ESG initiatives seen as growth and leadership drivers

According to research from Node4, UK mid-market organisations are embracing ESG policies specifically to improve customer loyalty and gain a competitive advantage. They also believe implementing ESG initiatives can drive innovation, deliver growth and generate cost savings. Notably, the research data indicates that less than 1% of mid-market organisations have yet to adopt an ESG strategy—making it practically the norm across this sector of the UK’s economy.

Findings from Node4’s latest Mid-Market IT Priorities Report suggest IT decision-makers have a favourable view of ESG initiatives, describing them as helpful (28%) and useful (22%). That’s compared to 16% who said ESG policies are unhelpful and 18% who said they are irrelevant. In addition, over a quarter of respondents said that their digital transformation efforts are now motivated by improving environmental and social impact—that rises to 31% of CTOs and 35% of IT Managers.

Close to a quarter of respondents see aligning IT strategy with wider corporate ESG goals as one of their most important aims for the remainder of this year. This means it outranks objectives such as getting to grips with AI, managing costs and hiring/developing new in-house skills. Only business growth, improving customer experience, and increasing hybrid cloud development were viewed as more important. It’s a similar story for compliance, with ESG-related compliance objectives receiving higher priority than GDPR, BYOD, AI, and data governance.

Node4’s research also reveals that more than one in five respondents are concerned that AI use within their organisation could lead to potential bias and discrimination risks—making it a topic that warrants further exploration as mid-market organisations take their first AI deployment steps. Insurance (28%) and transport (25%) companies are most concerned about this issue compared to other vertical sectors examined in the report.

Mid-market IT decision-makers also hold ESG principles in high regard when seeking new IT solutions. Alongside analyst reports, they consider ESG reports to be the most important source of information for selecting potential IT suppliers. Almost a quarter are likely to use published ESG reports in their selection processes, highlighting the growing importance of ESG in the decision-making landscape.

Kate Lincoln, Head of Group Governance at Node4, comments, “Over the last 12 months, many clients have told us they must demonstrate ESG compliance within tenders or contract bids. While it’s true that there are costs involved in embedding ESG into the business, the return on investment is clear. ESG is ultimately seen as a means to improve—and often a prerequisite for—revenue generation and business growth. This experience in the field, alongside data from our respondents, suggests that IT decision-makers and the organisations they work for see ESG as an integral part of long-term success and profitability. In that context, it’s understandable to see ESG emerging as one of the main drivers for digital transformation.”