Tech executives feel pressure to look beyond profits

The vast majority of global technology executives say they are increasingly focusing on their environmental and societal impact due to pressure from the public, employees and stakeholders.

According to the latest EY Technology Global Capital Confidence Barometer, almost 80% of tech leaders said stakeholders had a greater awareness around the environmental and social impacts of their business.

Meanwhile 86% accepted that a focus on profit alone was no longer sustainable.

“With the tech sector coming under increasing scrutiny because of factors including social trust, privacy, data use and regulatory compliance, customers and employees are now looking to technology companies to take the lead on environmental and social change,” said Grit Young, Mergers and Acquisitions partner at EY Ireland.

“By readily disclosing performance measures and being transparent about issues such as sustainable operations, energy management and product consumption, companies can build trust and credibility within and outside their organisation.”

Despite the recognition of the need to look beyond profit, almost half of tech firms surveyed said they expected profitability to rebound by the end of this year.

While the broader economy had suffered badly from the impact of the pandemic, big tech has been one of the few beneficiaries – with companies like Apple, Amazon and Microsoft seeing profits increase in 2020.

The pandemic has also prompted tech firms to rethink their approach to hiring talent, with more emphasis on flexible and remote working.

Meanwhile the difficulties in attracting workers with the right skills was leading executives to give employees more of a say in their firms’ overall strategies.

More than half of executives also expect mergers and acquisitions activity to pick up again this year, having stalled in 2020.

However increased competition from private capital, as well as geopolitical tensions, meant that the vast majority expected to pursue a different approach with their strategic investments.