Categories: Analyst Blogs
ESG (Environmental, Social, and Governance) reporting is a disclosure from organizations that outlines their actions and impact on non-financial related areas such as ethics, diversity, and sustainability. There is mounting pressure on companies to release such reports – both due to societal pressures as well as in some cases legal compliance obligations. It is also a growing area of concern for both investors and potential customers of these companies to receive a level of transparency regarding sustainability and social practices.
While it covers a number of areas, ESG reporting is largely focused around sustainability and environmental impact – an area where computing and technology can often have significant effects. The environmental impact of technology can range from harmful mining of materials, large scale energy usage, and improper disposal or waste of electronics known as e-waste. While there are many areas of technology with significant environmental impacts, data storage solutions are no exception.
Data storage vendors have begun releasing reports that document the environmental impact and sustainability of their solutions, and this information becomes another factor for companies making IT purchasing decisions. The overarching trend of vendors releasing sustainability information regarding their products is a positive one – it brings greater awareness to the environmental impact of IT and companies should be informed of the sustainability of a solution they are considering purchasing.
Unfortunately, the trend also brings about a slippery slope of misinformation and deceptive marketing tactics. As the environmental impact of a storage solution becomes an increasingly important purchasing criteria, vendors can capitalize on this by claiming superior sustainability than their competitors. While providing a more environmentally friendly solution than the competition certainly isn’t a bad thing, the industry as whole should be careful in how these messages are presented. Ambiguous claims of some percentage more efficient than a competing solution may sound like an appealing marketing message, but without proper transparency and validation it becomes merely another example of companies greenwashing for their own benefit.
To responsibly make such claims, vendors across the industry need to ensure that what they are claiming is accurate, transparent, and verifiable. A key piece to the environmental impact of a storage solution comes from the solution’s energy efficiency which can be affected by a number of variables including the computational complexity of a workload, the capacity stored, data reduction, data protection practices, and the storage devices themselves. Without being clear about these variables and the testing involved, specific claims about energy efficiency can lose their meaning, and can easily be distorted when compared to rival solutions with inconsistent configurations and tests.
In testing areas such as energy efficiency, vendors should work with independent third parties to perform unbiased, standardized testing and validation. Additionally, results should be open and transparent, as should the constraints and configurations involved. Without proper transparency and outside validation, marketing messages making bold claims about sustainability can be ambiguous at best, and downright dishonest at worst. By taking an open and transparent approach, storage vendors can elevate their messaging around sustainability in a way that informs and builds trust with their customers.
There are other bold claims besides superior power efficiency that vendors include in their ESG and sustainability reporting, but the concept remains that transparency and validation are required to make these claims meaningful. Messages about sustainable materials and supply chains should be traced and recorded in an open and verifiable way. Claims about reducing e-waste should be backed up by meaningful and verifiable testing that certain devices, techniques, or technologies can actually lead to less waste.
The trend of ESG reporting in IT can truly have a positive impact – it can help organizations reduce their own carbon footprint, and even drive innovation for more sustainable technologies and practices amongst IT vendors. But it can only do so if it is treated with respect and integrity, rather than as a marketing gimmick to drive sales. The storage industry must not forget why these reports are important in the first place. The goal should be to provide transparent details about sustainability to customers so they can make informed choices and reduce their own environmental impact. Vendors who do truly excel in their sustainability efforts should take pride in doing so and publicize their accomplishments – but they need to do so in a way that is honest and verifiable. Unvalidated claims without proper transparency only work to discredit the industry and harm what should be a collective effort to minimize the environmental impact of IT.