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How to Navigate the Wild West of ESG Reporting

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Karen Egan, Senior Vice President, Global Support, VMware

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Joe Baguley, Vice President and CTO, EMEA, VMWARE

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Are you confused about ESG metrics? You’re not alone. The number of different standards and frameworks for ESG reporting across the globe mean that it’s still a wild west for any business trying to figure out what and how to measure their ESG impact.

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Confusion further reigns when you consider that reporting is still not mandatory in every country, although this is <a href="https://www.scotsman.com/business/why-companies-need-to-act-now-to-get-their-esg-house-in-order-3434324">due to change from this year</a> for all UK private companies and limited liability partnerships, and potentially in the near future for U.S. companies if the Securities and Exchange Commission’s (SEC) <a href="https://www.sec.gov/news/press-release/2022-46">proposed rule changes</a> are approved .

Despite a lack of universal concrete obligations, reporting is important for any business wanting to track how they’re performing against their ESG goals. Especially when you consider that shareholders and other stakeholders increasingly demand accountable transparency to provide key insights for operational imperatives such as reputation management and talent attraction.

For the latest blog in our <a href="https://news.vmware.com/category/down-to-earth">Down to Earth series</a>, I discuss how – without clear, mandatory guidance on what and how businesses should be reporting on ESG – business leaders can put in place metrics that will help them achieve their goals.

Given the lack of one universally agreed framework, there is a lot of overlap between the ones that do exist. My advice to business leaders is to get to know the categories and unique data points in the frameworks that are specific to your industry and look for focus areas of overlap.

For example, within the technology industry, VMware is typically categorised as software and IT infrastructure across multiple frameworks<a href="#_edn1" id="_ednref1">[i]</a>, which places extra emphasis on cybersecurity, data privacy (customers and employees), Diversity, Equity and Inclusion (DEI) data, intellectual property protection, how to manage risks in a changing climate (including rising greenhouse gas emissions) and what we need to anticipate to make ourselves more sustainable and resilient. While every company should disclose a variety of ESG metrics as suggested by leading frameworks, the crucial focus areas specific to your industry are a good starting point when building your ESG reporting muscle.

Get your timing and audiences right

While there is no definitive guideline on the cadence of reporting, current best practice recommendations suggest internal reporting to the CEO, executive team and Board of Directors on a quarterly basis and an external ESG report for other stakeholders annually. Key audiences to keep in mind for external reporting include shareholders, employees, partners, suppliers, and community stakeholders. Your internal and external reporting should be treated as an opportunity to inform and engage, as well as to further operationalise ESG practices throughout your organisation.

Although best practices on reporting guidelines are in flux, we are already seeing proposed mandatory regulations that are putting specific dates in the calendar for reporting, often in line with traditional financial disclosure submissions. This trend of aligning ESG reporting with traditional financial reporting is often called “integrated ESG reporting”, and it encourages businesses to mature their internal processes in advance of upcoming regulations. In the UK, reporting of climate-related risks and opportunities <a href="https://www.icas.com/landing/sustainability/non-financial-reporting/climate-change-reporting-to-be-mandatory-for-largest-uk-entities">became mandatory</a> for the largest UK companies from 6 April 2022 and we’ve had mandatory <a href="https://www.gov.uk/government/collections/gender-pay-gap-reporting">gender pay gap reporting</a> since 2017.

Transparency is rewarded when it comes to ESG reporting. With ESG Raters and Rankers (third-party organisations that score businesses on their ESG performance based on either publicly available data or surveys filled out by the business), the more transparent you are the higher the score awarded.

ESG Raters and Rankers are mostly used by investors to help benchmark performance between companies, and they can also make or break whether a company can be included in certain indices on the stock market. For example, VMware earned placement on the Dow Jones Sustainability indices (DJSI) due to being recognised for our high ESG scores judged by S&P, which manages DJSI. Raters and Rankers can also help companies reflect on their own performance and identify opportunities for improvement.

Of course, transparency can be uncomfortable, particularly when there are no universal mandatory reporting guidelines to adhere to. However, transparency is useful as it can reveal both successes and areas to further develop and mature. Showing transparent progress even if you’re struggling to achieve your goals is encouraged and rewarded, so long as you’re showing that you have a plan. After all, ESG is a journey, and reporting is one step among many along the way. 

Prepare for future reporting now

While we wait for mandatory reporting to be regulated and set in stone, the best thing we can do as business leaders is put in place robust voluntary reporting now. Businesses that ensure their reporting follows best practice even before it becomes mandatory, will be one step ahead and remain set up for the future.

Do your research, find those overlaps, talk to your peers and don’t be afraid to show your successes and failures along the way. Put the work in now and you’ll be far ahead of the competition.

