How Important is Sustainability to Global Tech Companies and Their Employees?

Leaders place greater value on sustainability than managers lower down the hierarchy.

It’s estimated that information and communications technology (ICT)/computing is responsible for more than 2% of global greenhouse gas emissions. Perhaps significantly more. Sustainability therefore presents a huge challenge for the tech sector and some of its leaders have been very vocal on the issue.

Google CEO Sundar Pichai described combating climate change as a “foundational value” while observing that it is the number one concern for young people. And when talking of Apple’s ambitious plans to make its entire business carbon neutral by 2030, CEO Tim Cook warned, “The planet can’t wait.”

That’s the view from a couple of tech titans, but the big question relates to what’s actually happening on the ground throughout the sector. Just how important is sustainability to global tech companies and their employees?

iResearch Services conducted a study of 550 executives in the technology industry in the lead-up to COP26 in late 2021, surveying leaders across 11 countries. The resulting ‘How Sustainable is Tech?’ report shows that some tech organizations are not nearly as green as they would like to be, in part because sustainability is not as high a priority as one might imagine. Even though tech companies have been among the most high-profile champions of improving sustainability.

Attractive employer brand

Without question, people want to work for companies with a sustainable approach. And many tech companies seem to fit the bill, for instance by making claims that technologies such as cloud computing, data analytics and artificial intelligence (AI) can help organizations cut carbon emissions, model climate change, improve transparency and reporting, and work out new ways to create positive change.

Their research finds that 89% of employees globally rate sustainability to be important when choosing a new employer. In China, 98% of employees surveyed believe this, followed by 94% in Japan and Australia and 92% of employees in the US.

Sustainability and corporate performance

58% of respondents take the view that employees will work harder for a business they believe is operating sustainably, giving credence to the much talked about link between authentic sustainability credentials and corporate performance. This opinion is most prominent in India (78%), followed by China (68%) and the US (66%)

But (and we suspect you realised a ‘but’ was coming!) inside companies, there are noticeable gaps between their aspirations and the true situation when it comes to sustainability. For a start, CEOs are dissatisfied with their companies’ sustainability efforts. There is a noticeable difference between the importance they give to sustainability (80%) and how happy they are with the overall level of sustainability at their companies (65%). It’s clear that closing this gap will require a strong focus and plenty of hard work.

Differing attitudes to sustainability across the organization

Secondly, while leadership places a high value on sustainability, once you move a little further down the corporate tree, it’s a somewhat different story. Company directors rate the importance of sustainability at 88% and appreciate there is still room for considerable improvement, putting their company’s current situation at 71% – a difference of 17%.

However, operations managers, who by definition are at the heart of making things happen within the business, have the lowest personal opinion about the need for sustainability in our survey findings at 55%. Interestingly, that’s lower than their perception of how sustainable their company is (60%). Core program managers have a similar personal opinion about sustainability (56%) compared to their perception of the level of sustainability in their companies, which is even higher at 74%.

What does this signify? It might be argued that these groups are too busy day-to-day addressing the specific, often high-pressure demands of their roles to give sustainability a huge amount of thought. Nevertheless, given how much progress is still to be made in this area, it’s a cause for concern that they perceive their employers’ commitment to sustainability as exceeding the value they personally attach to it. With such a mindset, they are unlikely to push for their companies to up their game in the sustainability stakes. All of which is strikingly at odds with the high importance employees attach to a sustainable business when job hunting.

Building belief among middle management – the power of communication

Perhaps tech companies need to invest more in thought leadership and internal communications campaigns that articulate the importance of sustainability and are honest about the current state of play, even where that falls significantly short of the ideal. Greenwashing is unacceptable and those companies that are tempted to embark on such an ill-advised route are going to find it catching up with them commercially. After all, we live in an era where ESG credentials are coming under ever closer scrutiny and are increasingly being considered as a fundamental indicator of the company’s health – particularly where investors and shareholders are concerned.

The fact that the majority of tech companies surveyed said it is important to be viewed as a sustainable and ethical brand (89%) comes as no big surprise with this in mind. However, surprisingly, this dropped to 80% of US employees. In other words, 20% of US respondents felt it is not important to be seen as sustainable and ethical. A considerable concern regarding global sustainability efforts and coordination across countries.

Why might this be the case? Does it reflect a non-ESG-friendly policy hangover from the Trump Administration? This is certainly something we have encountered in our research into sustainability in other business sectors, notably in the Financial Services sector.

The expectation is that over time there will be a decrease in the number of US employees who are unconcerned about being sustainable and ethical. Firm commitments made at COP26 and the rollout of new regulatory frameworks will have a positive impact on attitudes and action alike, as will the lead that has already been taken by some of the most prominent companies in the US tech sector.

Best for the planet and best for business

There is a distinct upside to sustainability beyond what’s right for the planet. iResearch Services aggregated data shows 52% of all the technology companies surveyed expect more customers from being sustainable and 38% anticipate better returns.

The smart money says they’ll be proved right.