to-have’. Along with proof of operational and financial gains, sustainable firms are shown to outperform their peers on EBITDA and profitability through increased productivity, top-line growth and lower operational costs. These organisations are also better placed to take increasingly stringent regulatory reporting requirements in their stride. Other benefits for publicly owned companies include reduced downside risk, greater equity returns and improved credit ratings.
As climate concerns grow more urgent, business and IT leaders should keep these benefits front of mind and leave no stone unturned to transform their operations for the better. Future success – for their firm and the planet - depends on it.