Resellers must ensure Environmental, Social and Governance (ESG) is prioritised to remain competitive, and appeal to investors and customers alike.
This is according to research carried out by CRN in conjunction with Agilitas.
Those in the technology industry are increasingly aware of the environmental impact of IT purchasing and day-to-day operations. Sustainability targets, pressure from investors and the desire to improve market reputation when it comes to green credentials means that ESG is moving up the business agenda.
This extends to organisations' supply chains, including their ecosystem of channel partners. Resellers are increasingly expected to provide solutions that reduce energy consumption and lower carbon emissions, among other factors.
Not only is this important as the urgency to act to limit the impact of climate change increases but will also help resellers stand out from the crowd. Channel partners need to lead by example, ensuring they are transparent when it comes to their ESG credentials and avoid greenwashing.
Prioritising green
When asked whether ESG credentials are an important factor when choosing a channel partner, 47 per cent of IT leaders surveyed agreed, with 41 per cent neither agreeing nor disagreeing and the rest disagreeing.
However, when asked to identify the most important factor when choosing an IT reseller, sustainability credentials were bottom of the list, with only 6 per cent identifying it as the most important factor.
While sustainability may not currently be top of mind when it comes to the criteria that customers judge partners on, this is very likely to change in the near future as those that fail to act now to ensure their organisation is improving its ESG credentials may face substantial financial and business impact in the years to come.
More and more, organisations rely on their channel partners to provide skills and expertise as well as technology solutions. Channel partners must be on hand to ensure their customers understand the environmental impact of the technology they adopt and demonstrate good environmental practices across their supply chain - as well as offer carbon footprint monitoring and auditing services.
When asked how they expect their channel strategy to change over the next two years, responses included: "more focus on sustainability and cyber security credentials than the traditional measures", "we will focus more on partners with defined sustainability credentials" and "we will add sustainability and other criteria to our selection and review criteria".
Investor pressure
Investors are increasingly favouring organisations with good ESG credentials as they are viewed as lower risk, better positioned for the long term and prepared for future market uncertainty. Channel partners risk missing out on investment if they do not set and stick to ESG goals.
When it comes to end user organisations, thirty-four per cent of IT leaders agree that their business is under increasing pressure from investors in this area, with 26 per cent disagreeing, and 38 per cent neither agreeing nor disagreeing. This suggests pressure from investors in this area may be growing but is not universal.
For channel partners, ensuring their customers are well-positioned to appeal to investors in a market that places greater value on ESG is key.
A sustainable supply chain
Improving ESG credentials goes further than the four walls of an organisation and must include the supply chain.
When asked how often they audit their supply chain's ESG credentials, just 15 per cent of respondents said they regularly carry out an audit, with 44 per cent answering, "somewhat regularly". Twenty-four per cent said they are not currently auditing but have plans to start, and 18 per cent have no plans to do so.
Understanding the environmental impact of your supply chain can be a complex undertaking. When asked to rate how difficult it is to audit sustainability within their supply chain, where ten was very difficult and 1 was not difficult at all, 30 per cent rated their organisation an eight or above.
There is room for improvement here and this may indicate that many organisations do not have the resources or expertise to carry out regular ESG audits, meaning there is an opportunity for channel partners to offer assistance.
Attracting and retaining customers in a climate where ESG is increasingly top of mind should be a priority for resellers of all sizes. As the UK technology channel undergoes a period of change following the upheaval of the past two years, this is more crucial than ever.
By encouraging ESG to be at the forefront purchasing decisions, the channel can make a positive impact not only on the environment but also the bottom line.
This article was funded by Agilitas.
