Channel companies’ environmental, social and governance (ESG) strategies have never been more important than now. As the effects of climate change continue to be felt more keenly and fair practices come under the spotlight, so companies are increasingly being held to account by their shareholders, customers and employees.
That’s paramount in a telecommunications and IT industry with a vast network of data centres, hardware, software and services, all of which are major contributors to global carbon emissions. So, what do partners need to focus on to ensure that they are sustainable for the future, comply with the latest standards and carry on meeting these ever-growing boardroom and client expectations?
“An ESG strategy must not be seen purely as a box-ticking exercise, but as a framework to outline dynamic and innovative ways to drive sustainability and business value,” said Caroline Griffin Pain, chief legal officer, Colt Technology Services. “Focusing on the most material topics is critical: financial materiality refers to those ESG issues that have a significant impact on an organisation’s financial performance and valuation, while impact materiality refers to its impact on the environment and society, and how a company’s products or services affect external stakeholders, including customers, suppliers and peers.”
Among the biggest challenges in designing and implementing a comprehensive and effective ESG strategy are cost, compliance and culture. Businesses need to invest in and keep up-to-date with regulations, but if they don’t have the right culture in place to support and drive that strategy, they will fall at the first hurdle.
“Executive buy-in is fundamental to the successful delivery of an effective ESG strategy, so it’s critical to explain to stakeholders which parts of the strategy are directly relevant to them, and the responsibility and accountability they’re required to take,” said Griffin Pain. “It’s also important to talk to them about the financial and reputational risks from not progressing an ESG strategy, from customers and skilled talent choosing companies which align better with their ESG goals, to disengaged employees and a negative impact on reputation.”
Developing a strategy
David Picton, SVP of ESG and sustainability at EcoOnline, advises taking a three-step approach to devising an ESG strategy. These are: prioritising the issues that will most materially impact the business, striking a balance in terms of aims and targets across ESG’s three pillars, and articulating the benefits of investing in those key areas.
“Companies can’t cover everything, so they need to prioritise the issues that have the most significant impacts to them and their key stakeholders,” said Picton. “That process is known as double materiality assessment, and it helps companies explore and understand which factors have the most impact on them and which factors they have the most impact on.”
Cherie Howlett, CMO, Jola, said, “Looking at key metrics can be helpful when developing an ESG strategy, to understand a starting point, what success looks like and how to get there. Carbon emissions, energy consumption, waste production and water usage can serve as valuable metrics, alongside employee satisfaction, community involvement and regulatory compliance. Having the right KPIs, motivations and measurements is key to success.”
There are also a host of ever-evolving legislative and regulatory standards that channel partners have to adhere to when shaping a strategy. Therefore, it’s vital that they stay ahead of any key changes and requirements.
“Even if they are not directly impacted – in terms of reporting requirements, for example – they may be indirectly affected as participants in a supply chain ecosystem, in which larger companies require them to support them with reporting as part of the wider value chain,” said Griffin Pain of Colt Technology Services. “Additionally, new standards and regulations will begin to make it common practice for customers and partners to discuss and potentially request ESG information.”
To ensure best practice and full transparency, companies should establish key targets and share their progress with reputable third parties.
For example, Colt Technology Services has submitted and had approval of its Science Based Targets [which help companies define a clear path to reduce their greenhouse gas emissions], and it has also submitted its carbon emission and other relevant data to the Carbon Disclosure Project (CDP) and EcoVadis for benchmarking, enabling it to be independently audited and to gain a deeper understanding of how it’s performing compared to other global businesses across all industries.
Another credible standard is the Greenhouse Gas (GHG) Protocol, which provides a comprehensive framework that channel partners can use to understand and manage their carbon footprint, assess emissions and, crucially, consistently report on them.
The GHG Protocol allows businesses across the supply chain to align on emission measurement, identify shared reduction opportunities and collaborate effectively towards sustainability goals. That way, they can track emissions transparently, share best practices and devise a unified strategy to reduce carbon footprints throughout the value chain.
Other internationally recognised standards that provide clear guidance on ESG performance include the Global Reporting Initiative, the Sustainability Accounting Standards Board, the Task Force on Climate-Related Financial Disclosures and the United Nations Sustainable Development Goals. Partnering with reputable organisations is key too.
