By Amy Brown
Big tech companies are looking for ways to differentiate in a hyper-competitive landscape amid economic headwinds that caused tech giants to lose a combined market value of around $2.5 trillion in 2022.
Rather than seeing that as an excuse to cut programs that might seem ancillary to the bottom line, like those related to sustainability and environmental, social and governance (ESG) issues, many tech leaders see ESG as critical as ever to their business in 2023. In fact, aligning the core business and value creation to ESG performance is how a number of tech firms are seeking to stand out from the crowd.
Among them is global tech leader HP, for which ESG has long been a defining aspect of doing business. HP has reported on its Sustainable Impact goals and progress for more than two decades and was among the first companies globally to publish its complete carbon footprint over 10 years ago. The company is aiming to halve greenhouse gas emissions by 2030 and reach net-zero emissions by 2040.
Linking business success and ESG investments
HP publicly shares how its ESG investments influence business success. The company reported that $3.5 billion in net sales were influenced by its Sustainable Impact efforts in 2021 — a threefold increase from a year earlier. In 2021, HP also tracked more than $7 billion in new sales that meet customer requirements for eco-labels, like Energy Star and EPEAT. This is a sign that HP is being rewarded amidst growing consumer pressure for more sustainable products and services.
“We are seeing increasing interest in sustainability and social impact from our customers, investors, and employees,” James McCall, HP’s chief sustainability officer, told TriplePundit. “We know that it’s a factor in attracting and retaining talent, and we’re seeing a rise in employee engagement, including employee volunteering. With our customers, sustainability is increasingly a purchase consideration.”
Circularity takes center stage
HP and other tech firms are largely dependent on the finite resources that provide the materials for their products, from hard-to-recycle plastics to critical minerals. As such, they face a tough balancing act in meeting their environmental and social ambitions. It is not surprising, then, that HP’s sustainability strategy includes a key focus on circularity, or systems where materials are reused and recycled in perpetuity and nothing becomes waste.
The company is leading the way when it comes to using recycled materials. Acknowledging there is no universally accepted definition of what it means for a company to be “circular,” HP created its circularity goal by focusing on the materials and products it places on the market, committing that 75 percent of HP’s products and packaging will come from circular sources by 2030.
Toward robust measurement and disclosure
Ambitious goals mean that HP must be robust in its data-gathering so it can be accurate in its measurement and confident in its disclosure. Companies with the right systems in place for data collection will be better prepared to meet upcoming ESG regulations, like the anticipated climate risk disclosure requirements from the U.S. Securities and Exchange Commission (SEC) and the EU’s Corporate Sustainability Reporting Directive (CSRD), for example
HP aims to halve its absolute value chain emissions by 2030. And it says it’s always pursuing areas for improvement, such as using a new life cycle assessment (LCA) tool to calculate emissions associated with its personal systems products. LCAs like these evaluate environmental impacts at every stage of a product’s life, from raw materials sourcing to production, distribution, use and, ultimately, reuse or disposal. “It’s an ongoing collaborative process that involves continuous information and knowledge sharing from across multiple organizations,” McCall said.
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