We are all now familiar with the IoT (Internet of Things). From personal gadgets such as fitness trackers and smart fridges to industrial applications like monitoring in factories and smart waste management systems across large cities, the role that IoT plays in our lives continues to grow exponentially.

As with everything we do in the modern world, sustainability is a key factor within the IoT, as both individuals and companies try to reduce their carbon footprint. It is vital that ESG in IoT (Environmental, Social and Governance factors) are taken into account, in order to ensure that efficiency is maximised, and by extension, sustainability. 

Breaking down ESG

ESG is very often discussed as a single issue. Although it is true that environmental, social and governance factors are intrinsically connected, each one has its own distinct features, which need to be considered individually, as well as part of the wider ESG ecosystem.

Environment

Sustainability is a buzzword across all economic sectors. While we usually associate high emissions with transport, manufacturing and other traditional industries, the tech sector is no exception – just think of the amount of discussion about the carbon footprint of crypto currency mining. 

However, a sustainable approach to technology isn’t just about minimising your carbon footprint. It can actually play a significant role in reducing overall global emissions. Let’s take a look at how IoT can improve the environment.

Applicable across a wide range of industries, IoT is one of the fastest growing tech sectors, worth over $300 billion in 2021, and expected to have more than doubled by 2026.

Such huge growth means that the effect on the environment must be taken into account, but this is where IoT excels. Although the volume of devices used is huge, the devices themselves tend to be small, and small means efficient. 

This size advantage means that fewer resources are used in the production of IoT devices, and therefore there is less waste. Also, the embedded systems used in IoT devices are adapted for memory smaller than that of a computer. With the growth of IoT popularity, there is a demand for a more complex functioning, thus creating systems which fit into the available memory, yet are still able to perform a variety of functions.  

Social

Industry has always had a bad reputation as far as overuse of resources goes, so it is important that new companies in tech fields are perceived by the public to be adopting more environmentally sound practices. Many are readily embracing the goal of leaving a smaller environmental footprint, even making it their social mission. 

Competition is fierce and prices can only be cut so much without compromising on quality. Customers love a company which cares about the environment, so promoting company values which are socially aware is a great way to gain a competitive advantage.

This is where IoT comes into its own, with its agility and versatility. With IoT technology in use in such varied fields as waste management, smart buildings, construction, agriculture and logistics, it makes perfect sense to prioritise environmentally sound practices, while shouting from the rooftops to let the public know all about it. Not only does the company look socially responsible but by increasing efficiency and reducing wastage, cost savings can also be achieved. 

Governance

Governance is critical in evaluating a company’s overall sustainability and societal impact. It covers issues such as transparency, accountability, and ethical decision-making. This aspect of ESG is essential for building trust and integrity with stakeholders, and for ensuring that a company is being run responsibly and sustainably.

IoT has the potential to revolutionise company operations, and can be used to improve governance in several ways. IoT’s ability to provide real-time monitoring and data analytics can make companies more transparent. This in turn helps them become more accountable and ethical in their decision-making. By using IoT in their risk management, and compliance with regulations, companies can ensure that they comply with the highest ethical standards, which is so vital in today’s sustainability-oriented world. 

Conclusions

21st century consumers using state-of-the-art technology subscribe to modern values, and demand that the companies they buy goods from and services from do the same. ESG is the blueprint for running a company sustainably across all industry sectors. Each aspect of the ESG ecosystem is unique, yet one part could not exist without the others. The emergence of IoT as an integral part of ESG will only continue to help companies reach their sustainability goals over the coming years.