ESG (Environmental, Social, and Governance) and ITAD
Because ESG ratings are becoming increasingly important, more worldwide organizations are partnering with respected, sustainable ITAD vendors.
Environmental, Social, and Corporate Governance (ESG) has gained widespread acceptance among organizations worldwide. Those who adhere to sustainable and socially responsible principles stand to gain from higher ESG rankings, making it more vital than ever for organizations to take the initiative and become proactive in their approach to sustainability.
Having an ITAD policy in place and consulting with an ITAD vendor is one of the most effective strategies to obtain higher ESG rankings. This post will discuss how ITAD may help your company’s ESG initiatives.
What is ITAD?
ITAD stands for Information Technology Asset Disposition (or more commonly: IT Asset Disposition). In a nutshell, ITAD is a system of processes and practices for recycling, disposal, refurbishment, and/or repair of end-of-life IT assets. Furthermore, ITAD operations such as hard drive disposal and data destruction should be carried out in a sustainable and ecologically friendly manner.
While some ITAD activities, such as ITAD policies and IT asset inventories, can be delivered within an organization, organizations have increasingly begun to consult ITAD providers who specialize in secure and efficient ITAD services. To name a few advantages, an ITAD Company like Wisetek may provide an organization with a comprehensive range of services that improve data security, compliance, and initiatives toward long-term corporate social responsibility (CSR) goals.
Our earlier blog post about ITAD contains more information: What exactly is ITAD?
Explaining ESG (Environmental, Social, and Governance)
Executives in a modern organization are almost certainly aware of CSR and its significance; sustainability and environmental impact issues have become increasingly important in CSR since the late 1990s.
The phrase “Environmental, Social, and Corporate Governance” (hereinafter ESG) was coined in 2004 by financial institutions at the request of the United Nations as an extension of sustainability in CSR. It rose to prominence with the UN’s Sustainable Development Goals (SDGs) in 2015 and has since been a commonly used word in industry and the public discourse.
ESG is a global method used by organizations to evaluate less tangible aspects of business operations, such as social obligations, attaining specified environmental and sustainability goals, and corporate governance in relation to diversity, equity, and inclusion.
Why a Good ESG Rating is Important
Financial institutions and asset management organizations assess the ESG performance of companies around the world and assign an ESG rating based on the organization’s compliance and sustainability promises.
The metrics and factors considered by rating agencies may differ, but it is important to note that prominent ESG ratings such as the Dow Jones Sustainability World Index and Bloomberg’s ESG dataset contain comprehensive data on tens of thousands of organizations, which is becoming increasingly sought after by institutional investors (and to a lesser extent, retail investors).
A solid ESG grade is vital because many institutional investors now value environmental sustainability (together with social and corporate governance) as much as profit. As a result, independent of stock performance, a low ESG rating may make a publicly traded firm less appealing. In contrast, a strong ESG rating may entice investors even if stock performance is subpar.
How ITAD Companies Can Assist in Improving ESG Ratings
There are numerous ways in which an ITAD firm can assist a company in improving its ESG scores. Obviously, the emphasis will be on the E, environmental sustainability, rather than the other two.
As ITAD is concerned with the disposition of redundant IT assets, which are a type of electronic waste (e-waste), minimizing e-waste and diverting it from landfills entirely will have a substantial influence on sustainability and, as a result, improve the organization’s ESG performance.
Wisetek accomplishes just that. Our Zero-Landfill Policy and Certified Recycling solutions ensure that no unnecessary e-waste is thrown in landfills, but rather recycled or remarketed. Any refurbished hard drives, computers, mobile phones, or other items are resold through Wisetek Market, contributing to a Circular Economy model.
ITAD Services’ Environmental, Social, and Governance Benefits
Some of the advantages that ITAD services can bring for ESG performance are as follows:
ESG reporting: When firms have a clear and coherent concept of how many obsolete assets are recycled or remarketed rather than discarded, it allows for some measurable reporting on ITAD-related sustainability issues. Better reporting enables leaders to take calculated action in the future to strengthen the organization’s sustainability initiatives.
Socially responsible investing: Organizations that retain ITAD vendors to assist in meeting sustainability goals through e-waste reduction, increased recycling, and rehabilitation of superfluous IT assets may attract more investor attention.
Legitimacy: Many people, often correctly, accuse firms of ‘greenwashing’ through ostensibly sustainable projects. Using competent, auditable ITAD services from a leading team of professionals like Wisetek will provide your organization with actual, measurable benefits that are not greenwashed.
Improving ESG Initiatives Requires ITAD
Even before ESG became popular, accountants had to deal with intangible assets like goodwill. Most ESG measures are qualified and difficult or impossible to quantify, whereas ITAD services contribute to making environmental sustainability for redundant IT assets a measurable statistic for ESG reporting.
Furthermore, practically every organization in every sector and industry deals with redundant IT assets; marginal gains vary widely amongst businesses, but all will profit in some manner from long-term IT asset disposition.
Working with Wisetek can help you improve your ESG performance.
Wisetek is a global pioneer in IT asset disposition, including Data Center Services and Data Center Decommissioning, as well as ecologically friendly hard drive destruction and secure data destruction. Our procedures assist organizations in being compliant and sustainable, and can thereby improve your ESG performance.