Environmental, social, and governance (ESG) is on course to remain a long-term strategic priority for technology service providers and enterprises, even in the midst of recent unpredictable events with less-than-ideal consequences, according to GlobalData.

New research from the analyst firm revealed the COVID-19 pandemic, trade disputes, and geopolitical uncertainty impacted organizations' short-term priorities and digital transformation efforts, but ESG emerged unscathed. Progress on ESG initiatives "during 2022 in enterprise tech was solid" and became "a tangible move toward delivering results following previous hype," Senior Analyst Robert Pritchard wrote.

The majority of leading service providers actively measure and report on climate and social targets in a nod to transparency, the corporate responsibility to limit their negative impact on the environment, and proving they can deliver results for enterprise customers. "Product and service innovations can deliver operational efficiency, enhance productivity, and ultimately improve customers’ bottom lines," he explained.

But enterprise customers aren't the only ones experiencing the benefits of ESG progress. Technology service providers can build new revenue streams with services that help organizations reach their ESG goals, "both with new products – sometimes co-created with customers – and in providing platforms to help report on areas such as sustainability and energy usage along the supply chain to meet scope 3 targets," Prichard noted.

Cloud service providers like Google Cloud, Microsoft, and Amazon Web Services (AWS), for example, offer tools for customers to measure, report, and reduce the carbon emitted from their use of the provider's cloud services.

Pritchard expects the United Nations COP program, customer demand, regulation, investor and talent influence, and government interventions will be the main drivers supporting the continued health and growth of ESG markets and services.

"The climate crisis is evident around the world, and many challenges need addressing in the social and governance fields. But it is not all gloom and doom: genuine progress is being made to address the climate crisis, and tech ESG solutions can deliver new revenue streams and cement longer-term customer relationships at a time when many legacy products and services continue to commoditize," Pritchard concluded.