For example, Evolve IP collaborates with the Climate Partner organisation, whose robust framework both drives ESG initiatives and enables the company to accurately assess its progress.
Third-party standards
Companies aren’t the only ones that need to conform with these ESG standards – they must also ensure their third-party suppliers are meeting them too.
That’s not simply because it’s ethically and morally the right thing to do, but because, by prioritising ESG, it fosters greater trust with stakeholders, drives more operational efficiencies, is more likely to have a positive social impact and is proven to be more innovative.
Ultimately, deeper engagement with suppliers provides an opportunity to educate them about the business and learn more about theirs, as well as the chance to establish and develop lasting relationships.
But first, companies need to thoroughly evaluate their suppliers’ policies and certifications. To achieve this, they must actively seek out partners with a shared long-term commitment to sustainability by carrying out rigorous due diligence, looking at their accreditations and credentials, and conducting regular audits and performance reviews to ensure ongoing compliance and commitment.
Among the most basic standards that third-parties should adhere to are: reporting their annual carbon footprint and setting credible goals to reduce emissions, such as Science Based Targets. If they sell devices, they should also establish specific targets to improve energy efficiency.
“Building a sustainable supplier ecosystem is key and it’s important to incorporate sustainability and environmental topics as integral parts of your discussions with suppliers – particularly during quarterly business reviews and contract renewal negotiations,” said Griffin Pain.
She added, “At Colt, we’re focused on creating a sustainable supplier network and we prioritise vendors who demonstrate a genuine commitment to supporting our environmental, social and governance ambitions. This ensures alignment with our overarching sustainability objectives.
“We’ve engaged suppliers through a focused sustainability questionnaire, aimed at comprehensively assessing supplier carbon emissions, adherence to Science Based Targets, and their strategies for carbon reduction. Eighty nine per cent of suppliers have signed our supplier code of business conduct and we’ve engaged 73 per cent of our suppliers on ESG topics. We’re really proud that this progress has led to the CDP awarding us an ‘A’ rating for supplier engagement in 2024.”
Deborah Johnson, head of ESG at Agilitas, said, “When selecting a third-party supplier that aligns with your environmental, social and governance standards, transparency is key. Companies should engage in open, honest conversations about their sustainability journey, including the challenges they’ve faced.
“It’s important to question each other respectfully on how data is collected, what’s included and any obstacles in tracking progress. Understanding Scope 3 emissions [indirect greenhouse gas emissions that occur outside of a company’s direct control but are still part of its value chain] depend heavily on supply chain collaboration is critical to ensuring everyone is on the same page and working toward common ESG goals.
“Trying to hide issues or inflate data can lead to greenwashing, undermining trust and progress. If a supplier has used estimations in their carbon footprint calculations, they should openly acknowledge this, rather than trying to present perfect data.
“Perfection shouldn’t hinder progress – it’s about continual improvement and a shared commitment to transparency. Only through collaboration and honesty can companies create a sustainable, trustworthy supply chain that genuinely contributes to ESG goals.”
At PXC, 85 per cent of its suppliers by spend had last year set Science Based Targets or other credible carbon reduction goals. It helped them to achieve this by engaging proactively with them, and offering support and guidance as they set their targets.
Stakeholder consideration
But, ultimately, an ESG strategy will only be successful if a business properly integrates it. To do so, all key stakeholders must be considered.
“At PXC, we think about our key partners in the Channel, what their concerns are and what questions they may have regarding our strategy,” said Will Ennett, head of sustainability and ESG, PXC. “We also think about what our investors would want, as well as our employees. Only by considering all the individuals you want to influence will you be able to design a strategy that’s both comprehensive and effective.
“When it comes to implementing our ESG strategy, we make sure that it’s visible to all our employees on a regular basis. We do this by adding an ESG message onto our company scorecard, which we discuss at monthly company updates to showcase what we’re doing in each area and how we’re performing against our goals. We also embed sustainability gates into our change management framework and add sustainability questions into our procurement process to ensure we’re doing all we can.”
To achieve a successful strategy, everyone needs to be on the same page. That requires embedding it within the company culture, enabling all employees to contribute to enterprise-wide initiatives and unite through a shared purpose.
“Employees who feel that their work contributes to meaningful environmental and social goals are more engaged, motivated and connected to the organisation,” said Johnson of Agilitas. “This alignment fosters collaboration and ensures sustainability becomes a natural part of everyday decisions and processes.”
