Spotlight On: ESG in Tech

Technology isn’t just having a moment, it is the moment. In the Anthropocene era, technology defines the way we work, socialize, travel, spend money and learn new things. Barely a day goes by where we don’t see a news story that either trumpets the capacity of technology to solve the world’s problems, or laments its amoral-at-best role in creating them.

Love it, loathe it or somewhere in between, the digital world is here to stay, and arguably we are only just beginning to understand the ways in which it will change our lives.

As businesses, including those in the tech industry, increasingly organize around Environmental, Social and Governance strategies, it seemed like time to take a look at what tech can do -and what the industry needs to do- to harness its remarkable influence to help create a sustainable future for all of us.

Technology and Environmental Sustainability

You might not see a plume of smoke every time you check your email, but it’s undeniable that tech is a large, and growing, contributor to global emissions. From the massive data centres required to maintain the world’s connectivity (soon to have a bigger impact than the aviation industry), to destructive mining practices for our cell phone batteries and the growing electric car market, tech is a quiet but significant contributor to the heating of our planet. 

Is anything being done? The ‘Big 5’ tech companies are aware of their impact, and all have set targets to use 100% renewable energy and/or committed to be Net Zero by 2050, with Microsoft planning to be carbon-negative by as early as 2030. That said, few of the companies have released detailed plans on how they will reach these targets or report on them to investors and consumers, and none has volunteered to address the 60% of emissions that come from downstream product use – a clear example of inconsistent governance of what ‘Net Zero’ actually means.

Of course, it’s more than just the ability of the technology sector to address and regulate its own emissions.  Many argue that tech has a major role to play in mitigating and reducing emissions across all sectors. While some technologies haven’t yet lived up to their promise (carbon capture), others offer an exciting glimpse into a greener future (automated urban farming that reduces agricultural emissions). A  2019 report  for the World Economic Forum, proposes that technology interventions ranging from electric vehicles to drones, have the potential to reduce global emissions by 15%. 

How can your business use technology to improve environmental sustainability?

·      If you have a fleet of vehicles, consider going electric as they come due for replacement. While it’s true that batteries are environmentally problematic, they’re much less so than combustion engines, and better solutions are being investigated all the time. Progress over perfection.

·      If you don’t have a car fleet, you can consider ways to incentivize your employees to take public transit or ride a bike to work, like an app that offers rewards for every sustainable commute.

·      Replace office tech less frequently

·      Encourage staff to chat in person rather than using email or instant messenger. Not only will it reduce unnecessary tech use, it’s better for your team’s mental health and helps to create a stronger culture. In a Covid-safe way, of course.

Technology and Social Sustainability

We know what you’re going to say. Facebook. And you wouldn’t be wrong. From hiding the toxic impact of its products on teenage girls, to promoting disinformation about vaccines and political candidates, to developing glasses that put the safety of fifty percent of the population at real risk, this tech giant has a reputation that is fast sinking into the swamp, and it’s bringing much of the industry along with it.

Facebook may be the current magnet for criticism, but it is the public face of an industry that suffers from a serious bro problem. Women hold only a quarter of jobs in the tech industry (a figure that’s lower than it was in the 1980s) and just 20% of Board roles at tech companies. Women in technology were more likely to have been laid off or furloughed during the pandemic, and experience 50% higher rates of burnout than male colleagues. 48% of women in tech have experienced harassment, and 65% of female founders have been propositioned for sex in exchange for funding by potential investors.

These very real and very problematic issues aside, technology also has the capacity to make a huge, positive impact on society. Pilot programs with remote Indigenous communities in Canada have shown that technology can dramatically improve access to healthcare and compliance with treatment programs. Technology can help students in impoverished areas access education, connect domestic violence survivors to shelters and support, and allow a person with suicidal thoughts to reach a counsellor at 3am. 

It’s likely that we will always be conflicted about the role of technology in our lives. But there are steps the industry can take to lift its game, beginning with dropping the flawed ‘free market’ ideology behind the regulation of technology – a mindset which only benefits the privileged. 

How can your business use technology to improve social sustainability?

·      How many women are there in your IT department? Are any of them in leadership positions? Why/why not? Are these reasons valid?

·      How can you align your current approach to tech with your social sustainability strategy? For example, if you have a goal to ensure no child in your community goes hungry, can you use technology to measure and report on your impact?

·      Share the salary packages of all staff, particularly if you are a tech company, to promote gender pay equity.

·      Don’t accept invitations to speak on panels at tech conferences unless there are women and people of colour on the panel also.

Technology and Sustainable Governance

We’ve covered some of the challenges the tech industry faces in terms of its own governance – who it appoints to its boards and leadership roles. While this blog has focussed particularly on women, it should be noted that the same disparities apply to people of colour, and are notably worse for women of colour. You can read more about the relationship between ESG and DEI here.

Let’s take a look at some of the amazing things the tech industry can do, and is doing, to support sustainable governance. Things like blockchain. While it might seem wonky as heck to outsiders, blockchain has the potential to make a huge difference to transparency in everything from supply chains to consumer finance. Like a digital Torrens system, blockchain allows every step in a process to be digitally and inalterably recorded, forever. The potential uses are vast, from ensuring that payment is made at the end of a contract, to stopping philanthropic donations being used for money laundering, to ensuring Aboriginal artists receive a fair percentage of the resale value of their work.

Similarly, many organizations are employing technologies to enhance the transparency of their supply chains, enabling better and more sustainable decision-making. Banks, perhaps surprisingly, are doing some leading work in this area for corporate clients, while law firms, who clung to the fax longer than just about any other industry, are now racing to adopt innovative legal tech that will dramatically lower corporate governance and compliance costs for their clients.

Here’s the thing. Tech is far from perfect when it comes to ESG performance. It’s visible, necessary, and something we all use every day, so we are interested in its failures. Perhaps more so than most other industries, because while none is perfect, few have such a powerful hold over our lives. However, tech also has the capacity to be transformative. In a few short years, this industry has entirely changed the way we live and interact. As the authors of definitive report ESG and Tech, 451 Research, note, “the impacts and implications of ESG on technology are both wide-ranging and material; in fact, there is almost no area of the segment that will not be impacted, or will not have a role to play in shaping the future.” 

The question is not whether ESG and tech impact each other, but how the humans in charge of this industry can leverage technology to accelerate our progress toward sustainability, rather than stall it.