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As its name suggests, the technology, media, and telecom (TMT) industry is an origin and a springboard for many solutions that solve various problems across industries. The same must be true for sustainability. The capabilities are already there:
Global sustainability will require collaboration on a scale never seen before. And despite continued signs that TMT firms (in this case, in combination) continue to act against climate legislation despite public rhetoric on sustainability, TMT must seize its role as a focal point within increasingly complex, expanding ecosystems.
Alongside its ability to catalyze global sustainability, TMT must get its own house in order. This starts at the CEO level, not just in rhetoric, but in embedding organizational-level targets and roadmaps throughout their companies down to day-to-day operations and decision-making.
The TMT industry acts as a springboard for technology that proliferates throughout industries between enterprises and in service and technology provider portfolios—acting as the central point in global ecosystems; see our recent TMT Services Top 10 report for more. Technologies and platforms, alongside a fundamentally new level of ecosystem collaboration, all have critical roles across ESG. Our latest enterprise data from the Global 2000 suggests precisely this; in Exhibit 1, most major organizations are making significant investments in emerging technologies to support sustainability.
Sample: 800 Global 2000 enterprise leaders
Source: HFS OneOffice™ Pulse Study, 2021
Supply and value chain dynamics govern much of sustainability, whether via regulations or enterprises’ own reporting requirements of their suppliers. These dynamics manifest throughout the TMT industry; we recently commented on examples in semiconductor manufacturing and consumer tech. The TMT industry must eliminate cloud and IT carbon footprints to decarbonize; to drive this, hyperscalers, telcos, and all manner of platform providers are investing aggressively in renewable energy and services to help their customers migrate and optimize their networks, operations, and storage. While estimates vary, the information and communication technology (ICT) sector across devices, networks, and data centers has a footprint of about 1.4% of global emissions and 3.6% of electricity consumption.
TMT must be that springboard industry where organizations turn technologies into solutions and find their application for sustainability. Media firms also have a role to play in pioneering sustainability and breaking many of the culture and perception barriers that exist in consumers and businesses. David Attenborough’s BBC Blue Planet documentary is a well-used example that had a significant effect on the UK’s perceptions and regulations of plastic (despite noting with full awareness that reducing plastic straw use solves a very small part of the puzzle, and can be maliciously marketed by firms to cover up their broader shortcomings). Whether it’s AI, 5G, IOT, or datacenters, TMT is where it starts. These technologies are also being increasingly integrated, alongside data and business processes, on the platforms governing enterprise operations.
The ongoing decarbonization of technology and platforms will help enterprise customers clean up their footprints (i.e., their indirect and supply chain emissions associated with technology). But the most scalable impact will be businesses breaking down the barriers to turning organizational-level sustainability strategy into roadmaps and delivering on them; procurement teams must be incentivized to buy cleaner energy, and operations teams must include ESG performance indicators in process optimization, for example. Integrating data across organizations at all levels is the first step in changing this. Sustainability is far too siloed within organizations, even if it has the CEO’s backing. Too often, ambition doesn’t translate into metrics and plans throughout the whole company, meaning sustainability never becomes a priority in most decisions or operations.
Integrating ESG data throughout supply chains will take a monumental shift in how organizations collaborate on an ecosystem level we just haven’t seen before. TMT firms have the tools, experience, and sheer might of already being central ecosystem players (think Microsoft, Intel, Cisco, or any number of TMT giants) to set the example with their own sustainability and incorporate their progress in the technologies and services they supply their customers.
We’ve laid out a number of examples in which the TMT industry can use its expertise and resources to pioneer sustainability across industries and ecosystems. TMT companies must also use their technology and experience to get a handle on their operations and supply chain emissions as reporting requirements tighten globally—both for their own sake and in their roles as the providers of cloud computing, semiconductors, and much more. TMT’s customers will increasingly need to disclose their indirect and supply chain emissions (Scope 2 and 3 emissions, respectively) if they don’t have to already; therefore, TMT firms that haven’t mastered their own sustainability and capacity to provide that data on demand will see their supply chains and regulators become increasingly impatient—regardless of how many solutions and investments they make in driving sustainability for others.