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Learn more about <a href="http://www.vmware.com/company/esg" target="_blank" rel="noreferrer noopener">VMware’s ESG strategy</a> and read VMware’s <a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/docs/vmware-esg-report-2022.pdf">2022 ESG Report</a> to see the progress we have made toward our 2030 Agenda goals.

<a id="_edn1" href="#_ednref1">[i]</a> VMware’s 2022 ESG Report was prepared with consideration of ESG data frameworks and standards including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Greenhouse Gas Protocol (GHG Protocol), Principles of the United Nations Global Compact, United Nations Sustainable Development Goals (UN SDGs) and Task Force on Climate-related Financial Disclosures (TCFD).

If you're confused about ESG metrics, you're not alone. Learn how and what businesses should be reporting.

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Joe Baguley is VMware’s Vice President and Chief Technology Officer for EMEA, joining VMware in July 2011. He helps develop and communicate VMware’s strategy and vision with customers and partners, using his wealth of experience to help organizations reduce costs and better support users and business needs. As part of VMware’s Office of the CTO and its representative in EMEA, Joe assists VMware’s customers in understanding how to use today’s advances in technology to deliver real business impact and plan for disruptive technologies of the future, as well as working with them to inform VMware’s R&amp;D processes. Joe is a recognized leader within the European technical community and is considered one of the world’s most influential IT global leaders, currently positioned 26th on Tenfold’s global list of the top 79 Chief Technology Officers. He speaks regularly at industry events, including The Economist’s Innovation Summit, to the broadcast media, including BBC World News and BBC Talking Business, and appeared in the Computer Weekly UKtech50 and the Information Age Top 50 Data Leaders. He has played a key role in CloudCamp and other events, communicating how cloud technology fits into the broader IT landscape. Joe previously spent 10 years at Quest Software where he was CTO of EMEA, shaping its direction and strategy. He is a member of VMware’s Executive Sustainability Council, a formalized component of the company’s Corporate Sustainability Strategy to provide insight and oversight, and to drive cross-company initiatives. In addition, Joe is also on several advisory boards at the European Commission and ETSI and is a founding committee member of the Data Centre Specialist Group at the British Computer Society, which helped shape the European Code of Conduct for Data Centres. Joe is based in the U.K. with a remit across Europe, Middle East and Africa.

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Joe Baguley

Did you know that the 50 million tonnes of e-waste generated every year will <a href="https://www.unep.org/news-and-stories/press-release/un-report-time-seize-opportunity-tackle-challenge-e-waste">more than double</a> to 110 million tonnes by 2050, making it the fastest growing waste stream in the world? It’s an issue that is particularly close to home for those of us living in the UK – we are the second-largest producer of e-waste – commercial and domestic - per capita, generating up to 23.9kg of e-waste per head.<a href="#_ftn1" id="_ftnref1">[1]</a>

From a domestic waste standpoint, there are various initiatives across the country to help combat the issue. The UK’s largest technology retailer, Currys, recently announced a new ‘Long Live Your Tech’ commitment which aims to tackle e-waste by educating, supporting and helping consumers to make more informed choices when buying and disposing of technology.<a id="_ftnref2" href="#_ftn2">[2]</a>

The commercial aspect of the problem is a little more complicated. Businesses across the globe are digitally transforming and with that comes the need to balance building the platform for the digital experiences that customers will want tomorrow without throwing out what exists today. There are initiatives popping up to help reuse e-waste such as the Royal Mint recovering gold from electronic waste to use in its coins and bars, expecting to process up to 90 tonnes of UK-sourced circuit boards per week.<a href="#_ftn3" id="_ftnref3">[3]</a>

But really the responsibility lies with business leaders to try and figure out how to balance the need for digital transformation in the new hybrid world while ensuring that we don’t reach that 110 million figure. In this latest blog for our <a href="https://news.vmware.com/search/down%20to%20earth">Down To Earth</a> series, I discuss how our view of the hardware lifecycle should change and why business leaders need to demand greater transparency around disposal or re-use.

End of life doesn’t mean end of use

I had the pleasure to present at tech, film and music festival SXSW in March this year after which I took a question from someone in the audience asking, “what do you do with hardware once it’s been decommissioned? Is there best practice? How do we go about defining a policy?”.

These are exactly the questions all business leaders should be asking because the lifecycle of a device or platform goes beyond the point of decommission. As a company that handles over 20,000 pieces of equipment annually, we are continually looking at how we can extend the life of our equipment through re-use and resale and donation programmes.

When equipment is at the end of its useful life, it is decommissioned and then resold or disposed of, depending on the condition and the value. Some equipment, such as laptops and monitors, are also provided as loaner equipment internally, if they are in good condition.

