Why end-users are demanding sustainability from channel partners

By Karlton Gray, Channel Director, Schneider Electric, UK & Ireland.

Sustainability has become a key pillar within the IT channel, and evermore crucial to customer decision-making. With growing awareness of the impact of climate change, perspectives have changed in recent years, and the potential environmental effects of tech purchasing decisions are now just as important to customers as traditional pricing considerations once were.

Looking forward, what this means it that sustainability is now of utmost importance to the channel community, and when defining what the modern channel partner should look like, channel analyst Canalys recently stated that as a partner, “Sustainability needs to run through every offering and every service you do. Being able to position sustainability as a part of your IT-as-a service offers is going to be key to your resale success.”

What’s driving sustainability in the channel?

Interestingly Canalys confirmed that the environmental accountability of IT investments is going to be one of partners’ customers’ top priorities within the next two-to-three years. It will also be one of the most important drivers of IT-as-a service, with customers wanting to ensure the accountability, and the visibility into their IT investments.

The good news is that the channel is already embracing sustainability. Research published in 2020 by IDC’s dedicated practice, European Technology for Sustainability and Social Impact, examined how important sustainability is to IT decision makers when selecting suppliers or services partners. In a study of 700 organisations across Europe, IDC discovered that that six out of 10 European businesses cited sustainability as either a ‘very’ or ‘extremely important’ business priority.

Technology, and with it, increased electrification and digitisation, remains a primary vehicle for achieving sustainability KPIs. More than half of European companies have stated that they are investing in technologies to improve sustainability performance. For the channel, this means that sustainability is becoming a primary competitive differentiator, and 41% of companies are already seeking assistance from their IT services partners to incorporate sustainability targets into the products, services, and solutions they deliver. 

Further, 60% see them as playing a crucial role in helping them achieve their sustainability goals, and more critically, close to 60% of organisations in Europe are including sustainability objectives into RFPs. In fact, a Schneider Electric and 451 Research report found that 97% of customers are asking for contractual sustainability commitments within the data centre space, and in 2020, HP won more than $1 billion in new sales where sustainability criteria were a known consideration in the deal. What’s clear to see is that sustainability has become a key selling point for partners. 

How can partners become more sustainable?

With sustainability becoming commonplace in the channel, at Schneider Electric, we believe that we’ll continue see greater uptake of Green Premium technologies. These are circular solutions which include environmental product disclosures such as RoHS and REACh compliance details, and those which can help end-users understand their embodied carbon footprint.  Moreover, with greater volumes of IT and critical infrastructure supporting the demand for accelerated digital transformation, partners are broadening their digital services portfolios within the fields of sustainability, and IT energy management. 

For resellers, this means new digital service models based on managing distributed IT, providing mission-critical maintenance support and energy management services are beginning to emerge as a means of addressing sustainability initiatives within digital transformation RFP’s. Additionally, new consultancy organisations or services that can help customers modernise, upgrade, or retrofit out-dated infrastructure, and those that can drive energy efficiency for a lower carbon footprint (or energy bill), are becoming a key focal point with end-users. 

Here partners with specialist expertise in energy efficiency, UPS and power management, and edge computing will likely see success, but integral to this is that the vendors with whom they work are focussed on the same sustainability ambitions. 

Decarbonising the supply chain

In recent years Schneider Electric has announced a number of Net Zero commitments, which will see us increase support for both customers and partners and empower them to achieve their own sustainability objectives. For example, between 2021-2025, we aim to reduce CO2 emissions from our top 1000 suppliers, while delivering 800 million tons of saved and avoided carbon emissions for customers. This is a strategy which requires not only a greater focus on embedding sustainable practices across our partner supply chain, but in helping customers to create and meet long-term objectives that will ingrain sustainability. 

Further, we have launched The Zero Carbon Project, an initiative to halve the carbon emissions of our top supply chain partners by 2025, and a call to action already joined by 91% of them. For end-users hoping to address scope 1,2 and 3 emissions, decarbonisation within their supply chains and supplier ecosystems is essential and means channel partners have critical role to play. This can be seen in both the manufacturer technologies they choose to specify and via their own corporate sustainability commitments. 

Finally, from a technological perspective transparency is key, and earlier this year we were also awarded the CRN Tech Impact Award for Sustainable Infrastructure Vendor of the year, which recognises our companies leadership in developing sustainable and energy efficient digital transformation technologies, and our proven track record in helping partners deliver solutions that address the issues of sustainability and the circular economy.

Becoming a trusted advisor on sustainability

Many channel firms already seem to be on the right path, and research by Agilitas IT Solutions has revealed that 84% of UK IT channel leaders are optimistic about adopting more eco-friendly processes throughout their supply chains now and in the future.

In fact, the report revealed that sustainability is now directly linked to building resilience amongst IT channel leaders, and when asked to identify which areas of their organisation they are implementing change, 45% of respondents stated they had already begun driving their sustainability and circular economy efforts, with a further 40% committed to introducing them in the future.

Interestingly, research from Canalys has also highlighted how only 23% of partners have developed solutions to help customers manage energy consumption, meaning there remains a significant opportunity for channel businesses to help customers manage their mission-critical IT applications more closely in a bid to reduce their environmental impact. 

What’s also critical, however, is that the business conversation surrounding sustainability changes, and that partners can continue to help their customers define and measure a tangible return on investment. Whether that’s through lowering their operating costs, reducing their carbon footprint, or indeed minimising their energy consumption, having the right partner ecosystem will be critical to reach their sustainability goals.