Pipeline preview: sustainability will affect your clients’ supply chains, finances

IT providers that haven’t considered the importance of sustainability to their customers will find this month’s CRN Pipeline conference keynote talk by Michael Salvatico eye-opening.

Salvatico works with businesses and regulators to advise on responsible investment trends and the identification of ESG issues in his role as Head of Asia, Pacific, Middle East & Africa ESG Solutions at S&P Global Sustainable1.

He says sustainability as a business priority impacts how companies operate, their strategic objectives and how they manage risks.

CRN spoke to Salvatico ahead of his keynote talk and participation in a panel discussion at the CRN Pipeline conference later this August.

One of the examples of the business impact of sustainability objectives Salvatico pointed to is across supply chains, where there is an increasing focus on the sustainability of a company’s suppliers.

“If I'm a company and I set a net zero target, I'm going to have stakeholders asking me about my scope one emissions, emissions that I produced myself, scope two emissions, emissions that I’m buying and scope three emissions, emissions that come into my organisation from my supply chain, and down through the value chain,” said Salvatico.

“So that means that, as well as all those things when I'm looking at suppliers which are important to me, another factor to consider is the carbon intensity of the products that I'm buying from that company, because that's going to contribute to my carbon footprint and to how clients are assessing me. So, there's a direct link, if you like, between metrics that companies in the supply chain are producing that come down through to the organisation.”

Access to capital

When it comes to accessing finance, Salvatico highlights the shift that has occurred in the financial industry, where sustainability is now assessed when it comes to both equity and debt.

“We’re in a pivotal point in time for the world of finance, where the finance industry has recognised the importance of sustainability, and assessing sustainability of the organisations that they're financing,” he said.

Salvatico said banks are likely to assess a company’s risk through the lens of climate resilience, such as an organisation’s exposure to physical risks such as wild fires or floods, or what the impact of a carbon price would be on the company’s operations.

“Companies being assessed through this lens that have a lower risk may benefit from a reduced rate of borrowing.”

Performance

As businesses seek to provide a return for shareholders and improve the bottom line, consumers and investors are putting increasing pressure on businesses to be good corporate citizens.

“The expectation on companies and their behaviour is that they behave in a way that's responsible,” said Salvatico.

“There's evidence to demonstrate that being a good corporate citizen, helps improve the long-term sustainable profitability of a company.”

From the perspectives of talent attraction and retention, producing good quality products, and increasing trust in the community, sustainability can provide a competitive advantage he said.

He told CRN, “If you're a company that cares about your employees, and cares about the quality of the product you're producing, you're attracting the right talent, you're creating a product that is going to be used, be valued, it's going to have a competitive advantage. If you're selecting suppliers, through a lens of sustainability as well, you're probably selecting better suppliers, suppliers who also have greater focus on retaining talent, attracting talent, reducing injuries, and producing good products.”

Join Michael Salvatico and business leaders to unpack the future of the Australian IT channel at this year's CRN’s Pipeline conference from 23 to 26 August on the Gold Coast. Register your interest in attending the conference.