Expert Hubs 2021: environmental KPIs
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Posted on 17/11/2021
Canalys ran a series of “Expert Hubs” at its latest forum events. We gathered experts from the channel partner community to discuss subjects relating to one of the key event themes: ESG, strategy, cybersecurity, managed services and digital workplace. The sessions contained a mixture of partners, vendors and, in some cases, third-party experts. Event participants were invited to watch the live discussions online. In this series of reports, we summarize the key points that came from those sessions.
Topic: Environmental KPIs
Participants: Boxxe, Elmec, Embedded IT, HP, KOcycle, Rejoose, SEC Datacom, TBL Services, TCO Development, XMA
The environmental KPIs session revealed five key points, with the scope of conversation necessarily superseding KPIs to discuss the inherent link to elements of ESG (environment, social and governance) issues.
- Technology has a vital role to play in the climate crisis, but the industry is in dire need of standards to drive innovation and change.
- Leading organizations develop and set targets across the three elements of sustainability – ESG (environment, social, governance) – which builds strong relationships with employees, customers and investors.
- Further education and collaboration across the technology industry will avoid missed opportunities in sustainable outcomes.
- Carbon measurement is a top KPI in the technology industry, but visibility of the total emissions of products and services is limited.
- Regulation will help standardize sustainability practices, but voluntary work is vital to innovate and deliver at the pace of customer expectation.
It is difficult to improve sustainability with the lack of industry standardization
The technology industry is in a vital position when it comes to the current climate crisis. One panelist highlighted that if the climate and carbon problems are going to be solved, they will be solved using technology. But vendors and partners alike need further education, collaboration and standardization regarding sustainability planning.
Many VARs and MSPs are looking for where to start with sustainability practices, including how to create baseline metrics and how to demonstrate results. In fact, it was reported that a lot of partners are slightly nervous about the state of their sustainability offerings. Though many frameworks and KPIs exist, it is difficult to build sustainability into an organization’s value, develop plans and targets, and put them into action.
Organizations must work for a purpose
Sustainability is a broad topic, and to serve customers better, partners must start by evaluating their own organizations. The panel highlighted the necessity of considering environmental goal setting in conjunction with social and governance (ESG) goals, as the three topics are inherently linked. Building a compelling ESG program starts with strong values within an organization, which then extends collaborative efforts that affect customers and ultimately the climate.
A business that cares about and positively influences these aspects has a more compelling message for customers, employees and investors. One partner on the panel experienced customer demand for not only sustainability built into products and services, but for the sustainability journey of the organization itself. This partner also outlined the importance of employee feedback and challenged that an organization that can’t effectively communicate its position to its employees will not be able to communicate it to its customers either.
Education and collaboration will build sustainable success
The other most repeated point was the need for education and collaboration throughout the technology channel. Customers are asking for carbon reduction plans, and teamwork across the technology channel will be necessary for accurate emissions tracking. The technology channel is a critical part of this dialogue and can push the message upstream to vendors and the supply chain. This is especially important when considering that the embedded emissions of manufacturing a hardware product can account for up to 70% of its lifetime emissions. But without collaboration, the visibility of technologies’ carbon footprints will remain incomplete.
Conversations with collaborators and competitors can also be mutually beneficial when considering the shared supply base in hardware and the shared goal of sustainability. Agreement on certain KPIs and on how to work with vendors will bring focus to the industry along with a stronger impact on sustainability goals.
Carbon is a top KPI
Right now, carbon is arguably the most important environmental KPI. Energy use can often be summarized by carbon emission, and there are clear definitions around carbon measurement tactics. In our discussion it was suggested to focus on two KPIs within carbon emissions: the carbon footprints of purchased goods and services, and the energy use of goods sold. These two metrics can vary greatly, with differences between workplace IT, where the majority of the carbon footprint comes from manufacturing, and data center IT, where the majority comes from use. Starting by understanding where the majority carbon use comes from is a vital first step for any business tackling sustainability.
Full visibility into carbon accounting is still a dream for many partners and customers. The panel suggested an ideal world where a list of products and solutions shows prices and carbon costs. The list would prove a motivator for innovation and a competitive advantage for higher-priced products with lower carbon costs. The panel emphasized the enablement of the buyer to make a fully informed choices, and the competitive advantages this could create.
Regulation and voluntary work
Regulation around environmental and social sustainability is on the rise. There is no doubt that regulation and reporting formality will increase over the next five years. But it is difficult to predict the framework that will underpin a more formal regulatory structure. Yet the process of preparation starts now with new regulations, such as the EU Corporate Sustainability Reporting Directive, which will require organizations to report how they manage social and environmental challenges.
There is an important aspect to the positives of regulation, being that voluntary work will be needed to continue the pace of innovation. Regulation in general moves slowly, and in the arena of sustainability there can be a gap between customer expectations and industry deliverables. Organizations that value voluntary work will innovate and respond to customer demand faster. Additionally, in the broader case of our climate crisis, voluntary work is essential to make change on a more realistic timeline.