Opportunities and Challenges for Becoming More Sustainable in the Tech Industry: Part One

Technology industry can achieve more sustainability success, says webinar panel

The technology industry has been moderately successful in adopting sustainability measures, and industry experts are optimistic it can achieve even more over the next few years.

Sustainability measures not only benefit the planet by reducing carbon emissions, but they can help improve business efficiencies and profitability as well.

These are some of the key points following on from the webinar, Opportunities and Challenges for Becoming More Sustainable in the Tech Industry, hosted by Thought Leadership specialist, iResearch Services.

Guest panellists

The hour-long live webinar features guest panellists, Bruno Sarda, Principal of Climate Change and Sustainability Services at EY, Alexandra Nicholson, Senior Director of Social Media and Impact at Pegasystems, and Emanuel Kolta, Senior Analyst in GSMA Intelligence’s consulting team. It was led by iResearch Services’ Editor in Chief, Rachael Kinsella.

Some of the main subjects covered in the webinar are:

• How technology can lead the way in sustainability
• The main challenges and opportunities
• Tech for good
• Supply chain solutions
• The power of partnerships
• Barriers to success
• How to combat greenwashing.

How Sustainable is Technology? report

The webinar complements a new report from iResearch Services, How Sustainable is the Technology Sector? (releasing 2 Aug 2022), which reveals the views of 550 industry executives in 11 countries on the important issues.

In an instant poll to kick off the live webinar, participants were asked how sustainable the tech industry is overall and most agreed it was moderately sustainable.

Can technology lead the way in sustainability?

In the How Sustainable is the Technology Sector? report, CEOs face a ‘perception gap’ between how important they believe sustainability is (80%) versus the level of contentment with the progress of their companies (65%). The panellists were asked if this is an issue for the industry and whether technology can lead the way in sustainability.

Bruno raised that while technology has been at the forefront of early adoption and has moved in the right direction – for instance, in the use of green energy – other issues have been more difficult to solve, including waste and the ‘repair gap’, which refers to parts becoming more technologically advanced, smaller and harder to replace.

When thinking about technology, firms often focus on how they operate a sustainable business and what they sell, says Alex. “They are trying to solve really complex issues out there and sometimes what is happening in their own house is a little bit harder to quantify.” So, there is room to grow and room to improve.

Thinking of technology firms in the telecom sector, Emanuel discussed there is huge pressure to meet sustainability targets and commitments, but the mobile industry is leading the way. However; there are areas, including waste and recycling, where there is room for improvement. The pressure does not come solely from meeting customer demands but from investor needs and regulatory requirements. One crucial area is the energy market, as companies who improve energy efficiency, have a long-lasting competitive advantage. This not only brings ESG benefits but financial advantages, as substantial savings can be made. These improvements also help attract investment as well as new employees who are keen to join a sustainable organisation.

“There is a challenge and an opportunity here,” Rachael suggests. “A challenge to make good on commitments. To actually take action, as well as make firm commitments in using innovation and innovative technologies and processes to be able to drive these initiatives forward. There’s also an opportunity there in terms of providing those innovations to other sectors.”

Are technology companies naturally innovative?

She then asks the panel, do you believe that tech companies are naturally forward-thinking and therefore more able to innovate towards sustainability initiatives, and have you got any current examples?

As technology moves on so rapidly, firms tend to have very short product development and life cycles and are fast-moving, says Bruno. “They are innovative by the fact that they are blazing new trails in literally putting out things that didn’t exist.” This velocity allows them to address sustainability more quickly than auto manufacturers or airplane manufacturers, for example, that have long product development cycles, where good sustainability ideas they had seven or eight years ago, might not have hit the market yet.

Alex added, “I was thinking about the spectrum of sustainability and how there is a wildly kind of exciting and sexy side. And then you get into more of the operational mundane stuff, but all of these things ‘lift the ship together’. However, “efficiency to me is the core to sustainability. When you run an efficient business, you’re saving carbon source.” By reducing paper in your systems, optimising workflows, or cutting the number of screens in a call centre you can make small but incremental power consumption reductions. “You’re saving money, you’re saving time. So framing things around operational efficiency inherently is going to cause good things to happen throughout the business and I think that’s really a sweet spot that folks overlook. Sometimes they are looking for the big and sparkly item, but sometimes just optimising is going to do a lot for your business.”

Every industry has started this path of self-realisation, says Bruno, but that is especially true of the technology sector, as it is less hardware-heavy. Think back about the environmental footprint renting VHS tapes caused, where you had to go back and forth from the shops. Now, with digital streaming, there is less of an impact on time and resources. “So I believe that there is efficiency on one hand and tech is able to help other industries with the Internet Of Things and Smarts that can help, too.” There is also a need to minimise consumption and resources.

Sustainability and the supply chain

The discussion then turns to sustainability and the supply chain and how partnerships can help. Although the industry has made progress, that hasn’t always been the case, Alex explains. “I use this analogy that sustainability managers or sustainability procurement managers have been asked to move a mountain but only been given a shovel. And historically, the group has been fairly under-resourced. I spoke recently with a procurement manager for a very large CPG (Consumer Packaged Goods) company. And this person is still using spreadsheets to track all of their suppliers.” When someone is using spreadsheets, they are unable to be as effective as a business needs them to meet their ESG goals. So, it is critical to start thinking about supply chain, not as something that is ‘over there’, but a core part of your business operations in a workflow that needs to be managed.” Therefore, companies need to be looking at how they manage their overall supply chain, as well as giving the supply chain managers the resources that they need to drive the goals of the business.

ESG and sustainability are becoming more of a Central Business issue, mainly being fueled by capital market expectations from investors and lenders, says Bruno. This means there is a need to ensure the consistency, quality predictability, and comparability of data. Added to that are the requirements of regulators around the world to add extra scrutiny and specification to how information needs to be collected and managed end-to-end. There is also the expectation that many of these findings or data will find their way into financial statements and to regulated disclosures, so now organisations have both users and keepers of data. Businesses have moved away from spreadsheets transferred over email and stored on shared drives, as there is little traceability on authorship or version control. EY is helping clients understand how to “professionalize and elevate” and specialist software can make the work of auditors easier. For example, the SEC (the U.S. Securities and Exchange Commission) is expecting assurance on ESG data from some companies. But the issue is not just about accurately recording data. “Good management information systems always make you smarter, drive efficiency into your business and you have a greater chance of accomplishing the goals and objectives you set for yourself.”

Companies should have some level of constant development and should be using new solutions, adds Emanuel. They are required to use the latest technology to harvest, process, and make decisions, which sometimes have to be made minute-by-minute, or every second in telecommunications or in real-time in data centres to maintain the quality of the service and use fewer resources. “So I think it is essential to use these kinds of very data-heavy solutions and software’s and even AI.”

The five-year revolution

Focusing on Technology for Good, Emanuel believes we are at the beginning of a five-year revolution. For instance, the primary purpose of the 5G telecoms network will move from connecting people to connecting things. It could be connecting salmon farms in the ocean. In every industry, some applications would bring benefits. It’s not necessarily about speed, but what you can connect. Giving another example, you would be able to control a crane from a shared service center, rather than having to be there in person.

“I think from now the tech industry will help many other industries to operate in a more efficient manner.” Emanuel says he is very optimistic that in the next few years, industry, manufacturing and agriculture and the service sector will all see major positive impacts.

• In part two of the webinar we cover ethics and other benefits of sustainability, the power of partnerships, and what prevents tech businesses from becoming more sustainable?