Information Systems for Environmental Sustainability

IT, Resource Productivity, Environmental Preservation, and the Fourth Industrial Revolution

Ceres Report – Why do Tech Companies Lead in GHG Emissions and Energy Efficiency?

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Ceres and Sustainalytics recently published “Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability.”

613 publicly traded companies were assessed on 58 indicators (governance, stakeholder engagement, disclosure, etc.).

Based on these indicators, the companies were grouped into 4 tiers based on their relative performance (tier 1 is best).

Regarding GHG emissions and energy efficiency:

More than half of the companies falling into Tier 1 for this expectation are Technology companies, including Hewlett Packard, which has not only set timebound targets for reducing GHG emissions and increasing renewable energy sourcing, but also sources more than 10 percent of its primary energy needs from renewable sources. (page 7). 

Why is this the case? The report does not elaborate on underlying causes. 

But it’s part of a larger pattern that I’ve observed (albeit anecdotally) in similar reports in recent years.

My own hypothesis is that tech companies excel in energy and GHG emissions management and reductions given their expertise in managing data and information (necessary to setting and meeting reduction objectives), combined with external pressures based on popular perceptions of energy hungry data warehouses. In essence, tech companies appear to have both the motivation and the ability to lead in energy and GHG emissions reduction efforts.

Could it be that tech companies are natural sustainability leaders? If this is the case, perhaps their strategies and tactics can be studied so that best practices can be diffused to other industries. I’ve spent much of my three-month sabbatical forming partnerships and developing projects related to these ideas. 

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Author: nigelpm

Associate Professor of Information Systems, Stephen M. Ross School of Business, University of Michigan - Helping organizations to navigate digital transformation.

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