How to Prepare for New ESG Regulations – Adam Moloney, Blancco Technology Group

This is texturing TV. I'm Bonnie Schneider of tech strong TV, as more companies are required to measure and publish their carbon emissions. My next guest says the time is now to start thinking about sustainability in all aspects of business joining me.

Today is Adam Maloney CFO of Blanco Technology Group Adam offers expert insights into how companies can prepare for the new ESG regulations and ensure business sustainability in 2023, Adam. Thank you for joining us. Thank you for having me on Bonnie.

It's a pleasure. Well, Adam, can you share us a little bit give us more information about your background and how you got started in this field and the work that you're doing for Blanco Technology Group. Sure.

Yeah, so I'm Adam Maloney Chief Financial Officer of Blanko Technology Group. Blanco or the global market Leaders with data Erasure software. So what that means is the blanco have software which permanently erases data from any it equipment that you might have.

So if you can think of you're a company who's giving everybody a new laptop, you're gonna replace the get rid of the old ones you want to make sure all that data disappears from that device before you dispose of it. And so Blanca have software that will permanently raise that data. So that's really what we specialize in for my own perspective.

I obviously look after the financials but I also head up all things ESG internally for Blanco. So we recently became carbon neutral for 2021. We upgraded our msci rating to double a and we're really looking to be best practices as well as our own sustainability credentials concerned and that's something which I lead and makes me think about the reporting that we have to do as well.

Well, what are the new SEC requirements around carbon emissions reporting? I think there's a lot of confusion around that we hear about it, but not everyone's so clear and if you could explain that and also talk about how it impacts businesses. Yeah, I think what the SEC are looking to do is to really emulate a lot of Regulation that's going on.

In other parts of the world particularly in EU in the EU. There's a green deal initiative and very similar regulations are coming in the EU and what it's looking to do really standardize the reporting that companies do around their environmental impacts. There's a lot of confusion at the moment a lot of acronyms people not quite knowing what it is that they shouldn't shouldn't be reporting.

So the new regulation coming in should be laying out exactly what it is that company's gonna have to report. And what we think is going to happen particularly in the SEC and the detail hasn't come out fully yet is the companies will have to report their full scope three carbon emission calculation for all of their activities. And that means that people looking at the reporting of companies can do reasonable comparisons from one company to another they can't do at the moment because there's no consistency in the way that companies reporting is not verified by third-part by Third parties.

So we think this this regulation is welcome, but it is going to have a big impact of companies. Can you explain the difference between scope one scope 2 and scope 3 emissions? Yeah, sure.

I'll do my best. And so that's one. He's very much the direct greenhouse gas emissions that that you're company generates.

This is directly from your activities. So we think of the fuel that might be consumed by your company vehicles or the energy consumed by Machinery if you have Machinery, that's very much scope one. Spoke to is indirect greenhouse gas emissions.

So these will be things that will be energy consumed by third party. So for example business travel with full under on the scope too because the energy you're paying for the flight, but there's the airline are paying for the fuel that's consumed by that plane. So that's really where to go to one and two sit and those two areas are very much under the control of the organization themselves.

But where the challenge really comes in scope 3. This is in terms of the value chain, both upstream and downstream your suppliers and your customers the energy that they use so you can think I'm looking at all of the goods and services you buy into your organization and assigning a carbon impact of those devices of that of those companies. So if you buy a new PC for people in your in your organization or anything else you might buy in you have to take into account that carbon impact and the estimation is for most companies around about 70% of your over.

Carbon impacts comes from your scope through emissions which is the the ones aren't necessarily directly associated with your activities, but more the activities of your suppliers in particular. How can it departments including devops devops cyber Cloud native professionals. That's a lot of the people that are watching this channel.

How can they play a key role in supporting businesses in their sustainability goals? Yeah, I think that the first thing that all companies can do as an overall rule is to reduce their consumption. So I think you know what we see particularly, you know, let's see isn't overwhelming need to always have the latest equipment.

So a lot of equipment is replaced before it reaches end of useful life. So I think just reducing the amount that you can consume for example, if you have a quality in place, everybody gets a new laptop over three after three years you really need to have that does that individual really need a new laptop? So I think reducing consumption from the IT department for employees and not just employees of the equipment you use around your organization is really the first step that you can make Obviously you are at some point you are going to need to replace those assets.

And when you do that getting them from the most sustainable suppliers is going to be a really key aspect. So there are there can be big differences in terms of a laptop from one or that you might buy from Apple versus one you might buy from down or HP or whatever. It might be.

So really taking all of that into account is going to be important. Now I think finally just taking into account how you manage those assets when you do decides to dispose of them is really important because what we see for the most part is that most of the assets that companies buying particularly it departments by a shredded and Center landfill at the end of life, which clearly is a is very negative from an environmental impact. So I think just thinking a little bit more about how you might be able to recycle reuse repurpose.

Those assets is going to have a very positive impact as well. You talked a little bit about the data Erasure of what you do, but can you explain how data Erasure has a role in reducing a company's carbon footprint? Yeah, sure.