The key is to work with certified electronics recyclers with industry accepted responsible disposal certifications, like <a href="https://e-stewards.org/">E-Stewards</a>, <a href="https://sustainableelectronics.org/r2/">R2</a> and ISO (<a href="https://www.iso.org/iso-9001-quality-management.html">9000</a>, <a href="https://www.iso.org/iso-14001-environmental-management.html">14000</a>, <a href="https://www.iso.org/standard/63787.html">450001</a>). They can ensure secure transportation, destruction, and recycling of end-of-life equipment, including secure processing of equipment at the sorting facilities, safe working conditions and proper destruction of media. They also harvest components that can be repurposed, extracting precious metals to be resold and responsible disposal of the remainder materials.

So, when creating your e-waste programme, identify your priorities for how you want your equipment to be handled. Then do your research into trusted and certified electronics recyclers and responsible disposable vendors that reflect those priorities.

Things become a little more complicated when you consider that many businesses today are making use of hardware that they don’t own. When you are consuming services from a public cloud provider and decide to change what you are using, where does the hardware that supported the old services go? Should you care? How does your consumption of someone else’s hardware fit into your ESG or CSR programme?

The answer is – just because it’s not your technology, doesn’t mean you can’t ask questions about how it is disposed of or reused. Otherwise, you are making your ESG commitments someone else’s problem. As business leaders, you need to ask your cloud providers to be transparent about the lifecycle – even after decommission – of the infrastructure that they’re using.

It's time to reduce and re-think e-waste

Our use of hardware is not going to reduce – in fact, it’s predicted to grow 7.6% in just 2022<a href="#_ftn4" id="_ftnref4">[4]</a> – so it’s more important than ever that companies put in place achievable, impactful e-waste programmes to do their bit in reducing and re-thinking e-waste.

Remember what Annie Leonard, executive director of Greenpeace USA, said - “there is no such thing as ‘away’. When we throw anything away it must go somewhere”. And it’s our responsibility to make sure it goes to the right somewhere.

This article may contain hyperlinks to non-VMware websites that are created and maintained by third parties who are solely responsible for the content on such websites.

<a href="#_ftnref1" id="_ftn1">[1]</a> Vanessa Forti, Cornelis Peter Baldé, Ruediger Kuehr and Garam Bel, “The Global E-waste Monitor 2020,” 2020.

<a href="#_ftnref2" id="_ftn2">[2]</a> Retail Times, “Currys moves nation’s e-waste problem into sharper focus with announcement of a new ‘Long Live Your Tech’ commitment,” March 2022.

<a href="#_ftnref3" id="_ftn3">[3]</a> Sky News, “Royal Mint to turn electronic waste into gold,” March 2022.

<a href="#_ftnref4" id="_ftn4">[4]</a> The Business Research Company, “Computer Hardware Global Market Report 2022,” February 2022.

Companies need to put achievable, impactful e-waste programmes in place to help reduce and re-think e-waste.

Business leaders need to demand greater transparency around disposal or re-use. More in our latest Down To Earth ESG series.

Are You Making E-Waste Someone Else’s Problem?

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Making E-Waste Someone Else's Problem- VMware News and Stories

Ed sits on VMware's EMEA Technical Leadership team, supporting pre-sales teams as they deliver solutions for customers looking to build multi-cloud application platforms for both modern and traditional apps. He leads a virtual team of Application Domain Architects who are responsible for taking VMware's value in this space to our customers, and in turn look after an EMEA-wide Subject Matter Expertise organisation.

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Ed Hoppitt

It’s more important than ever that companies put in place achievable, impactful #ewaste programmes to do their bit in reducing and re-thinking e-waste. Read more in our latest #DownToEarth #ESG series. #VMware2030

It has been over three months since <a href="https://ukcop26.org/the-conference/cop26-outcomes/">COP26 2021</a>. And between the holiday period and the new year rush that have come since, it is fair to say that the hype has died down.

I was lucky enough to attend the event. I came away with renewed confidence that businesses believe they can enact tangible change. And it is change that I believe cannot wait any longer. So now that we are firmly planted in 2022, it is time that companies stand up and start acting in line with the enthusiasm shown around the event. They no longer have a choice but to show their commitment and act in order to secure a more sustainable world.

They simply won’t win big contracts from Financial Times Stock Exchange (FTSE)-listed companies or governments if they don’t have a compelling sustainability story or “clear and credible” carbon reduction plans, as recently <a href="https://www.gov.uk/government/news/firms-must-commit-to-net-zero-to-win-major-government-contracts">mandated</a> by the U.K. government. Some are already responding. <a href="https://www.zerotracker.net/analysis/post-cop26-snapshot/">One in three</a> of the largest public companies in G20 countries now has a net zero target, up from one in five in 2020. What’s more, pressure is coming from customers with <a href="https://www.theguardian.com/environment/2021/nov/01/cop26-polling-data-is-overwhelming-people-want-leaders-to-act">most Brits </a>(56%) believing that climate change will have a bigger impact on humanity than coronavirus.

