The role of traditional ITAD is changing, and one of the new criteria is ESG reporting. With three focus points in regards to how well a company performs with respect to environmental, social and governance issues, ESG represents a significant change in industry standards. By disclosing environmental, social and governance data, companies are able to shed some light on ESG performance and compliance, improve investor transparency, and become more environmentally aware.
ESG represents a significant environmental change in industry standards as more businesses strive to reduce their carbon footprint. Many companies have set more sustainable goals, and worked to reduce energy consumption. In ESG reporting, environmental criteria examines what strategies are in place for potential environmental risks and how a company plans to manage or mitigate such risks. For example, whether or not the company owns contaminated land, how much energy it consumes, if the products it produces are recyclable, how it complies with environmental regulations, how it manages and disposes of hazardous wastes and toxic emissions.
ESG social criteria refers to a company’s relationship with its employees, clients and community, how it performs in regards to managing 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.
ESG governance criteria focuses 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 is accomplished in many ways in the ITAD space, beginning with environmental procedures. ITAD vendors mitigate any potential environmental liability via electronic 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. Some facilities even offer repair and remarketing services, which provides alternative sales channels rather than purchasing brand new devices.
A large part of social criteria in ESG reporting is data protection and privacy, and a large facet of IT asset disposition is data security. Many ITAD facilities like HOBI erase data from every device before disposition to ensure no data is leaked, and take special precautions including padlocked cages and security cameras to ensure clients’ assets are protected.
As a new industry standard for IT asset disposition enterprises, ESG goals are becoming more prevalent and expected, and it’s important to understand the different facets in ESG reporting in order to apply them to enterprise practices.