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ESG: Tech Companies Must Also Become Responsible

ESG has become vital for many companies in traditional industries like mining. But what are tech companies doing to keep themselves accountable? As evidence mounts that digital companies are creating a larger environmental and social impact than we might have previously thought, there is certainly a good case to be made for why digital companies should live up to higher standards.



Digital technology has entered our daily lives: it is a tremendous lever for development, learning, and optimization. It is sometimes a source of simplification; it offers opportunities and openness; it is perhaps innovative, even very innovative.

But it can be impacting and problematic for the environment, human beings, workers, local communities, equal opportunities, ethics, and data security: this is a factual and shared observation. So should we be expecting tech companies to live up to higher ESG standards?

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Lines Between Digital and Real Becoming Blurred

The period we live in today shows us this ambiguity even more clearly. While it is true that digital technology has been a fundamental factor in the resilience of social life, its uses have been greatly multiplied for everyone: increase in the stock of equipment to allow employees to work from home, access to collaborative tools, development of distance training, the multiplication of promotional webinars, etc.

It certainly took a lot of agility to adapt to the health crisis. But the global impact of digital technology, which we already judged at the end of 2019 to be significant and worrying, could not be controlled as would have been necessary to achieve the objectives of sustainable development defined by the Paris Agreements. Admittedly, we hear a lot about CO2 footprint, carbon footprint, and greenhouse gas (GHG) emissions, but not much about broader ESG considerations.

Environmental and Human Risks

It is essential to also take into account in these environmental impacts the depletion of water, rare earths, and non-renewable metals, which, to date, are already in the process of depletion. Again, a multi-criteria approach is fundamental to avoid the pitfall of reporting impacts. Finally, we should not neglect social and societal issues either. Why?

First, resource scarcity often implies national and international conflict areas. Because reducing your carbon footprint does not mean preserving other environmental impacts.

Because digital technology impacts not only the environment but also humans in general: local populations and communities for the manufacture of equipment, the health conditions of digital workers, diversity and equal opportunities in the learning as well as in the world of work, access to products and services.

Thus, we thought of the perverse effects of a digital overdose: the psychosocial risks of excessive telework, of a rhythm of life that can no longer do without the screen, and, what is more, no longer separates so clearly private life and professional life?

And have we also thought of those who, due to an economic, geographical, educational, generational situation or a health reason, cannot or do not know how to use digital tools to access essential devices such as completing formalities administrative or buying a property?

Should Tech Companies Be Held to ESG?

In summary, digital ESG is a necessary response to the conjunction of the essential digital transformation and ecological transition without forgetting to be ethical and safe in the process for and for the benefit of all.

And what does it go through first? The awareness of all that it is necessary and even essential to change. How? Raise awareness, train, act, measure, and improve by iteration!


(Featured image by Lucent Designs via Pixabay)

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First published in Les Echos: Entrepreneur, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.