So, where do we start to address the big commitments made at COP26? I believe with the innovative use of technology, embracing a hybrid working future and working together to drive more harmonized regulation and measurement, we—as business leaders—can help our communities and countries meet them. And there are three places I think we should start.

Digital Transformation and a Greener Economy Need to Go Hand in Hand

If you look at the targets set at COP26—including the U.K.’s “<a href="https://www.gov.uk/government/news/world-leaders-join-uks-glasgow-breakthroughs-to-speed-up-affordable-clean-tech-worldwide">Glasgow Breakthroughs</a>” aimed at speeding up affordable clean tech worldwide—and where we need to be in the next 10-20 years, most of the gains will be down to technology.

Investment in innovation is going to be vital. Thankfully, it’s where the market is going already with investors <a href="https://www.cnbc.com/2021/02/11/sustainable-investment-funds-more-than-doubled-in-2020-.html">pouring record amounts of money</a> into funds that aim to help the environment and promote social good in 2020. It is the companies or individuals that come up with innovative ideas to accelerate ESG that will be rewarded with investment, tax breaks and customers, which is why the international agreement on increased financing and investing of technology from developed countries to developing countries is so exciting.

But it isn’t just about creating the next big thing. As business leaders, we need to look to our own houses first. We must make sustainability intrinsic throughout any digital transformation project that we carry out.

How Virtualization and Multi-Cloud Can Deliver Sustainable Computing

We can make sustainability intrinsic by investing in technologies such as virtualization, which is the use of software to simulate hardware functionality and create multiple virtual machines on a single server. The benefit of this is that it allows for much more computation to be done with less energy. A <a href="https://www.vmware.com/learn/800033_REG.html">study</a> by Aurora Energy Research found that by increasing our use of virtualization technology, companies in Europe could reduce potential future computing emissions by 55% by 2040. And <a href="http://www.vmware.com/go/VMwareIDCWhitePaper2020">VMware’s own virtualization technologies have helped our customers to avoid putting more than 1.2 billion metric tons of carbon dioxide into the atmosphere since 2003</a>. That’s equivalent to 28,000 trips to Mars and back in energy since 2003. This is all part of VMware’s <a href="https://www.vmware.com/company/esg.html">ESG</a> approach, which not only addresses our own internal operations but also supports our customers meet their own ESG goals.

On the flipside—if there were no progress around virtualization—European computing emissions could grow more than 250% over the next 20 years.

The advent of <a href="https://news.vmware.com/leadership/enterprise-sovereignty-multi-cloudraghu-raghuram-ceo">multi-cloud</a> is also playing a central role in delivering sustainable computing by giving companies the opportunity to process data and move workloads on the most energy-efficient and carbon-efficient platforms available. Taking into account details such as the size of the data center that powers the cloud platform and even where it’s located—climate and the size of the local renewable energy market are important—will help customers choose the most sustainable option.

We have the technological capabilities at our fingertips. Now we need to innovate in our application of these capabilities and continually marry the need to digitally transform with the need to drive greater efficiencies.

The move to hybrid work offers a great opportunity here. By empowering and enabling employees to work from anywhere with modernized IT, we can naturally lower our carbon footprint while increasing our productivity. And how can we make sure we’re doing that in line with the COP26 commitments? Through measurement against regulations that harmonize across countries. How do we do that?

Enable a Greener Hybrid Era

The <a href="https://www.iea.org/commentaries/working-from-home-can-save-energy-and-reduce-emissions-but-how-much">International Energy Agency</a> recently did some calculations and found that “if everybody able to work from home worldwide were to do so for just one day a week, it would save around 1% of global oil consumption for road passenger transport per year. Taking into account the increase this would bring in energy use by households, the overall impact on global CO2 emissions would be an annual decline of 24 million tonnes (Mt)—equivalent to the bulk of Greater London’s annual CO2 emissions.”

It’s hard not to get excited by the potential here, particularly with <a href="https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/what-executives-are-saying-about-the-future-of-hybrid-work">9 out of 10</a> companies looking to combine remote and on-site working in the post-pandemic future of work. It’s a call to action to us, as business leaders, to ensure that we put in place long-term solutions to support this future, both to support hybrid work practices and to seize the sustainability benefits it brings.

We’ve seen the impact of this approach and the savings it bring us. Our <a href="https://www.vmware.com/company/esg.html">ESG</a> team here at VMware has been able to estimate that the <a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/sustainability/vmware-home-office-emissions-whitepaper-august-2021.pdf">overall carbon impact</a> of all VMware employees working from home is 2.5 times smaller than our pre-pandemic footprint, in which all VMware employees commuted to offices.

