ESG in the Global IT Sector

IT's environmental footprint has always run in two directions at once. Migrating workloads to hyperscale cloud can cut associated emissions by up to 96%, and IT platforms underpin emissions tracking and energy efficiency gains across every other sector. At the same time, the compute required to deliver that value is accelerating: data centre electricity use rose 12% a year through 2024, and AI reasoning models can require up to 100 times more energy per query than simpler ones.

Manufacturing compounds the picture on the hardware side. Producing a server accounts for 75-80% of its lifetime emissions, far more than running it, and global e-waste reached 62 million tonnes in 2022, of which only 22.3% is formally recycled. Regulation has caught up with all of this simultaneously: the EU CSRD, India's BRSR Core, and the US SEC's climate rule are each moving IT companies from narrative disclosure toward audited, quantitative reporting, while the EU AI Act adds board-level obligations for AI risk governance on top of environmental ones. The compliance burden and the emissions problem are converging on the same set of companies at the same time.

IT's decarbonisation paradox will not resolve through better efficiency alone. The sector has spent a decade optimising the roughly 10% of emissions it controls directly, while the 90% that sits in its value chain, and increasingly in the energy AI consumes at scale, has outpaced every operational gain made against it.

The companies that separate genuine progress from efficient-looking operations will be the ones still standing when audited Scope 3 data becomes as routine as a financial filing.