Sustainability in 2022

Despite a series of disruptive challenges, such as a global energy crisis and rising inflation, sustainability remained a key point of discussion in 2022. Businesses in the IT industry continued to feel the pressure from customers and governments to reduce their environmental impacts. In response, most channel partners and vendors have taken steps toward achieving their sustainability goals – and doing so has often helped them weather tough macroeconomic conditions.

In 2022, the IT sector has largely moved beyond the challenges of the pandemic era – but this year has hardly been straightforward for the channel. The likes of the energy crisis, Russia’s invasion of Ukraine and ongoing supply chain issues have caused extensive disruption for IT businesses. But for many partners and vendors, these events have not derailed their focus on tackling the climate crisis. Over the past 12 months, sustainability has continued to be a priority throughout the industry, with partners and vendors adjusting their business strategies to meet carbon and e-waste reduction targets.

At the end of an eventful year for sustainability in the channel, Canalys reflects on some notable developments that happened in 2022.

ESG regulations continued to emerge, especially in Europe

As the climate crisis remains a major concern for customers, they expect their partners and vendors to facilitate their carbon reduction strategies. But the growing expectation for sustainability in products and practices is no longer the only pressure driving partners and vendors to reduce their environmental footprints, as governments continue to propose and enforce mandatory ESG laws.

Regulatory pressures have ramped up considerably in 2022. Many countries have enforced new ESG legislation this year, such as the UK, which introduced its first Taskforce on Climate-related Financial Disclosures (TCFD) law in April, legally requiring large companies to report on their climate-related risks and opportunities. In addition to this, the French government enacted its Law against Waste for a Circular Economy, encouraging device repair and reuse while limiting the prevalence of single-use plastic packaging.

Besides recent regulations introduced on a national level, the European Union enacted further ESG laws throughout its member states. With the recently green-lit Corporate Sustainability Reporting Directive (CSRD) and the proposed framework to require Digital Product Passports detailing products’ environmental impacts, the EU continues to add regulatory pressures to businesses in the IT sector. Consequently, it is increasingly becoming a requirement for companies to operate sustainably – not just a competitive advantage or ethical consideration.

Supporting the circular economy was a priority

The IT industry continues to have a major e-waste problem, often perpetuated by short device lifespans, difficult-to-repair products and businesses’ tendency to shred used hardware over data privacy concerns. But as IT companies set e-waste reduction targets while customers demand more devices, the circular model has grown in popularity throughout 2022.

By using recycling services offered by vendors and IT asset disposition (ITAD) specialists, channel partners are focusing on tackling their e-waste problems. Vendors continued to expand their takeback programs in 2022 with initiatives such as Cisco’s Environmental Sustainability Specialization and HP Planet Partners. Globally, vendor-certified ITAD solutions are becoming increasingly accessible to partners and their customers.

But sustainability has not been the only factor driving interest in refurbished IT equipment this year. As inflation continues to force organizations to reduce their IT spending, the channel is recognizing how refurbished hardware can be cheaper yet just as viable as new devices. Furthermore, as pandemic-induced supply chain issues persist, lead times remain long for new equipment. This has driven sales of refurbished hardware, which is more readily available than brand-new devices.

With demand for recycling and refurbishment services growing, acquisitions of ITAD companies have been commonplace in 2022. Egiss buying Refurb made headlines this year, while Evernex’s purchase of American ITAD firm XSi and Iron Mountain’s acquisition of ITRenew were also notable deals.

Energy crises put efficiency in the spotlight

The global energy crisis has been a defining aspect of 2022, with very real impacts on businesses and their operations. The issues of rising energy costs and inflation have coincided, making energy efficiency a priority for organizations looking to weather this perfect storm. Naturally, channel partners have been especially interested in energy efficient products and processes – primarily from a cost-cutting perspective, rather than a sustainability one. While this recent shift toward energy-saving products is encouraging, businesses should not view this as a short-term measure during times of crisis – and they should embrace the circular economy when replacing their older, less efficient hardware.

In tandem with rising prices, energy security has been a significant issue in 2022. Following the beginning of the Russia-Ukraine war, the availability of non-renewable energy from Russia in particular has been majorly affected. As a result, oil and natural gas prices have risen considerably across Europe, and in an already challenging macroeconomic climate, IT organizations have felt increasing pressure to diversify their energy mix.

To secure reliable access to energy, the IT industry has accelerated its transition toward renewable sources of energy. But despite widespread demand due to the sudden geopolitical conflict, the current capacity for renewable energy in Europe is not sufficient for the IT sector at large to end its reliance on imported fossil fuels. Moreover, Africa is also undergoing a transition to renewables amid energy security issues. With its existing energy infrastructure failing, the continent is gradually moving toward clean energy sources, such as solar and wind, to have consistent energy access and minimal reliance on global exports.

Although achieving sustainability goals was a priority for many partners in EMEA this year, other motivations have contributed to the channel’s shift toward more green operations. With mounting regulatory pressures and supply issues forcing the IT industry to embrace clean energy, circular models and transparency on ESG performance, sustainability can no longer be an afterthought. The channel partners taking a proactive approach to sustainability are clearly better prepared for the macroeconomic and geopolitical challenges of today and tomorrow than the businesses that respond reactively.