With the emergence of stakeholder capitalism and responsible investment, many companies are looking at ways to improve their ESG criteria. METCloud explores the role that computing plays in ESG.
January this year, the World Economic Forum had a resounding message in the Davos Agenda. Covid-19 had uncovered the cracks in our existing global economic system and no institute or individual can address the environmental, social or technological challenges faced by our interdependent world on their own. We need to work together in order to create sustaining system reforms for a brighter future.
Enter the revitalised call for stakeholder capitalism. While the term is not new, it essentially describes the reimagination of the global economy where the profitability and wellbeing needs of all stakeholders are met. This might seem like a very tall order without the appropriate framework. However, many tools are available today in order to facilitate this reform step-by-step and it lies in how.
What are ESG Standards?
Environmental, Social and Governance (ESG) standards are the three central ethical benchmarks on a company’s operations. With social media dominance being a powerful reckoning platform for business deeds and misdeeds, astute investors today are looking to ESG factors to gauge their ethics as well as profitability.
While there are various aspects that a business should observe under each of the three core pillars of ESG, the objective is simple – to turn words into action. ESG is not a box ticking exercise for the sake of PR, it exists to demonstrate a business’s commitment to the betterment of the future global economy in the wake of the present economic situation.
The role that IT plays in ESG Standards
One of the elements under the social pillar of ESG requires businesses to ensure data security and customer privacy. In a world of relentless cyber criminals and ransomware threats, protecting confidential data is not only paramount, it is also a huge and challenging responsibility.
The use of blockchain, AI/ML and data analytics in modern business require robust and secure computing. While this responsibility can be taken on in-house with a highly specialised team and business-owned servers within the company vicinity, there are two factors that need to be considered:
- This can be a very costly investment. Aside from the remuneration costs of having this specialised team on hand, servers in situ can be vulnerable to various scenarios like theft, damage and even, natural disasters.
- The environmental pillar of ESG looks at the ecological impact of a business. This means that carbon emissions and footprint will be taken into consideration. If not managed properly, an in-house server can have a significant impact on a business’ carbon footprint.
The most logical solution for many small-medium enterprises will be cloud computing as they provide scalable and secure computing solutions while helping a company achieve ESG compliance.
Technologies that are Powering ESG
While there is a lot of talk about blockchain in light of the cryptocurrency boom, many are still struggling to understand the technology and its potential outside of the bitcoin context.< Simply put, a blockchain is a digital, public ledger that is decentralised. Every activity (transaction) made on a blockchain is recorded across several computers connected through the internet. As blockchains do not have a central point, the information stored across these computers make it incredibly hard for any cybercriminals to compromise data. This is appealing because blockchain has proven to be very secure, improve transparency and empower the communities that it is built to serve. Blockchain technology is already being used to help marginalised communities by organisations like Unicef.
ARTIFICIAL INTELLIGENCE (AI)
As we push forth into the fourth industrial revolution, one of the key proponents is AI. With the ability to process, analyse and learn from a vast amount of data, AI is primed to help solve some of the most pressing issues faced by civilisation. The advances in Machine Learning (ML) and the rate in which AI is deployed across daily applications mean that the emerging economy of the future can really optimise on transparency, accountability and impartiality to create trust.
This is relevant to IT because AI and ML create a strong foundation for cyber resilience and cybersecurity. In a world where data is the currency of civilisation, these aspects are non-negotiable in developing and scaling future-proof businesses. As the threat of cybercrime is universal, it is evident that the global economy is a symbiotic entity that requires great cooperation and collaboration in addressing key security threats.
Why does it matter for SMEs?
An extensive cross-examination of more than 160 studies by Deutsche Bank found that 85% of businesses that took ESG seriously tend to benefit from better financial performance. Furthermore, they discovered a strong positive correlation between investor enthusiasm and stock market performance for businesses that maintained good ESG management.
Small-medium enterprises that are looking to scale up in operations today need to appeal to astute investors that are looking at more than profitability. The global market is demanding for businesses that possess a strong ethical compass.
How METCloud can Help
Most recently recognised as the Cybersecurity Firm of the Year by Finance Monthly in the 2021 FinTech Awards, METCloud’s multi-award winning cloud computing platform is fully scalable for small-medium enterprises irrespective of whether they are start-ups, scale-ups or established.
METCloud is ahead of the curve and committed to providing the future of information technology. The company provides its own private cloud capability with symbiotic relationships with other cloud providers such as Azure, AWS, GCP and IBM Cloud.
With the burgeoning reliance on connectivity today, METCloud recognises the non-negotiable role of cybersecurity. With cybersecurity at the heart of the organisation, METCloud’s mantra, ‘get connected, cyber safe’ is at the core of everything that they do.
For more information about METCloud and how we can help with your business endeavours through cloud computing, feel free to contact the team.