Marsh’s recently released research, Assessing ESG and Pandemic Risk Reporting Trends, found that nearly all European firms recognise the importance of non-financial reporting and the dangers associated with failing to declare their carbon neutrality. Ninety percent of European companies (Euronext) list ESG as a top priority when preparing their annual reports, and investors view weaknesses in this area as the greatest threat to their portfolios.
While European companies are “concerned” about pursuing zero-emission and sustainable development, businesses based outside of Europe are not. Just 35% of firms listed on the NYSE, 30% of organizations listed on the Hong Kong Stock Exchange, and 21% of companies listed on the London FTSE100 index perceive the absence of comprehensive ESG reporting as the key concern restricting investor interest.
Europacts
The unanimity among EU member states in their pursuit of climate neutrality is unquestionably a contributing factor to the current state of affairs. The European Green Deal, together with a variety of smaller initiatives and pacts linking companies from different industries, aims to achieve zero greenhouse gas emissions by the year 2050.
The corporate IT infrastructure and the data center industry require special consideration for the reduction of power usage and the acquisition of electricity from renewable sources. Companies in practically every industry now rely heavily on data analysis and specialized digital systems and services. As a result, companies have the option of creating their own in-house IT systems, complete with physical equipment, or outsourcing, and making use of solutions brought to them through the internet, most notably cloud computing services. Energy consumption is rising as a direct result of the ever-increasing volume of digital data gathered and processed by businesses and other organizations engaged in ever-more-complex activities. According to Marcin Zmaczyski, Aruba Cloud’s Director of Marketing for Central and Eastern Europe, this is why more and more businesses are turning to technology partners to reduce their environmental impact through the provision of IT resources that are then maintained by the service provider.
The providers of computing power and business software, known as data center operators, are cognizant of the significant energy requirements of their facilities. DataCentreDynamics reports that the yearly energy consumption of European DC facilities is over 50 TWh, or almost a third of Poland’s total annual energy demand. It also stems from the fact that a growing number of their European clients are opting to include the fact that they are not using any energy to maintain their IT infrastructures “at home” in their ESG reports by working with a partner who has declared the lowest possible or zero environmental impact. As a result, there have been efforts like the Climate Neutrality Pact of Data Centers, which brings together data centre owners from the Old Continent and establishes actionable goals for lessening their environmental effect.
Ethical and Sustainable Sourcing
Businesses are increasingly adopting a strategy of seeking out IT solutions from providers that can attest to their ethical resource management and use of renewable energy. Sixty percent of Fortune 1000 companies use or plan to use cloud solutions to expand the scope of environmental, social, and governance (ESG) reporting, and nearly as many (59%) want to improve their testimony in the area of documenting their efforts in this way of caring for climate neutrality, as reported by the PwC – Cloud Business Survey. – Since the study focuses on the US market, it follows that if most businesses in that country want to improve their non-financial reporting by using the cloud, then this trend should be even more pronounced in Europe, where the emphasis on ESG is much higher, as pointed out by Aruba Cloud’s Marcin Zmaczyski. By 2025, climate neutrality will be one of the top three factors in choosing a cloud computing service provider, according to research firm Gartner.
Boom Detection
The agency Bloomberg estimates that by 2021, worldwide investment in sustainable development initiatives across ESG reporting sectors would have reached $ 120 billion. Compared to the previous year, when it was slightly over USD 51 billion, this is a significant increase. At the same time, investors from all over the world are pouring money into new businesses that are developing software and other technologies to monitor and assess businesses’ actual effects on the natural world. According to PwC, these businesses raised $570 million in the first half of 2021 alone.
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