Despite the turbulence of the past few years—pandemic, geopolitical conflict, inflation—climate change remains a top issue for technology, media, and telecommunications (TMT) companies. In fact, according to Deloitte’s 2023 CxO Sustainability Report, many have increased their sustainability investments over the past year.
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Yet while many TMT executives are optimistic about the ability of the world at large to address climate change, they are still finding it difficult to tackle some of the harder to implement actions that will really move the needle on climate change. There are, however, proactive steps TMT companies can take to accelerate progress on a green transition.
Driven to act
The 2023 CxO Sustainability Report, which surveyed over 2,000 global executives, including more than 450 TMT executives, offers plenty of good news when it comes to TMT companies and sustainability. Foremost is the continued recognition that climate change is one of the most pressing challenges of our time. Of the top issues facing their companies, TMT executives ranked climate change ahead of economic outlook, geopolitical conflict, and talent shortages. Reflecting that urgency, nearly 80% of TMT executives said their organizations increased their sustainability investments over the past year, and 60% said climate change is highly likely to impact their companies’ strategies and operations over the next three years.
This shouldn’t be surprising given that 82% of TMT CxOs have been personally impacted by climate change over the past year—including drought, storms, and flooding. And while this is hardly good news, it could certainly contribute to their heightened concern over climate change with 65% saying they feel concerned about climate change all or most of the time. Despite this concern, 8 out 10 of TMT leaders stated they are optimistic that the world will take sufficient steps to avoid the worst impacts of climate change.
This heightened awareness could be a key reason why TMT companies are more likely than the report’s overall global average to take action in areas such as training employees on climate change and reducing air travel. Then again, TMT companies, according to the survey, were less likely to use more sustainable materials and increase energy efficiency.
TMT companies are, however, undertaking several of the “needle-moving” actions (as defined by Deloitte’s analysis) at slightly higher rates than the global average, including developing new climate-friendly products or services and updating/relocating facilities. And while that’s good news—the fact that only about half of TMT companies have undertaken these activities highlights that there’s more work to be done.
Barriers to progress
Part of the problem in progressing sustainability strategies could be that TMT executives are having difficulty seeing tangible, financial benefits of climate efforts. While brand reputation, employee morale, and customer satisfaction are seen as the top benefits of sustainability efforts, investor returns and revenue rank among the least beneficial. Furthermore, TMT CxOs cite a focus on near-term business issues as one of the biggest barriers to more climate action.
So while TMT companies recognize the critical nature of climate change, there still is some disconnect between impact and action. Companies should consider the following steps to jumpstart their climate change agendas:
- Commit to net-zero. A critical first step is to be clear about the company’s plan and timeline for getting to net-zero emissions. Leaders should consider having their company’s reduction targets validated by an external organization.
- Embed climate goals into the business’ overall strategy and purpose. Often what impedes action isn’t lack of intention but the choices and tensions that CxOs and boards must navigate to clearly define their organizations’ stance on climate action.
- Empower the board. As stewards of their organizations, boards can play a vital role in guiding businesses toward a more sustainable future by ensuring that long-term views are captured in management decision-making.
- Reconsider the product portfolio. Companies can choose to double down on products and services with the most potential to reduce carbon. For example, one major telecommunications company aims to help its customers reduce carbon emissions by supplying IoT services for fleet management, logistics, manufacturing, and metering.
- Address the value chain. With value chain emissions estimated to be seven times greater than operational emissions in the tech sector alone, TMT companies should work collaboratively with suppliers and partners to meet sustainability goals.
Building on the positive
Perhaps the most positive indicator of all from the survey is that almost 90% of TMT CxOs are optimistic that the world can achieve global economic growth while also reaching climate change goals. So though there are some companies still hesitant about the financial relevance of sustainability strategies, this news can be viewed as a strong precursor to progress—that is, taking the proactive steps needed to mitigate climate change impact.
To learn more about TMT and sustainability see “Tech’s climate commitment” from TMT Predictions 2023.