It does raise the question, however, of how companies measure themselves and benchmark their progress.

Influence Regulation for Greater Accountability

In its reporting on COP26, the <a href="https://www.ft.com/content/d91b5934-de9e-4eef-a008-697bce53263f">Financial Times said</a>, “The focus on voluntary corporate action risks weakening the drive for badly needed government policy interventions. Such concerns are driving pressure for the next chapter of the corporate response to climate change to be marked by fewer parties and press releases and by more verifiable standards, mandatory reporting and meaningful carbon prices.”

I couldn’t agree more. As business leaders, we need to work collaboratively with the government to implement standards that prioritize common definitions and obligations to drive greater direction, ownership and ultimately change. This includes the harmonisation of international standards and definitions. Without these, how do businesses know what to aim for? And how can they be held accountable?

A recent <a href="https://www.accenture.com/_acnmedia/PDF-166/Accenture-UNGC-CEO-Study-Sustainability-2021.pdf#zoom=40">survey</a> of global chief executives by Accenture and the UN Global Compact found that just 18% believe governments have given them the clarity they need to set goals in line with a 1.5°C (34.7°F) warming trajectory. We need stricter sustainability criteria within IT procurement for both the public and private sector. I think this starts with an independent data center registry to monitor emissions and create greater transparency with customers and investors about what they’re buying into.

Without the ability to measure properly and encourage real accountability, we simply won’t deliver on the changes we’ve agreed to.

Avoid the ESG “Sugar Rush”

Accountability to achieve ESG goals should also be held at the board level and businesses need to be measured on their achievements. Some companies are even starting to link board level bonuses with ESG momentum. In fact, almost <a href="https://www.bloomberg.com/news/articles/2021-10-06/executive-bonuses-in-britain-increasingly-hinge-on-esg-targets">half the annual bonus plans</a> awarded to executives at the biggest U.K. firms now include an ESG component, up from about a third just over a year ago. And in the U.K. alone, mentions of net zero in corporate reports have increased 370% in two years according to Datamaran.

Corporate climate action is already accelerating but there is still more to do. At COP26, Mohamed Adow, of the thinktank Power Shift Africa, said, “[The] announcements are eye candy, but the sugar rush they provide are empty calories.” We need to avoid the rush, work together, be accountable and lead the way for concrete change that nourishes and sustains our world.

This blog is part of a new series looking at providing clarity around the increasingly popular and at times complicated topic of Environmental, Social and Governance (ESG). Read other blogs in our <a href="https://news.vmware.com/category/down-to-earth">Down to Earth</a> series.

If you’d like to hear more about how we are enabling our customers and partners to achieve their own ESG goals, visit <a></a><a href="https://www.vmware.com/company/esg" target="_blank" rel="noreferrer noopener">ESG at VMware</a> and also read our<a> </a><a href="http://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/company/vmware-esg-report-2021.pdf" target="_blank" rel="noreferrer noopener">2021 ESG Report</a>.

How can companies make real change happen to address the big commitments made at COP26? There are three places to start.

Making Real Change Happen from COP26

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Making Real Change Happen from COP26 VMware News and Stories

We Made Big Commitments at COP26. How Can Businesses Make Real Change Happen?

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Robert Condon

How can companies make real change happen to address the big commitments made at #COP26? There are three places to start. #ESG #vmware2030

I’d like to place a bet with you. I bet that if you pick up or scroll through any newspaper, magazine, or social media feed you will come across an article or post about sustainability, carbon neutrality or renewable energy. The popularity of these topics is being driven by individuals, communities and our governments as they recognise the need to leave behind a better future for future generations. To achieve this we—as businesses and as a society—are setting ourselves strict goals: the U.K. has a <a href="https://www.gov.uk/government/news/new-plans-to-make-uk-world-leader-in-green-energy">legally binding goal</a> to reach net zero emissions by 2050 and the Irish Government has a <a href="https://www.climatechangenews.com/2021/03/25/irelands-government-agrees-climate-bill-set-2050-net-zero-goal-law/">goal to cut emissions by 51%</a> by 2030.

So, you may be surprised to learn then that <a href="https://yougov.co.uk/topics/finance/articles-reports/2019/09/30/third-businesses-have-no-plan-meet-carbon-neutral-">only 46%</a> of businesses in the U.K. have made plans to go carbon neutral by 2050. Even more surprising is that one in every three say they have no plans at all to be net carbon neutral.

Why, despite the evident need and constant conversations around climate change and net zero, is more action not being taken? I believe that it’s down to a lack of clarity, with many businesses simply not knowing where to start to make goals such as running an office on renewable energy a reality. In this blog—the second in a <a href="https://news.vmware.com/category/down-to-earth">new series</a> looking at the increasingly popular and at times complicated topic of Environmental, Social and Governance (ESG)—I share my experiences on achieving that reality.

