Why ESG is driving the tech investment agenda
Sujata Kukreja
General Counsel, Chief Compliance Officer & Company Secretary
With the COP28 climate summit just around the corner, now is an opportune moment to reflect on the progress made in the tech industry over the past few years. Expereo’s own research - Enterprise Horizons 2023 - revealed that enterprises’ emerging tech investment decisions are increasingly driven by sustainability and ESG goals, which is a positive step in the right direction. The truth is that ESG is no longer just a consideration or box-tick exercise for business leaders, but a matter of real significance right across organizations, from board level to IT departments.
In fact, our latest research found that nearly a third (31%) of CIOs across the globe believe ESG and climate change to be the factor most influencing their attitude towards technology investment in 2024. Other factors such as changes to ways of working (28%), increasing supply chain issues (27%) and security risks (27%) – as important as they are – are all cited as less significant than ESG and climate change when it comes to technology investment in the next 12 months.
The report gathered the views of over 650 global CIOs, representing organizations across Europe, North America and Asia. While the findings revealed a slight regional discrepancy – with 32% of CIOs in both Asia and the US believing ESG to be the most influential factor, compared to 29% of CIOs in Europe - ESG remains a dominant factor helping to shape organizations' strategies for technological investment at present and into the new year.
The reasons for this are clear.
Investors in public and private markets are seeking more information than ever related to climate risks that affect the companies they invest in and own. The days of companies implementing ESG measures for the sake of it are (or should be) behind us, thankfully. In fact, significant progress in both practical terms and in attitudes have shifted significantly in recent years. So much so that companies without formal ESG frameworks or stated objectives in place are now likely to find themselves missing out on vital funding and potential additional investment opportunities.
But how has increased focus from investors on ESG credentials translated into the actions CIOs are taking to ensure their investments into technology infrastructure are ESG compliant?
Well, CIOs are increasingly taking a much closer look at all potential vendors they are partnering with. If it turns out that a company has partnered with a vendor that does not value or set out ambitious sustainability targets - this could have a knock-on impact on its own reputation, investment targets and ultimately future prospects. And this is not just in terms of environmental standards and values: but social and governance ones too.
At Expereo, we’re proud of the steps we’ve taken as a business to become a more sustainable, equal and inclusive employer. At the same time, we have formal governance structures and a code of conduct in place to maintain the highest regulatory and ethical standards. This is alongside the significant measures we’ve taken to decarbonize our operations – with over 86% of the data centers we use being green. Our employees are also delighted with the tree planting initiative we use for our internal engagement with over 1500 trees planted since the start of the year! And we see more and more businesses are enacting similar plans.
This now means that when organizations are seeking a new tech vendor; whether it be an inventory management software, a customer relationship platform, or a new networking solution; they will likely only partner with a business that shares their own standards and values - and is willing to continue pushing the boundaries for change.