News
2 March 2010
Innovation will be the measure of future sustainability performance, says the Tomorrow's value rating
The future sustainability performance of the information and communication technology (ICT) industry is likely to be measured by its ability to identify commercial solutions that meet the need for climate change adaptation. Yet according to new research from the Tomorrow’s Value Rating, the track record of companies to address sustainability challenges through innovation varies enormously. Leaders such as Vodafone, Nokia, HP and France Telecom can point to promising product and service developments, but many others show little progress at all in this direction.
The Tomorrow’s Value Rating has studied the twenty largest listed companies in the industry (based on the Fortune Global 500). Researched and produced by Two Tomorrows, the leading sustainability consultancy, the Tomorrow’s Value Rating uses publicly available information to assess companies on how well they manage their most pressing social and environmental issues.
Vodafone is placed first in the Tomorrow’s Value Rating of the ICT and Telecoms sector with an overall score of 60%, reflecting its strong, all-round sustainability leadership.
Thomas Krick, global manager of the Tomorrow’s Value programme, comments: “Vodafone has implemented comprehensive governance mechanisms for sustainability issues; it listens and responds to stakeholders both locally and globally, and has a strong track record of developing services that help improve the lives of disadvantaged people and remote communities.
”The company is best positioned to turn some of the world’s most pressing social challenges into commercial opportunities, thereby combining positive impacts with the generation of shareholder value.”
Vodafone is followed closely by Nokia and HP, with Sony, AT&T and Verizon trailing at the foot of the table.
Thomas continues, “These results reflect a broader trend of ICT companies showing sustainability leadership. They are increasingly recognising the commercial opportunity that lies in helping other sectors to reduce their carbon footprint, or in using their technology to offer health or education services to remote communities. Companies in the sector are also working together, especially in trying to address social and environmental challenges in their supply chains, and in regards to electronic waste management.”
Jason Perks, Group Director at Two Tomorrows, adds: “While the sector continues to push best practice in sustainability innovation, the management of its direct environmental impacts often offers room for improvement. For example, while most companies have set CO2 emissions targets, the majority struggle to achieve significant reductions.”
An exception to this rule is Panasonic, which leads the way in terms of carbon performance by reporting an absolute reduction in its carbon emissions, as well as reductions in GHG emissions within all life-cycle states of its products, and across its product portfolio. Where other companies achieve reductions, these are usually relative to production units and emissions therefore still grow as the company grows. LG Electronics and Vodafone are two of the few companies who have committed to absolute reductions by 2020.
In parallel to the global ICT rating, Two Tomorrows also rated the largest companies in the Silicon Valley. In acorporate roundtable to discuss the results, companies themselves acknowledged areas for improvement, especially in regards to environmental management systems and processes. This aligns with the Global ratings results, which confirms that the European companies have the more sophisticated sustainability management approaches.
Other key issues to emerge from this Tomorrow’s Value Rating include:
- Nokia leads the way in innovation, with its recycled materials initiative “Re-made on Earth from Nothing New,” and its “Nokia Life Tools” programme.
- HP leads the sector’s considerable efforts towards more sustainable supply chains. Management of 1st tier suppliers has almost become a standard practice across the ICT sector, with many of the largest companies implementing supplier code of conducts, and undertaking compliance audits.
- European ICT companies clearly lead the industry. There are only 2 Asian companies amongst the better scoring half of the benchmarked companies, and one US company (HP)
- The need for responsible management of electronic waste is commonly acknowledged, but still mostly compliance driven. Electronic waste in developing countries is still a major challenge, and many companies fail to give this issue the necesssary attention.
- Vodafone, Ericcson and LG Electronics show the sector’s best engagement practices. While several companies generally acknowledge stakeholders and some legitimacy to their concerns, only these leaders commonly specify responses to each of them. Vodafone sets itself apart because of a comprehensive approach that is as inclusive of global NGOs as it is of local communities in developing countries.
- Most ICT companies have good sustainability governance arrangements in place.
- Mobile health initiatives offer a significant opportunity for positive impact. Following the success of its mobile payment services first launched in rural Kenya, Vodafone appears to be taking a lead in this area, too. Its new m-health business has just become the second business unit born out of the sustainability department.
Two Tomorrows
Visit the Tomorrow’s Value Rating site
