After COVID, what’s the next big tech risk you won’t anticipate?
We think it’s climate change and here’s why....
We all know climate change is becoming a risk to the way we live our lives with the potential for increased flooding, bush fires and typhoons but why will these impact businesses and in particular tech?
Let’s start with what it means for tech. The global tech industry is a huge user of power in data centres, with the energy consumption equivalent to that of Denmark. As the world of connected everything comes into place and more and more data is produced, with more intensive algorithms to analyse it, energy demand could grow exponentially. The world has moved forwards 5 years in its tech adoption overnight, so when we see Edge Computing, IoT devices and superfast networks all developed and upgraded due to increased demand, the power and material consumption could increase significantly.
If you then think about where all of that equipment would need to come from (factories, often powered by coal energy) and produced either from plastics (oil) or metals and minerals (mining) both of which are heavy polluters, the tech industries Scope 1, 2 and 3 emissions profile becomes pretty high.
From a regulatory standpoint we’re starting to see the finance sector be stress tested for the first time on its ability to avoid climate shocks. Mark Carney led this before he left the Bank of England and the ECB governor, Christine Lagarde labelled climate change as ‘mission critical.’ Imagine a world where banks lend only to the greenest companies. Having spoken to many senior bankers in the past, they are starting to favour this and transform their balance sheets. This means the tech world needs to adjust its operations to appeal to future financiers and generations of millennial investors who want to put their money into greener companies.
The tech industry is making great strides with Microsoft committing to be carbon negative by 2030 and Apple setting an ambitious target where new iPhones, Macs and other products are made from 100% recycled materials in the future.
CIOs and CTOs of enterprises need to think about this now. Employees of the future will demand to be part of a company which has a green strategy so it will be crucial to get hold of the best talent. Many companies will be asking this of suppliers as investors and financiers pile pressure on them.
So ask yourself, how green is your tech strategy? And what can you do to prepare?