ESG is becoming more important for business leaders, and this is extending to the channel – and businesses should act now to ensure it can contribute to the bottom line.
Business leaders are increasingly aware of the need to reduce the environmental impact of their operating model. This extends to their supply chains and channel partner ecosystem, which is now expected to deliver IT solutions that help them reduce their energy consumption and lower carbon emissions.
These considerations go as far as determining with whom companies choose to partner. By 2026, environmental, social and corporate governance (ESG) performance will be viewed as a top three decision factor for IT equipment purchases, according to IDC’s 2023 sustainability and ESG predictions.
Partners that are unable to demonstrate their own environmental impact with clear and measurable metrics, for instance, run the risk of being left behind. Here are five more reasons why it is important for the channel to embed sustainability in their business strategy.
1 Greater consultancy
Developing and implementing an ESG strategy is not only good for the planet; it’s good for business too. A comprehensive sustainability plan creates a way for channel partners to take on more of an advisory role with their customers, helping to ensure customers understand the environmental impact of the technology they adopt and associated services they use. This enables them to make decisions that help them achieve their sustainability ambitions and demonstrate good environmental practices across their supply chain.
2 Strength in numbers
The significance of collective action in reducing the environmental impact of businesses should not be underestimated. It is time for the channel, including distributors, wholesalers and retailers, to collaborate and promote ESG practices throughout the supply chain. This will support achieving their own sustainability goals and each other’s. It can also benefit customers, as having access to shared knowledge and resources can guide businesses to the right technology solutions and expertise to help them move closer to achieving their sustainability goals.
3 Competitive edge
Prioritising sustainability in their channel operations will help customers stand out from their competitors, including enhancing their brand reputation. It will also help customers generate greater demand for their offering and create new business opportunities.
4 Role of data
One of the greatest IT challenges for organisations aiming to embed sustainability into their operations is a lack of quality data. The ability to receive tangible environmental data from suppliers about their technology products and services will help channel partners clearly communicate to their customers the environmental benefits of the IT solutions they are recommending. Easily understandable and measurable data will also enable the channel to support their customers in their ESG journeys and ensure their sustainable strategy aligns with customer expectations.
5 Adding value
About 53.6 million metric tons of e-waste is produced every year worldwide, according to the UN. As the world seeks new ways to tackle e-waste, the circular economy plays an important role in extending the lifecycle of technology. This does not mean this incurs greater costs or comes at the expense of innovation, for example, through self-healing systems to minimise downtime and human intervention, and built-in drive encryption to securely erase data.
Forward-looking channel partners should be putting sustainability at the heart of their offer. The focus of business leaders is shifting as they realise that companies that fail to act now to improve their ESG credentials may face significant financial and business impact in the future. By encouraging ESG to be central to purchasing decisions, the channel can make a difference to the planet and the bottom line.