Being environmentally responsible is just a good idea. No matter your political views, whether or not you believe in Climate Change, or if your industry is still in the dark ages with sustainability, being conscientious about your environmental, social, and governance dealings will make your business better. And that’s exactly what a UK-based investment analytics firm Arabesque has discovered. But if you’re not looking to invest in solid companies, perhaps you’ll be interested in seeing how to have your own ESG performance improve.
A Bloom by any other name…
At Sage, we have a quarterly report that we’ve named the Bloom report. So named because it illustrates how being sustainable with your IT assets can positively impact every area of your business. The seven stakeholders of Finance, Asset Management, Data Security, Environmental or Sustainability, Procurement, Legal, and Philanthropy, all work in an orchestrated way that can either bloom or die, depending on the overriding principles of the business.
We have seen how aiming toward the principle of conscientious sustainability—the same ideals as a good ESG program holds—can help any business to achieve improvements across culture, profitability, and efficiencies. In effect, blooming under the single act of being sustainable.
How does being sustainable help ESG?
We’ve touched on this in other posts, but the secret behind ESG is that it is intrinsically sustainable. Bettering the environment is just a start; social aspects such as diversity and equality fall under the sustainable label in that they can be self-supporting. A company risks imploding if there isn’t better treatment or more equitable opportunities for its diverse employee base. Governance also cannot be accomplished without being sustainable, since longevity is the ultimate goal.
So, having a sustainable mindset is the pivotal aspect to achieving better ESG performance, but where do the IT assets come into play? Companies in this day and age are, at their core, technology companies. No matter your output, the significance of electronic devices in what you do as a business is likely more than half of what your business is worth. Both from an equity standpoint as well as from an efficiency position. Yours is a digital business to some degree.
This is important to note because the number of devices your business owns takes a significant toll on the environment if not dealt with in a good way. Not to mention that those seven stakeholders are each integrated somewhere on the IT asset timeline; up front with Procurement and Finance, throughout the process with Data Security and Legal, or at the device’s end-of-life when Philanthropy or Environmental opportunities present themselves. This integration makes your IT assets the best place to focus on improving your ESG performance.
What good ESG means for your business
Let’s say that you’ve gotten all those seven areas of your company on one page so the company is firing on all its sustainability cylinders. What’s next? How does an improved ESG performance change anything in your business? Well, it all comes down to how important being sustainable is to your business. Specifically, it comes into focus with regards to your IT assets. We’ve seen how being more conscientious with electronic devices can lower procurement costs (buying used, or refurbishing older devices) and with reselling retired devices instead of recycling them. Sustainable ITAM can also help your social performance when you donate retired devices to the community. Banks see this dividend pay out by adding the much-needed CRA credits.
So better sustainability leads to improved ESG scores, and those can translate into additional rewards, but we are missing one very crucial part. That’s the part where investment companies see that value reflected in the stock price of your company. This article, and accompanied video, does a good job of showing how much ESG performance can dictate stock price.