Organisations value ESG as highly as security and cloud migration projects

86% of businesses report that environmental, social and governance (ESG) and sustainability is important to their organisation when deciding which cloud vendor to work with, with almost half (44%) considering it extremely important. This second figure is up from 30% in 2023, indicating that despite media reports of ESG being put on the backburner by many companies, they remain committed to continued sustainability efforts. This is according to research conducted by the Cloud Industry Forum.

The data from this year’s report indicates that organisations value ESG highly, with 40% of respondents reporting that IT sustainability is an important project for their organisation. This ranks equally with other areas of business such as security and cloud migration, and is second only to artificial intelligence (42%).

Despite this, when deciding on whether or not to work with a cloud service provider, cost is still king, being the most important priority for 45% of respondents. Next, 41% referenced the availability of services and 39% mentioned partnering with a trustworthy company as being key factors, all ranking more highly than sustainability credentials (28%). However, the research also found that 49% of organisations said they would always reject a prospective vendor if they gave a poor response on their ESG and sustainability strategy.

This continued emphasis on sustainability is supported by the finding that 79% of organisations are now measuring the carbon footprint of their existing data storage infrastructure in the cloud. According to the data, 47% of organisations have already been measuring this for more than 12 months, and just 7% indicated that they do not have any plans to measure this in the future.

Further, organisations are taking crucial steps to reach net zero despite economic constraints, with 87% of organisations planning to reach net zero by at least 2050. More than a quarter (26%) of respondents plan to achieve the milestone before 2030.

On the whole, businesses are largely positive about their sustainability credentials, and this is growing year on year. 31% of respondents now believe the sustainability of their organisation’s IT emissions is ‘established and mature’, a figure that has increased from 16% in 2023.

David Terrar, CEO of the Cloud Industry Forum, said: “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.

“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.

“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.

“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.”