Let’s Start with the Evidence of Success

Sky went carbon neutral back in 2006 and switched to 100% renewable electricity in 2016 with on-site wind power. Innocent sources two thirds of the electricity used in production from renewable sources, and it uses 100% renewable electricity and biogas to heat and power its head office. At VMware, we met our goal to have 100% of our operations powered by renewable energy one year early in 2019—all part of our collective efforts to drive toward net zero emissions in our operations and sustainability in our product solutions as part of our <a href="https://www.vmware.com/company/esg.html">2030 Agenda</a>.

And I am proud of the role that our site in Cork, Ireland, played in achieving that goal by running an office of 900 employees solely on renewable energy. But how did we achieve it and what did we learn that could help you pursue the same goal for your offices?  

As my colleague <a href="https://news.vmware.com/down-to-earth/down-to-earth-a-commercial-case-to-take-esg-seriously">Joe previously discussed</a>, any ESG programme has to prove that, as well as being the right thing for the environment, it also has to be commercially sound. So as business leaders, we have to build a case for this change and put our support behind it to show that a move to renewable energy is the right choice. That includes being able to demonstrate that the impact of any changes we introduce is measurable; from energy saved and the cost savings it has enabled to the people and community benefits of supporting local providers. Prove to employees and prospective employees you are a credible sustainable company with the evidence to back it up.

On our Cork campus, our employees are hugely socially conscious and passionate about how we can best protect the community and environment we live in. And they’re not alone: <a href="https://wiredscore.com/blog/2021/04/13/a-wiredscore-report-smart-buildings/">63% of employees say that</a> working in an environmentally sustainable office is very important to them.

Champion this curiosity and passion. Get employees on board by finding out what is important to them and what drives them through internal audits, focus groups, and regular opportunities to brainstorm and debate. Use this insight to help you build your plan. Task yourself and colleagues to challenge the way they think about the things used every day, how they use them and the energy they consume. One simple but significant change for us was moving to use fresh, clean Irish air to help cool our data centres. 

3. Understand Your Local Market

Our first step was to look at the energy market in Ireland, to understand who the local renewable energy providers were and what type of energy they could provide. Like us, you may decide you need expert help to better understand the options. Our external consultants offered recommendations on the type of contracts we could enter into, what they would deliver, how much it would cost and what the ROI would be.

This ultimately helped us identify and lock in the source of 100% of our electricity needs for the next few years—with a local utility provider supplying 100% renewable electricity.  

4. Interrogate How You Operate

Audits conducted by third-party experts can also help you understand how to optimise your energy consumption and make power savings throughout your existing building. This is especially important for less modern structures that aren’t LEED or BREEAM certified—as ours wasn’t. Because it’s not enough to just consume renewable energy, we also want to consume as little of it as possible.

It’s Time to Power Up and Make a Change

Be better than the 31% of British firms that have no plan to go carbon neutral. You don’t need to change everything at once. But a plan is better than no plan at all. And I hope these tips will help you start on the path to making renewable power a reality on one of your sites.

So, gather the curious, make your case, and deliver the change that will protect the community and environment we live in now and for the future. 

If you’d like to hear more about how we are enabling our customers and partners to achieve their own ESG goals, visit <a></a><a href="https://www.vmware.com/company/esg" target="_blank" rel="noreferrer noopener">ESG at VMware</a> and also read our<a> </a><a href="http://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/company/vmware-esg-report-2021.pdf" target="_blank" rel="noreferrer noopener">2021 ESG Report</a>.

How can you make renewable energy a reality at one of your offices? We share our experience in achieving that goal at our Cork, Ireland, site.

How can you make renewable energy a reality at one of your offices? We share our experiences in achieving that goal at our Cork, Ireland, site.

Powering an Office with Renewable Energy

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Powering an Office With Renewable Energy - VMware News and Stories

Can I Power an Office of More Than 500 Employees with Just Renewable Energy? 

Karen Egan is the Senior Vice President Global Support, VMware, based in Cork, Ireland. She is responsible for ensuring customers are successful in adopting the company’s newest technologies in their public and private clouds and ensuring customer success with VMware solutions, overseeing critical accounts and escalations for all VMware customers. Karen joined VMware in 2007 as a manager within the Technical Support team. Since then, she has remained in the Global Services division. Prior to this, Karen has worked for several American corporations including Motorola and Apple. Most recently at Motorola, Karen ran the support and new product introduction for 2G and 3G OMC products. With a background as a Software Engineer, Karen also developed and supported the development of software for Apple, specializing in the development of applications used in the manufacturing of desktop computers. With 24 years of experience in the Software and IT industries, Karen’s passion for customer management earned her VMware’s Global Support Person of the Year award in 2014. She was also named as International Leader of the Year at the FDM Everywoman in Technology Awards. Karen holds a BA in Math and Computing and a Higher Diploma in Applied Science (Modeling and Numerical Computing), both from University College Cork.

