Chris Tilley, CFO, Harvey Nash Group
As we enter 2022, and the first few locations across the world show signs that the pandemic might be easing, many organisations have an opportunity to refocus on core strategic goals and aims. For the tech sector this year (and beyond), one of these must be sustainability.
Without doubt, the climate agenda has intensified in recent times, culminating in the COP26 conference in Glasgow in November last year. Whether you see the conference as a success, a disappointment or somewhere in between, it cemented climate change and climate risk as a key issue for our times and increased the sense of urgency for action.
That urgency will manifest itself in governments around the world forcing businesses towards more sustainable behaviour as well as more comprehensive and transparent reporting. And this will be complemented by increasing scrutiny and pressure from businesses’ key stakeholders – from shareholders, analysts and rating agencies to regulators, customers and staff.
The fact is that whilst many tech businesses, including especially the Silicon Valley giants, have put significant sustainability goals at the heart of their future vision, others are yet to make significant in-roads in the journey towards Net Zero.
We saw evidence of this in last year’s Harvey Nash Group Digital Leadership Report – the sustainability agenda was second from bottom in Boards’ priorities for their technology teams.
More than half of the digital leaders we surveyed say their businesses are using technology to reduce travel and improve operational efficiencies, which is encouraging – but less than a quarter are focused on improving the carbon footprint of technology itself.
This needs to change – and I think it already is. Certainly the carbon and wider Environmental, Social & Governance (ESG) agenda is something that comes up more and more frequently in conversation with clients. It’s on tech leaders’ minds.
More businesses are also appointing specific leads to drive the sustainability ambition, such as Sustainability Directors or Chief Sustainability Officers.
It’s something that we are accelerating the pace of at Harvey Nash Group, too. We recognise that we’re in the early stages of our journey but we have already taken some significant steps. In the UK, we report on our sustainability and energy usage in the form of our SECR (Streamlined Energy and Carbon Reporting) report.
We’ll also be reporting in line with the TCFD (Taskforce on Climate-related Financial Disclosures) framework as that comes on line for listed and large businesses in the UK this year. In addition, we have published a Carbon Reduction Plan in which we set out our approach and pathways to become Net Zero across the Group.
We have set ourselves ambitious targets to become carbon net zero by 2030 across our operational footprint and by 2050 we will be net zero across our entire value chain.
We’re going further too: today we publish our Sustainability Report which will give more detail and analysis of how we capture and define our current carbon footprint across the Group, the measures we’re putting place to reduce it, and our targets moving forward. This is not a mandated report – it’s entirely voluntary.
We’re doing it because we know it matters to our stakeholders and we want to kick off an open and productive information flow that shares our vision and the progress we’re making.
What have we learned so far?
Firstly, you can’t tackle an issue if you don’t know how big it is. So the key foundational step is to measure and quantify your Scope 1-3 carbon emissions. Undoubtedly, it’s quantifying and then tackling Scope 3 that is the biggest challenge, as this encompasses all indirect emissions across an organisation’s value chain.
To compile our footprint, we put together a working group with representatives from every team and geography in the Group so that we could gather all the data needed. This group will remain key going forward as we track the difference that our measures are making.
Secondly, prioritise actions that will have the biggest impact. For most technology businesses, energy consumption will be a significant driver of the carbon footprint. So ask yourself, how are you hosting your data? Worldwide, data centres are estimated to consume 200-terrawatt hours of electricity a year.
Does your data centre provider run their facilities on renewable electricity? This is a critical piece in reducing IT-related carbon emissions. We have moved all our hosting across the Group to Microsoft Azure – as well as security and cost factors, Microsoft’s commitment to shifting to 100% renewable energy supply by 2025 was a key part of our decision.
Then there are the suppliers of electricity and power for your offices and operations.
At Harvey Nash Group, we’re beginning the process of switching to renewable energy providers across our businesses. With energy costs volatile and rising, severing the fossil fuel reliance and moving to sustainable sources makes good sense.
Thirdly, sustainability has got to be a live issue at Board level. So whoever is taking the lead on sustainability in your organisation – whether it’s the CFO, COO, CIO or a sustainability specialist – they must have the ear and the buy-in of the Board to drive real change across the business.
Finally, sustainability can’t be something that is siloed within one department.
It’s got to be shared and communicated throughout the organisation. There has to be a real cultural commitment. That shouldn’t be hard, because it’s a topic that really matters to increasing numbers of people. Small measures can help boost this as well – for example, we have begun an initiative whereby we fund the planting of one square metre of seagrass (that is a superb absorber of carbon) for every new joiner to the Group.
But making sure that everyone understands where you are on the journey and what’s coming next is more difficult to get to. So, have a clear plan and keep communicating it. Celebrate successes and keep the momentum going.
The days when sustainability was an offshoot of the ‘CSR programme’ are gone. It’s now a critical strategic topic that matters to key stakeholders. The tech sector is recognising this and can make significant strides forward on the path to Net Zero.