Jamie Hughes, UK sales director, Evolve IP, said, “A robust ESG strategy requires that all parties including internal teams, vendors and supply chain partners share the same vision and commitment. Without collective buy-in, efforts can become disjointed and less effective.”
Full alignment
At the end of the day, it’s critical for channel partners to fully align themselves with staff and customer expectations. That requires explaining what they’re doing, why it matters, who’s accountable for what deliverables and when they’re going to report back.
As customers and employees are two markedly different stakeholders, PXC’s Ennett said that partners should develop a separate strategy for each. For customers, he said that it’s all about the numbers, while employees care most about real-term changes. Younger generations of staff, in particular, want to work for an organisation that has a clear social responsibility and takes action on the issues that matter most to them.
“Employees want to see you making tangible changes which improve their experience and are sustainable,” said Ennett. “As an example, PXC has voluntary employee resource groups, including PXC Planet for people passionate about preserving the environment, Empower Group to spearhead diversity and inclusion initiatives, Talkpride to support LGBTQ+ employees and more, which all aim to address areas of imbalance across the company to be able to make positive changes in those areas.
“Customers, on the other hand, care about data – are your numbers credible and reducing? When it comes to our operations, our data is assured, which means we can prove to customers that we have halved our carbon footprint this decade.”
Evolve IP’s Hughes said, “To align with employee and customer expectations, companies should embed sustainability into every facet of their operations. This means not only investing in green initiatives, such as installing EV chargers, solar panels and developing flexible workspace hubs to reduce commuting but also communicating these efforts transparently.
“By making sustainability a core business value, organisations inspire employees and customers alike. Leading by example positions the company as an industry evangelist, encouraging partners and the broader community to embrace similar practices.
“Ultimately, it’s about creating an innovative, environmentally responsible culture that resonates deeply with stakeholders and drives collective progress toward a greener future.”
From the vendor’s perspective, robust ESG credentials also have a major influence in buying decisions. That’s evidenced by a Colt Technology Services’ survey of buyers, 62 per cent of who said they would call out network providers and suggest they review their goals if that company’s ESG values didn’t align with their own. A further 16 per cent said they would take a stronger stance and leave that provider altogether.
In order to be fully transparent, Agilitas has developed an intuitive digital dashboard that enables channel partners and their customers to easily understand, track and reduce their carbon emissions with clear, actionable insights. The more of such support that’s provided, the more effective all parties’ ESG strategies will be in the long run.
Future risks
Moving forward, there are a plethora of ESG risks that companies will have to meet. Chief among them are: climate change, concerns around greenwashing, maintaining a sustainable supply chain, human rights and issues caused by digital exclusion.
Another issue for companies executing on their ESG strategies is the lack of available data on sustainability performance. As they struggle to gather enough accurate and comprehensive data to effectively measure their impact, it’s hindering their ability to track progress and make informed decisions on their sustainability goals, particularly as ESG gains more visibility and those that fail to act responsibly are perceived to be greenwashing.
“Emerging ESG risks stem from mounting commercial pressures that can undermine sustainability efforts amid tighter budgets,” said Hughes. “Additionally, new regulatory frameworks such as the 2027 device passport scheme tracking products from manufacture to end-use will heighten compliance requirements.
“While these initiatives enhance ESG focus, overly complex rules risk deterring participation. Companies must embed ESG into their core strategies and streamline compliance processes to sustain commitment without creating bureaucratic obstacles.”
PXC’s Ennett said, “For companies supplying to the public sector, having good calculations on social value and understanding your carbon footprint are a must. The weighting on social and environmental factors is increasing and could cost your business if you don’t act soon.
“In the long-term, there are likely to be changes to regulatory reporting and accounting standards which will impact how environmental risk is assessed and how businesses can calculate their impact.”
Jola’s Howlett added, “Building a successful team that can deliver growth is crucial for any company in the Channel. Finding, training and retaining the right people who can understand and exceed your partners’ expectations is challenging, but, when achieved, it becomes difficult to replicate.
“Loyalty is fostered by creating an engaging and financially rewarding environment for learning and acquiring key skills that are invaluable to our partners.”
This feature was included in our April 2025 print issue. You can read the magazine in full here.