So if you can think as I said earlier about when you dispose of any it equipment is clearly going to be a lot of information on that device you specifically if it's a laptop or a PC with even a server even even a a tablet or mobile phone can be a lot of dates on there. We should not gonna want to have compromised. So you really need to think about how you're going to manage that and traditionally what's happened is is that all of these devices are shredded.

He's a very tiny fragment so that the data can't be recovered from from those devices but also means is you can't resell them can't reuse them. You can't recycle them because it's just ground into pretty much of a powder. So by using data Erasure software, you can permanently and auditably erase all data that's ever resided on that device to the point where it could no longer be recovered.

And if you do that, you can then consider how you're going to distribute the asset so we could be resold recycled repurpose or whatever. It might be and just give you a little bit of statistics. United Nations reported last year that over 53 million tons of E-Waste with generated in 2019 and around about half of that came from it devices.

So a huge amount of E-Waste generated from the it environment. We ourselves erased over 50 million devices, but we know that over 300 million PCS and laptops just on their own work were sold last year. So that means there's a huge number of these assets which are ending up in landfill which just doesn't need to happen.

I'm glad you mentioned that because that is a concern about the end of life of these products. What happens to them? Yeah, absolutely because it's not just the the sort of mass of the devices.

I mean the devices that we raise were 74 million kilos, but also the chemicals that held within those devices you'll get Mercury's present in nearly all I see equipment that once you shred put into landfill that's didn't released in sort of soil. And that's not released into the so often in the country where the essay is disposed of often. This goes into landfill in third world countries shipped many thousands of miles to be put into landfill in Africa or China wherever it might be so all around there's just a very negative environmental impacts.

Any unique challenges that technology companies face in meeting. That yeah sure. I think there are I mean typically technology companies don't have a very sort of material intensive environment so much of the emissions you're going to have is going to come from your scope through emissions, which is from your supply chain.

So you really need to look at where you're buying in your goods and services from to make sure you get it from that for the most sustainable suppliers. So from our part as I mentioned earlier, we became carbon neutral last year. We did the full scope free Carbon calculation.

When we found that the bulk of our carbon footprint was coming from the computer equipment that we were buying for our employees. So what we now need to do is to look at the manufacturers of those of that equipment and see if we can find it from a more sustainable supplier. And I think what you'll find is that the companies who are providing the most sustainable equipment.

They're going to be able to charge a premium for those devices. How can companies leverage Cloud native Technologies to reduce their carbon footprint? Yeah, I think in basic terms the cloud should be a very positive impact.

So the alternative to the cloud is you have to buy all of your own on premise equipment to just store the data that you might need. And so there's going to be a big carbon impact from doing that and then also running the energy for those devices. So moving to the cloud in theory helps a lot of that but it is still you sending your data to massive servers within huge data centers and those Data Center provide some sales around a lot of pressure to do to do a lot better.

So we've seen instances where the Big Data Center providers are just consuming huge amounts of energy and they're now Under Pressure to make sure that they get that energy from renewable sources. So I think we'll see over time being a switch away from you know, Carbon intensive energy suppliers to one's more renewable source, and those companies are starting to look at their own carbon footprint or want to go with the most sustainable Cloud providers because it impacts on your own carbon footprint if using an unsustainable cloud provider, so I think there'll be a switch from all of them over to more renewable energies and I think the other thing they'll need to look at is the way that they manage their equipment. So what we see at the moment is nearly all of the big cloud providers will have huge industrial shredders on site that their premises.

And when equipment reaches the end of life that equipment is thrown into the shredders shredded and goes to landfill. So there's barely any big cloud providers who recycle those assets at the moment and that's another way that they need to improve. So yes, the moves to the cloud should help but the cloud providers themselves needs to do a lot better.

And my last question is how can technology companies leverage sustainability as? a committee in the market. Yeah, I think particularly from from a hardware perspective.

There's a really big opportunity. We're starting to see already Apple for example of said that by 2030 everything that they sell will be made from recycled materials. And so what that means is that when you're looking to buy equipment in for your employees, you'll see that an Apple device could be have a much less a smaller carbon impact than another manufacturer who hasn't made their devices from recycled materials and there's had to mine those materials new.

So what we tend to see is that around about 70 to 80% of the carbon footprint of a laptop for example comes from the manufacture. So actually mining for the minerals the packaging the distribution if you're not having to mind for those minerals because you're using recycled materials, there's a huge carbon saving in that so I think there's a big opportunity for the for the technology companies to themselves to be more sustainable and as they are part of many other companies supply chain that will help their customers be more sustainable. So there's a there's a real circularity around that whole supply chain issue and that's going to start driving a change in behaviors particularly as this new regulation comes through I was really informative Adam Maloney's CFO of Blanco Technology Group.

Thank you so much for joining us. Thank you having me home wonderful. Well, right.

Well, we are going to have a lot more on Tech strong TV right after this.