Environmental, social, and governance (ESG) remains an issue of strategic importance to the tech industry, despite ongoing fragmentation by geography and company culture, with the election of Donald Trump as the US president accelerating a period of short-term opportunistic push-back, says GlobalData, a leading data and analytics company.
Robert Pritchard, Principal Analyst, Enterprise Technology & Services at GlobalData, says: “In 2024, GlobalData correctly forecast that tech companies would still see ESG as a core strategic issue. This has been underlined by improved observability, and increasingly aligned ESG and financial reporting.”
GlobalData Tech-Enabled ESG analytical forecasts for 2024 highlighted the impact of artificial intelligence (AI) on the market both as a drain on natural resources, and as part of the solution to address sustainability challenges. This year, GlobalData has observed that the latest generation of network equipment is often 80% to 90% more energy efficient than legacy kit.
Pritchard adds: “GlobalData also foresaw the twin trends of ESG being used as a differentiator by tech companies, and a closer alignment with financial reporting – driven both by regulation and commercial imperatives. This, as predicted, has meant a growing association of cost savings and improved productivity as a result of ESG initiatives.”
Pritchard continues: “The Trump impact will see different speeds and priorities by geography when it comes to sustainability, but the overall direction of travel will outlast a four-year presidential period – enterprises think strategically, and while some may exploit short-term climate change denying opportunities, their customers, employees, and regulators will continue to recognize the importance of addressing the climate crisis.”
Pritchard concludes: “The other major theme we see in enterprise ESG through 2025 is its extension into the small/medium-sized business (SMB) market. This reflects growing customer demand and the ongoing refocus of tech service providers on smaller businesses as the engine of economic – and therefore their own commercial – growth.”
