Economic slowdown cannot stop IT’s ESG progress
Even with a consensus that we will experience an economic slowdown, 2023 is set to be the most active year on record for environmental, social and governance initiatives within IT departments. Fueled by increasing government mandates, stock market investment trends and the genuine desire by IT leadership and staff to do the right thing for people and the planet, I expect ESG initiatives to be in the spotlight — and for that spotlight to shine directly on IT.
Here’s what I think is going to change over the next 12 months in support of IT teams that are actively working to help their organizations meet their sustainability objectives.
In the enterprise, ESG goes mainstream
I expect project formation for enterprise ESG will be at a record for the year — not because I have a crystal ball, but because I have data. In the 2022 survey “The Role of ESG Programs on IT Decision Making” from TechTarget’s Enterprise Strategy Group, roughly 45% of midsize and large organizations said they had plans to purchase ESG compliance solutions over the next 24 months.
That 45% figure is high, putting these investment plans on par with established and arguably more visible initiatives, such as investing in security-related tools (42%), disaster recovery planning (40%) and customer experience related investments (41%) as reflected in our “IT Priorities” survey data, which will be published in February 2023. This is good news for established enterprise application vendors such as SAP, IBM and Oracle, who have long track records in the space and good recognition with buyers. This is even better news for pure-play ESG reporting software providers, who should experience one of their busiest years on record.
For the IT practitioners
2023 will see more data, budget and progress. While obtaining actual power usage data is still a chore, the trend toward greater runtime data availability and observability will make data more readily available. This means that IT pros can make more informed decisions about where and when to deploy workloads based on factors such as environmental impact, including carbon emissions, water usage and energy efficiency.
Our research suggested that IT professionals want to do more than their organizations do to support the principles of ESG in IT. In 2023, they’ll have more of the fundamental resource — data — enabling them to make more informed decisions that better align IT operations with corporate and personal ESG goals and objectives. More ESG projects formed means more budget available to align with those initiatives.
Hardware vendors put their money where their mouth is
ESG is emerging as a new feature or factor in “commodity” product differentiation. It’s joining the evaluation standards of price, performance and up-and-comer security for inclusion in the lists of factors used by buyers to differentiate products and select what to buy. So, for vendors in mature infrastructure categories — think compute/servers, storage and hardware networking — I expect to see more announcements like Pure Storage’s commitment to product-level sustainability, where they’ll contractually guarantee their storage will perform at a specified power consumption per terabyte.
This is new. This brings ESG — in this case, actual energy consumption per terabyte — directly front and center to the decision. I expect more vendor competitors such as Dell, IBM, HPE and others to match this type of product differentiation as they look for new ways to coexist in the on-premises portion of their customers’ distributed cloud infrastructures.
It’s going to be an exciting year. Join me on Feb. 14, 2023, for “The Impact of ESG on IT” online summit on BrightTALK.com (registration required), where I’ll present the highlights of the latest findings by Enterprise Strategy Group on how exactly ESG is affecting IT purchase decisions in 2023.