As a critical component in business, ESG symbolizes a new set of criteria for companies to follow to maintain industry standards. ESG reporting has become more popular in the value-added IT asset disposition (vITAD) era to provide more transparency and accountability to clients. ESG represents a company’s environmental, social, and governance policies as more businesses become environmentally conscious and strive to reduce their carbon footprint. ESG also helps companies seeking to connect with eco-friendly businesses find others with similar ESG goals.
vITAD
To understand where ESG came from, we must first look at the industry itself. IT asset disposition has grown tremendously and continues to change as technology evolves. During the past decade, the most significant change has been the evolution of technology and the birth of a digital age. This has led to high device turnaround rates as consumers try to keep up with the latest models. Another more recent, notable shift is the remote work environment. Experiencing a pandemic thrust the world into an age of working from home and created new requirements in the industry, such as support for remote workers. These changes, combined with the influx of technological advancements, resulted in new facets of the ITAD industry in addition to traditional core services. HOBI refers to these new facets as value-added ITAD, or vITAD. Value-added services like remote management, ESG reporting, ERP integration, and donations programs help clients navigate the obstacles of these recent changes and help ITAD enterprises continue to provide IT asset disposition services to clients.
Environmental
Environmental criteria examine what strategies are in place for potential environmental risks and how a company plans to manage or mitigate such risks. For example, they consider whether or not the company owns contaminated land, how much energy it consumes, if its products are recyclable, how it complies with environmental regulations, and how it manages and disposes of hazardous wastes and toxic emissions.
Social
Social criteria refer to a company’s relationship with its employees, clients, and community, how it manages employee health and safety, and its stances on public issues such as human rights and labor standards, employee engagement, data protection and privacy, and inclusivity initiatives.
Governance
Governance criteria focus on the amount of transparency and accuracy a company presents in accounting and reporting methods, as well as audits, leadership, executive pay, and shareholder rights. Investors want to know how the company treats its shareholders and how much weight is put on their opinions. Governance also focuses on company policies, principles, and procedures governing leadership, board composition, executive compensation, and political contribution.
ESG in ITAD
ESG is accomplished in many ways in the ITAD space, beginning with environmental procedures. ITAD vendors mitigate any potential environmental liability via electronics recycling. Recycling retired IT assets not only keeps them out of landfills but also provides used materials for device manufacturing to help reduce the time and energy required to mine new materials. Repair and remarketing ITAD services maximize the value of retired IT hardware and help bridge the digital divide by providing electronics to those without access. To achieve governance ESG goals, ITAD enterprises often maintain a number of certifications and practice legislative compliance throughout the disposition process.