tech companies have ESG issues have historically been viewed more positively than other sectors, but in the past 24 months, the imminent climate regulationsAnd the rapid move towards greater accountability means many tech companies have been exposed.
Issues such as energy consumption, workforce diversity, human capital, security, data privacy and political abuse of platforms are some of the growing ESG challenges that tech companies are facing.
In addition to the preparation of regulations from the SEC and the EU’s Corporate Sustainability Reporting Directive (CSRD), tech companies also face the risk of reputation damage Latest Action on Greenwashing,
If tech companies continue to demonstrate disconnected ESGs and business strategies, they could be putting themselves at risk.
How big is the problem?
The most common topics US tech companies refer to in their financial reports include public health (ranked number 1, a hangover from COVID-19), security (ranking in second) and privacy (third). Climate change and risk management (33), GHG emissions (43), human rights (53) and biodiversity (81) have low priority and appear further down the list.
For European companies, GHG emissions are in the top 20 most stressed ESG topics, ranking 12.th in order of priority. But, as it is the most regulated environmental subject, it does not indicate a strategic approach to ESG. Climate change and risk management (22), and human rights (23) are comparatively high priorities, while compliance management (35) and biodiversity (72) are further down the table.