SAN FRANCISCO – Sustainability and environmental, social, and governance (ESG) topics are boardroom buzzwords, but a lot of the pressure to operate responsibly is coming from employees, VMware CEO Raghu Raghuram said during an executive Q&A at VMware Explore 2022.

Raghuram highlighted VMware's annual ESG reporting process and explained "this is an important part of discussion in our board committees during the year, so this is an ongoing topic." He added, "Increasingly, the public companies' employees care about this."

According to VMware President Sumit Dhawan, ESG is "a priority for the board because the stakeholders, whether it's employees or shareholders of the company, demand the executives to act on it." 

Just as an ESG-conscious company producing physical goods has to manage all aspects of the lifecycle of selling those goods, a company like VMware should be aware of the carbon emissions resulting from customer use of its products and services. 

"As you're growing your digital efforts, the last thing you want the CIO to do and the last thing the CFO wants to do" is add on to the carbon footprint the company is working to reduce, Dhawan explained. "So it's certainly a priority for almost anyone who is in factoring [or] physically going through a significant effort of reducing the carbon footprint," he said.

VMware also ties ESG annual objectives and key results (OKRs), set by its ESG leadership council, to its executives' compensation measured by success in implementing sustainability strategies or reducing environmental impact.

Read all of SDxCentral’s VMware Explore 2022 coverage here.