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Karen Egan

How can you make #RenewableEnergy a reality at one of your offices? We share our experiences in achieving that goal at our @vmware Cork, Ireland, site. #vmware2030 #ESG

ESG<meta charset="utf-8">—Environmental, Social, Governance. Everybody is talking about it, and certainly many organisations are acting on it. In 2020, ESG funds <a href="https://www.ii.co.uk/analysis-commentary/investors-put-almost-ps1-billion-month-esg-funds-2020-ii515374">attracted £1 billion a month on average</a> from investors.

Yet, for many businesses one big issue remains: how to translate their vision for ESG into a tangible strategy?

This is largely due to an information gap—between “what you should do,” “what you actually need to prioritise and why” and “how you can do what’s most important.” There’s an undeniable desire to see business through the lens of ESG but a lack of clarity over how to really get started.

Which is where this new content series—Down to Earth, of which I am honoured to be the first to contribute to—comes in. Along with select colleagues who are leading voices in their respective fields, we are hoping to provide clarity and tangible guidance on how to bridge the gap between aspiration and the reality of making responsible organisational change.

So, what exactly is ESG? To be clear, it is not CSR 2.0. It’s a response to rising pressure from consumers for businesses to commit to and demonstrate their part in driving change to be more sustainable, inclusive and socially responsible. And to do that in a way that is measurable.

And with that in mind, this first piece looks at how to sell the ESG vision to the board and, from there, make it a commercial success. Because, ultimately, it needs to make business sense and deliver commercially to be an intrinsic part of your business.

From my perspective, there are three key steps that you need to take when selling your ESG vision.

Step 1: Be a Leader of Change

There are various stakeholder groups when it comes to ESG—external (investors, customers), internal (board members, employees) and those in between (suppliers, communities). They all have an interest and are impacted by any ESG strategy that a company introduces.

That said, in its simplest form, an ESG programme is a change programme—one that needs to be led from the top. <a href="https://blogs.idc.com/2021/01/22/capitalizing-on-esg-the-business-case-for-sustainability/">Studies have shown</a> that it’s the CEOs and CFOs that are held responsible for ESG strategies today—a big change from previous corporate sustainability initiatives that tended to sit with HR, office managers or particularly passionate employees.

So the first step is to acknowledge the responsibility of leading ESG change at the executive level, and to then build the case for why the board needs to consider this strategically significant. Identify willing and relevant stakeholders within the business, to develop a holistic strategy that represents the passion and needs of the whole business and goes deeper on the practicalities of introducing change. This was exactly the approach we took to develop 30 cross-functional ESG goals to meet by 2030. This is what we call our <a href="https://www.vmware.com/company/esg.html">2030 Agenda</a>—all of which are a blueprint to achieve three business outcomes of sustainability, equity and trust.

Step 2: Create Your Business Plan

Once the direction is established, your stakeholders will need to be able to see how you can get there.

There is already a huge amount of data and examples publicly available showing why ESG is commercially vital. Take advantage of these, use them to reinforce your conviction and also inform the different tangents of your business plan.

It is a fact, for example, that customer loyalty lies with ESG. VMware research found that more than one in every three consumers (35%) would be willing to pay more for goods or services from a firm that has demonstrated how it is using renewable energy and supporting the transition to net-zero emissions. A further third say they would stop engaging with companies/buying brands if they don’t publicly share their ethical policies.

Investors, meanwhile, are clear that they want to keep investing in “good” and are planning to <a href="https://www.cityam.com/blackrock-sustainable-investments-to-accelerate-in-2021-as-esg-focus-intensifies/">double their allocations</a> to sustainable products over the next five years. Scottish Widows also <a href="https://www.cityam.com/scottish-widows-pulls-440m-from-investments-in-esg-push/">recently announced</a> that it is pulling millions in investment money from companies that don’t meet its ESG standards. As securing support increasingly relies on strong ESG credentials, audit and investigate what genuine proof points you can weave into your plan.

And take inspiration from the trailblazers. Research from McKinsey confirms that the most diverse companies are now more likely than ever to outperform less diverse peers. The return on equity for European listed companies was calculated as <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/49638/the_business_case_for_equality_and_diversity.pdf">11.4% compared to 10.3% on average</a> between 2005 and 2007.

Step 3: Don’t Rewrite the Rule Book

We of course can’t all redesign our companies from the ground upwards to be a purely green player. But the truth is that most companies already have an element of ESG in some form or another. So, this is not about blindly hitting CTRL, ALT, DELETE and starting again or shoehorning something new into the business for the sake of it. If it doesn’t feel right for your business today, it won’t likely survive to shape positive change tomorrow.

