The rise of ESG has growing implications for the tech industry
The importance of environmental, social and governance issues is growing across the economy, and a confluence of factors is driving the importance of ESG in the technology sector in particular. Regulators are calling for companies to put more metrics around their ESG goals, and more customers and employees are demanding businesses take a stand on these issues.
Technology companies have found themselves in the spotlight given their dominance in the market, sizeable valuations and ever-growing reach into people’s daily lives. Big technology companies have led the way in recent years on ESG issues such as climate commitments, diversity and inclusion efforts, and global governance initiatives, paving the way for the rest of the tech sector to follow along.
Investment capital earmarked for ESG assets, calls for workplace equality and equity, and a level global playing field are driving tech leaders and entrepreneurs alike to examine ways to bring ESG into the core of the enterprises they run. In a historically white- and male-dominated field, the employee base is now more diverse, necessitating more intentional inclusion efforts and highlighting the sector’s reliance on H-1B visas, which draw foreign workers. As ESG issues have come to the fore, tech companies that may have been lagging on the human capital side have been forced to adapt.
Technology companies have a significant opportunity to differentiate themselves from their peers and align with customer preferences. Adopting a strong ESG strategy now will also put firms in a better position to navigate regulatory and policy responses from governments across the globe in the future.