The global technology sector is poised to lead the transition to a sustainable future. Technology companies are accustomed to thinking ahead of the curve and innovating on Sustainability and Environmental, Social and Governance (SESG) issues in order to gain a market advantage and provide solutions to global social issues such as environmental issues and workplace diversity.
Pursuing sustainability is a relentless and complex process in which the yardsticks for success are constantly evolving. For smaller companies, aligning their business objectives with their sustainability vision is not always enough to ease the demands for commitments to SESG. For example, a company which develops renewable energy technologies may have a strong environmental sustainability agenda but still have gaps in its handling of wider social issues such as employment practices and community engagement. For larger companies there is an increasing expectation to not only maximize shareholder value but take a broader role in addressing society’s most pressing issues.
Ethics and innovation
With businesses collecting more data, their understanding of consumers, employees and supply chains is changing. As businesses considerations account for both their investment performance as well as their social performance there is a convergence of business and human rights agendas. Issues related to business ethics, data management, privacy concerns, consumer litigation risks, and regulatory compliance are now all in play. High-profile data breaches in the industry have also heightened concerns not just about the security of data but the applications from it. Technology companies need to build the trust of stakeholders - for example, by improving data governance through audit processes to assure the integrity of data and by increasing accountability and transparency in use of consumer data. Other ethical issues concern fairness and influence. For example, AI and robotics can be used help to eliminate bias in hiring processes but, at a time when the focus on ensuring diversity has never been greater, AI learning has also been shown to foster implicit gender and racial bias.
Emerging companies and venture capital investment
Corporate investors are investing heavily in emerging companies that seize upon the opportunities SESG issues present. And start-ups understand that integrating SESG policies and practices into their business models allows them to attract these investments and create brand recognition, while laying the foundations for long-term value and growth.
Technology is essential for the transition to a net-zero low-carbon future. Innovations in cleantech, autonomous vehicles and drones may play a leading role in reducing greenhouse gas emissions, improving on energy efficiency, accelerating demand for renewable energy, and finding solutions for the transformation of our energy systems. A familiar example: digitalization and cloud storage services are transforming business operations by reducing paper usage. The latest iteration of our biannual tech research survey, the European Technology Index 2020, reported that energy-efficient technologies are a key area of interest and growth in the sector.
However, while digital technologies are improving, they continue to face environmental issues, such as energy consumption, materials sourcing issues such as mining of rare minerals, and disposal of unrecyclable e-waste. The pressure to resolve these issues has been growing exponentially as technology integrates more thoroughly into our lives. Pressured by consumers, some companies are striving to mitigate environmental risks through improved product design, closer supply chain oversight and product life cycle management.
Diversity in tech
Recent years have seen a marked trend in company responses to improving diversity and inclusion in the technology sector. As discussed in our recent TechLaw Podcasts, data-based findings revealing stark gaps in representation in major technology companies have driven policy shifts, public disclosures and changes in investment strategy across the sector. In particular, there has been a push to address the lack of gender representation both at the board level and in the workforce.
The DLA Piper advantage
DLA Piper’s global technology sector assists companies of all sizes, from fledgling startups to global giants, wherever they are in their SESG journey. We partner with our clients to help them meet their SESG objectives, manage potential risks and leverage opportunities, and provide legal support in such areas as:
- Corporate Venture
- Data Protection, Privacy, and Security
- Emerging Growth and Venture Capital
- Global Governance and Compliance
- Public Company Corporate Governance
- Regulatory and Government Affairs
- Technology Transactions and Strategic Sourcing
In addition, our team of DLA Piper attorneys has extensive experience working with clients dedicated to SESG across the technology sector including:
- Artificial Intelligence
- Autonomous Vehicles
- Digital Transformation
- Internet of Things
To discuss the implications of these issues for your business, please contact our ESG leaders