Rather, this is looking at how to build on current approaches through an ESG lens and working with your select group of internal stakeholders to narrow down a workable list of questions to address. For example:

core/list

Honestly, the main thing is to get started. Patagonia, one of the world’s most well-recognised purposeful brands, <a href="https://www.raconteur.net/corporate-social-responsibility/patagonia-ceo-on-leading-a-company-with-a-cause/">still uses fossil fuels to produce some of the outer shells of its coats</a>. But it is transparent about this and the fact that it is still searching for better ways to produce its products. Customers don’t expect you to be perfect from day one.

This is my rallying cry to you to get started today in evolving the collection of “good” executions that your company likely has in place already to develop a strong, impactful ESG strategy that will deliver commercially.

I hope these tips will act as a starting block to help you launch your company’s own strategy forward. And remember to keep an eye out for further blogs in this series coming soon with more down-to-earth, practical guidance on ESG.

How do you sell your ESG vision to the board? VMware's Joe Baguley discusses how businesses can translate vision into a tangible strategy.

How do you sell your ESG vision to the board? VMware's Joe Baguley discusses how businesses can translate their ESG vision into a tangible strategy.

Down to Earth: Is There Really a Commercial Case to Take ESG Seriously?

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Down to Earth: Is There a Commercial Case to Take ESG Seriously?

How do you sell your #ESG vision to the board? @VMware VP & CTO EMEA @JoeBaguley discusses how businesses can translate their ESG vision into a tangible strategy. #VMware2030

Down to Earth

Down to Earth - VMware News and Stories

Company

Company News - VMware News and Stories

Environmental, Social & Governance

Environmental, Social &amp; Governance - VMware News and Stories

Environmental, Social &amp; Governance

Sustainability

Sustainability - VMware News and Stories

Stories

Stories - VMware News and Stories

Read the latest cloud and app news from Ed Hoppit, VMware EMEA director of solution engineering of application platforms.

Latest by: Ed Hoppitt - VMware News and Stories

Joe Baguley is VMware’s Vice President and Chief Technology Officer for EMEA, joining VMware in July 2011. He helps develop and communicate VMware’s strategy and vision with customers and partners, using his wealth of experience to help organizations reduce costs and better support users and business needs. As part of VMware’s Office of the CTO and its representative in EMEA, Joe assists VMware’s customers in understanding how to use today’s advances in technology to deliver real business impact and plan for disruptive technologies of the future, as well as working with them to inform VMware’s R&amp;D processes.

Joe is a recognized leader within the European technical community and is considered one of the world’s most influential IT global leaders, currently positioned 26th on Tenfold’s global list of the top 79 Chief Technology Officers. He speaks regularly at industry events, including The Economist’s Innovation Summit, to the broadcast media, including BBC World News and BBC Talking Business, and appeared in the Computer Weekly UKtech50 and the Information Age Top 50 Data Leaders.

He has played a key role in CloudCamp and other events, communicating how cloud technology fits into the broader IT landscape.

Joe previously spent 10 years at Quest Software where he was CTO of EMEA, shaping its direction and strategy.

He is a member of VMware’s Executive Sustainability Council, a formalized component of the company’s Corporate Sustainability Strategy to provide insight and oversight, and to drive cross-company initiatives. In addition, Joe is also on several advisory boards at the European Commission and ETSI and is a founding committee member of the Data Centre Specialist Group at the British Computer Society, which helped shape the European Code of Conduct for Data Centres.

Joe is based in the U.K. with a remit across Europe, Middle East and Africa.

Articles by Joe Baguley - VMware News and Stories

Karen Egan is the Senior Vice President Global Support, VMware, based in Cork, Ireland. She is responsible for ensuring customers are successful in adopting the company’s newest technologies in their public and private clouds and ensuring customer success with VMware solutions, overseeing critical accounts and escalations for all VMware customers.

Karen joined VMware in 2007 as a manager within the Technical Support team. Since then, she has remained in the Global Services division. Prior to this, Karen has worked for several American corporations including Motorola and Apple. Most recently at Motorola, Karen ran the support and new product introduction for 2G and 3G OMC products. With a background as a Software Engineer, Karen also developed and supported the development of software for Apple, specializing in the development of applications used in the manufacturing of desktop computers.

With 24 years of experience in the Software and IT industries, Karen’s passion for customer management earned her VMware’s Global Support Person of the Year award in 2014. She was also named as International Leader of the Year at the FDM Everywoman in Technology Awards. Karen holds a BA in Math and Computing and a Higher Diploma in Applied Science (Modeling and Numerical Computing), both from University College Cork.

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