Cloud Industry Forum: ESG a criterion for partner selection

Previous economic downturns have led the channel to focus on the essentials to get through to more prosperous times, with environmental, social and governance (ESG) priorities often being paused in the pursuit of survival.

But the recent challenging times have not produced the same effect, with the channel remaining under pressure to show commitment to sustainability and diversity.

Research from the Cloud Industry Forum (CIF) has indicated that ESG is valued as much as security and cloud migration projects and is one of the metrics used by customers when it comes to selecting a cloud provider.

The industry group found a significant number of customers (86%) viewed ESG as one of the key criteria in selecting who they would choose as a partner. 

CIF found that an increasing number (almost half) view an ESG commitment as “extremely important”, which is up from the level holding that view in 2023. If a channel partner was pitching a vendor that had a poor response around its ESG strategy, then 49% of customers would always reject that option.

Cost is still the main criteria used by customers when choosing a cloud partner, but the importance of ESG is a factor that demands growing attention.

“Despite recent media reports suggesting that organisations are watering down ESG commitments amid a difficult economic climate, this year’s data shows that the focus on sustainability continues to grow,” said David Terrar, CEO of the Cloud Industry Forum.

“Cost undoubtedly – and understandably – remains a key factor for all businesses, but it doesn’t come at the expense of sustainability. Businesses are continuing to invest time, effort and funds into ESG initiatives and are set to continue to do so,” he added.

CIF found that an increasing number of customers are measuring the carbon footprint of their data storage infrastructure in the cloud, with many taking steps to reduce emissions and get to a net-zero position. The majority are aiming to get to net zero by 2050, but a quarter are on a more ambitious timetable, aiming to get there by 2030.

“It’s also positive to see that businesses are taking steps to measure the carbon footprint of their storage infrastructure. The recent AI boom has been met with some opposition due to the energy intensiveness of popular tools such as large language models, so it’s important that businesses are taking steps to measure and combat this as the use of these tools grows,” said Terrar,.

“Cloud service providers should take note that a large proportion of businesses are prepared to reject partnerships on the basis of sustainability alone, and should ensure they are setting themselves high standards in this area. Those companies able to demonstrate clear consideration of sustainability issues will stand ahead of those relying on the prospect of cost savings alone,” he advised.

The channel has been proactively improving its sustainability position, with customer experience specialist Sabio Group the latest to announce its intention to get to a zero-carbon emission status by 2050.