Tech can help ESG efforts get smarter - here’s how

ESG policies are no longer optional. We now see more companies than ever include elements of ESG in their RFPs. Virtually all my customers build in commitment to achieving carbon neutrality.?

Technology companies as vendors of products, services and solutions have an important part to play in making ESG compliance easier. To do that, ESG must be backed by both strategy and meaning if enterprises want to do it well and achieve their targets at a profit.?

That means deploying technology in the management and support of their own ESG policies.?

The best way to do that is by deploying it?smarter -?so stakeholders need to understand both what technology?can?do for their ESG efforts, and what they?need?it to do.?

Both of these can then in turn help define what they as organizations need to deliver around this - which includes commitments to employees and customers as well as shareholders and regulators.

Getting smarter about energy

For companies that have committed to carbon neutrality by 2035 - an aggressive target - 2035 is basically tomorrow. (We've recently announced our own plans for?net-zero emissions by 2050, underpinned by independent audits.) Twelve years is a long time for generations of technology, but not for the facilities that build them. Companies working on these kinds of timescales know they need to start?everything?sooner rather than later: waiting a day could cost you a year. So many of them feel like when it comes to ESG, they’re already running late to try to seize this competitive advantage - or, really, competitive?necessity.??

The earlier a company starts consuming and producing products with smaller carbon footprints, the smaller their own carbon footprint winds up being. They can then leverage those products to drive even more waste and energy reduction in their business processes and operations.?

The big cloud provider companies, for example, are so precise on the amount of energy they use, down to each chip, that they make RFP decisions based on a?fraction?of a percentage of energy consumption per processor.?

Think of how many there are per core, how many cores in each data center, and 1% more efficiency really adds up - which is why it makes excellent business sense for companies to capture that carbon-neutral, energy-efficient market. I know people who spend all day talking about how to shave milliamps and nanovolts off energy consumption, providing more computing for less power.?

We work constantly with our customers towards consuming less power, as being more energy-conscious is a cost-saver and more importantly, a planet-saver. When the cost of a build for a company, a new manufacturing facility for example, is in the millions or even billions of dollars, and more than half of that cost is operational and ongoing, every efficiency is critical. As it turns out, being sustainable is energy-efficient.?

I recently visited several semiconductor manufacturers, and it was a top-three topic of discussion with all of them that they want to reduce power consumption, specifically in the area of cooling.?

The technology industry leads on innovation in this space in a number of areas.t At Lenovo, we’re proud of our?liquid cooling solutions?and our work in supercomputing,??such as the?MareNostrum in the Barcelona Supercomputing Center, but I’ve also seen Microsoft put whole data centers?underwater. Pretty?cool?solutions, in more ways than one.

Technology connects ESG to business benefits

Aside from liquid cooling and more efficient components, we work with corporate customers to provide?carbon offsets(and we offer it to consumers, too). In October 2022, this passed?over 1 million metric tonnes?of carbon offset. Customers who opt into this service (75-80% do) are mindful of their carbon footprints, and actively working to do something about it.?

Meanwhile, if customers say they don’t want it, my first question to them is always?why not? Then we get to have a very productive conversation around benefits. We don’t operate on guilt. We operate on possibility and opportunity.?

We see it as our responsibility to help guide our partners in creating the fastest cloud, the most secure network, the greatest employee experience, and also the most sustainable products and services. If you’re going to buy them regardless, it just makes good sense to use less energy, be more efficient, and make less of a carbon impact.?

Another aspect of what technology can do for ESG is around reducing waste. Aside from things like sustainable packaging and carbon-neutral shipping, companies are using immersive technologies like?digital twin environments and?XR technology?to kickstart their development and pre-manufacturing testing in Metaverse-like virtual environments. This immediately reduces waste by reducing prototyping requirements and materials.?

Imagine a company spending millions on clay models of their products every month, and only?one?of those models becomes viable for the actual product creation. Recreating that entire process in the digital realm?first?is incredibly efficient in time, resources and manufacturing energy, reducing waste on all fronts.?

With advances in artificial intelligence, physics engines and compute power, more companies can start to take advantage of the virtualization of their development processes, reducing time and cost to build, and to market, in ways that weren’t possible a year or two ago.??

New expectations driven by users

Even when I was a kid, I remember hearing conversations about ‘going green’. When I got into the tech industry, there were three pillars of any conversation: how fast can it go, how cheap can you make it, and how efficient will it be. Today, customers and consumers make decisions from technology to airlines based on carbon footprints, social and moral good, and quality governance.?

These consumers making personal decisions are the same people making business decisions.?

People now expect organizations to act in accountable and sustainable ways, and they expect organizations to invest in ESG. Social and commercial benefits, among the company, the workforce, consumers, and local and global communities, are now deeply integrated.

That’s how the ESG trend got wings - because of the good things that started happening. Companies need to harness those good things strategically for the benefit of business as well as the benefit of the planet. It's a winning formula for smarter, tech-supported, successful ESG initiatives.?