Many organizations are looking for new and creative ways to be more efficient and sensible with their resources. The mantra of “doing more with less as a corporate responsibility” is gaining traction, and ensuring that businesses are working in the best interest of all their stakeholders, including investors, employees, customers and community members, has become a priority.

Environmental, Social, and Governance (ESG) initiatives are the new norm in today’s connected world. These global efforts are not mere political statements – they are quickly becoming essential business strategies since companies are truly benefitting from both a financial and operational perspective. In other words, the goals for ESG extend far beyond the core beliefs and ideologies of corporate leaders.

Many of today’s initiatives and programs are helping organizations reduce expenses, generate additional sales and higher margins, and attract new investors and talent. Each of those benefits has the potential to elevate the value of the business in the eyes of stockholders, community members and employees. ESG is not merely a series of different compliance requirements that may vary by region, country and state but a new way to look at internal and external operations and evaluate their effects on people, the environment, and the bottom line.

Environmental Sustainability

The piece of ESG programs that often get the greatest attention from the general public involves resource conservation and alternative energies. As highlighted in the recently released GTDC report, The IT Industry Embraces Environmental Sustainability, these societal expectations (and government directives) can be viewed as both a responsibility and an opportunity for technology companies. Distributors, vendors, and IT service providers are already leading the way in these areas by reducing emissions, energy consumption and other resources while empowering the business community with similar capabilities.

Efficiency has always been a core value proposition of technology. Many of the current and proposed environmental sustainability objectives rely on process efficiency and innovative new solutions to automate and control various operations. For example, the IT channel can play a key role in delivering, implementing, and supporting more advanced lighting and HVAC (Heating, Ventilation, and Air Conditioning) management systems for large facilities. Minimizing energy consumption in warehouses and offices can significantly reduce a client’s carbon footprint, and the cost savings from those improvements can fund other environmental sustainability and IT-related initiatives.

Customer demand is another key factor driving these investments. Nearly three out of four (74%) organizations say that ESG is a ‘very important’ factor in organizational value today, according to IDC’s 2021 Environmental, Social, and Governance (ESG) Business Services Buyer Value Survey. Technology companies that fail to recognize and grasp these opportunities open the door for new or existing competitors willing to take on these challenges. Based on industry research, the market for environmental sustainability-related technologies, solutions and support is still in its infancy with strong growth projections.

As drivers in innovation, most IT distributors are already adopting and following best

practices from peers and vendors, including the extensive use of energy and resource-saving processes and solutions. Those organizations are also beginning to build out their line cards with charging systems and other applications to support their channel partners' environmental sustainability efforts.

Social Conditions Under the Spotlight   

Other activities that fall under the ESG banner include the organization’s commitment to diversity, health and safety, and community involvement and support. While publicly traded companies have disclosed their advances in those areas over the past few years, smaller businesses are increasingly being asked (if not required) to share that type of information.

From diversity and work policies to delivering safe products and services and contributing to responsible charities, people hold organizations to higher standards today, and those demands are sure to rise in the coming years. Prospective employees want to know more about working conditions and hiring/promotions policies. Potential investors and government officials are increasingly looking to companies to share details of safety and diversity programs and commitments to their respective communities. One goal of ESG reporting is to ensure that companies disclose all their possible liabilities and address each area of concern to minimize their risk profile.

Scrutinizing Controls and Policies

The final piece of ESG highlights a corporation’s decision-making processes and organizational structure (governance). Everyone wants to know that the companies they invest in, work for, and buy from are following prescribed ethical standards. From boardroom ethics and general management policies to auditing and compliance measures, current and prospective stakeholders expect businesses to adhere to sound business principles and controls. For example, organizations must be committed to accuracy and transparency with accounting procedures and investor relations.

Poor governance policies expose companies to unnecessary risks. While few businesses would intentionally perform or promote Illegal or questionable practices, without proper protections in place, the potential liabilities can threaten shareholder value, jobs, and the organization itself. Companies must assure stakeholders that the management team has established safeguards in place and effectively evaluates the impact of all of its plans and actions.

ESG is the Future

Tech companies understand the need and value of these evolving corporate governance programs. ESG initiatives are driving new solutions to improve efficiency, and the IT industry is in a position to benefit greatly from those global efforts. From internal adoption that strengthens the business operations of distributors, vendors and ITSPs to the products and services that help others achieve conservation and compliance objectives, these programs are driving new opportunities for the technology community.

ESG can be an empowerment tool for innovative IT companies. With consumers and investors driving demand for these programs and prospective employees watching closely, the value of solutions that help organizations manage and report on the status of these plans is rising rapidly. The IT industry is perfectly positioned to not only embrace these global initiatives but to advance the opportunities for businesses of all sizes (especially SMBs).