Sustainable technology: today’s news but not tomorrow's fish and chip paper

Whilst technology has transformed the way we live, helping us do things faster and more affordably, this often comes at an environmental cost which, with new technologies such as AI and quantum computing, is increasing. Sustainable technology is vital in addressing this issue.

The term sustainable technology encompasses both the consideration of sustainability in the design and life cycle of technology products and the use of technology to reduce a company’s environmental impact.

With the effects of climate change ever more apparent, it is crucial that organisations prioritise the development and integration of sustainable technology into their businesses.

A company’s sustainability credentials are an increasingly influential factor in its reputation. In addition to sustainability being pushed by directors who are concerned about climate change, companies that have good sustainability credentials are likely to be more attractive to investors, customers and employees.

Voluntary initiatives such as TechZero, a climate action group for technology companies and a partner of the UN’s Race to Zero, show that there is a willingness for companies to prioritise sustainability.

The use of sustainable technologies, in conjunction with other steps to reduce emissions, is therefore an important part of a company’s values and the effect that has on attracting investment, business and talent.

Legislation also plays a role in ensuring that companies consider their environmental impact. This legislation can broadly be divided into three main approaches:-

Accountability: most of the current net zero legislation is focused on disclosure and reporting requirements. In the UK, PLCs and large private companies are legally obliged to disclose material climate change related risks and opportunities and to report how these are being addressed. On 15 March this year, the European Union Council voted to adopt the Corporate Sustainability Due Diligence Directive. This directive will require large EU companies and foreign companies generating significant revenues in the EU to comply with new sustainability due diligence obligations.

Directors’ duties: building on directors’ duties is another way in which governments have strengthened corporate governance in respect of climate change. In the UK, directors have a duty under the Companies Act 2006 to have regard to the impact of the company’s operations on the community and the environment when acting in good faith to promote the success of the company.

This duty is openly drafted and, with the escalation of the climate crisis and the financial impacts of climate risks becoming more apparent, its interpretation is likely to broaden. If a director breaches this duty, shareholders can bring a claim against the company. The risk of litigation (even if a claim is not successful) presents reputational risks for both directors and the company.

Net zero obligations: most countries have not gone as far as to introduce any direct legal requirement for companies to become net zero. A notable exception to this is Switzerland, which last year implemented a new law requiring companies to become net zero by 2050.

There is recognition from governments and international bodies of the role that companies have to play in achieving the transition to net zero. Many, including the UN Climate Champions, now argue that the introduction of net zero regulations must exponentially accelerate in order to meet net zero goals. With this in mind, it will be interesting to see if any countries follow Switzerland’s lead.

The existence of these legal requirements gives companies another reason to incorporate sustainable technology into their businesses as part of their obligation to consider their environmental impact.

Sustainable technology is critical to reducing carbon footprint and creating a healthy business long-term. The various pressures from governments, investors, clients and employees are bringing businesses’ environmental credentials under greater scrutiny and this is only going to increase.

Using sustainable technology to minimise a company’s environmental impact now will set it in good stead for the future.

Sustainable technology is tomorrow’s news today. We need to ensure that it is here to stay. Let some other news be used to wrap our fish and chips.

• For more, contact georgina-perrott@birketts.co.uk