Camellia Ye: Investigating the Information and Communications Technology (ICT) Sector’s Sustainability Initiatives Through Global Supply Chains

Authors: Camellia Ye, Lina Fowler, Lin Shi

Abstract: The products and services provided by ICT, or Information and Communications Technology, companies have altered the way we live, yet very little is known about their sustainability practices and environmental impacts. Their supply chains are deep, complex, and difficult to monitor due to their global nature and rapid development. There are few regulations that require mandatory reporting of the supply chain; for the most part, reporting is voluntary and not standardized. In order to learn more about how ICT companies manage and communicate their sustainable-sourcing practices (or SSPs), we assembled a set of companies from the Bloomberg Terminal dataset with public-facing sustainability disclosures, which formed about 10% of all ICT companies. Our goal was to manually code, with NVivo software, 20% of the dataset. For 164 companies, we collected their reports on their social and environmental supply chain practices from 2015 and beyond, and if that was not available, we looked for any company web pages with sustainability-related information. The codebook was developed based on ICT-specific literature and a prior large-scale study in a different sector (Seuring & Müller, 2008). Throughout the coding process, the codebook was iteratively refined. In the first phase of coding, each company was coded by both coders to set standardized coding practices and ensure reliability. In the second phase, companies were independently coded and inter-coder reliability tests were administered weekly.

We found that 83.4% of companies use at least one SSP. However, the scope and the rigor of these practices are limited. Only 7.2% apply strictly to raw material producers and 1.5% to 1st tier suppliers. In most cases, the specific tier of the SSP is not specified. Furthermore, the most common SSPs are internal standards, which are up to the individual company to define, implement, and regulate. While many companies are taking great initiatives to lower their carbon footprint of their products at the use phase and in their data centers, only 1.1% of energy programs are implemented in the 1st tier and sub tier despite manufacturing accounting for 70-80% of a device’s carbon footprint over its lifetime. However, we recognize that the ICT sector is broad. Many sub-categories, such as Software and Services, lack a physical, discernable supply chain and thus can not implement the usual SSPs. Our findings give insight into ICT companies and their SSPs, highlighting the limitations and opportunities of corporate practices to address their impacts on the larger world. 

6 Comments on “Camellia Ye: Investigating the Information and Communications Technology (ICT) Sector’s Sustainability Initiatives Through Global Supply Chains

  1. Hi Camellia,

    Great presentation! I really loved how you and Lina tag teamed the presentation in this way.

    I wonder more about some of your methods. You highlighted how three big companies (Apple, Alphabet and Microsoft) were not included in your 20% sample, and I wonder if this was on purpose, or just by random chance? What kind of sampling did you do to narrow down your sample? Do you think including those big companies would have significantly changed your results, and if so, in what ways?

    I also thought it was so interesting that the majority of SSPs are company managed, and thus there is no standard. Why do you think the sector has developed this way? Do you feel like companies are honest in their SSP efforts, or is there concern that perhaps some might do it as a form of “greenwashing” (to make their companies seem environmentally friendly and appeal to the public, while they may be less environmental-friendly in reality)?

    • Thanks, Bianca!

      Apple, Alphabet, Microsoft were included in our 20% sample by chance. We randomly sampled our overall dataset, obtained from GRI, to get to our final set of companies. We coded those companies for a separate analysis because the sustainability work they’re doing, compared to the rest of the ICT sector, is quite far reaching. I don’t think including an additional 3 companies would have significantly changed our results. Even a company like Apple still shares a similar pattern to the management and types of SSPs of our results. For example, favoring internal standards over external ones or applying SSPs to the higher tiers (use, data center).

      When it comes to the supply chain, external standards are tricky. We saw a lot of external standards like ROHS (which has to do with hazardous materials in the product) that are applied to the company and product but not many in the supply chain. The sector is still relatively new and there aren’t many pass studies or information on its supply chain, which is why I think many external monitoring are simply not up to that point. And ones that do exist are often very vague about boundaries, simply because they have encapsulate such a diverse sector and supply chain. Furthermore, getting say an ISO certification is expensive, and we’ve come across many companies who say they simply can not afford to go through the certification/audit process. Instead they developed their own standards.

      In the reports, I definitely think there is both some element of greenwashing, which is why we included coding of the “strength” of the SSP, whether it’s a statement/branding or it’s being monitored and evaluated.

    • I don’t think so. Apple has a great take-back program and recently introduced a robot that can disassemble devices and capture as much of the valuable materials as possible. Apple’s in pursuit of a circular economy, a future where they will not have to mine anymore. Even though Apple’s a big business leader, I personally think that they are aware that the traditional ways of making a profit won’t last long and will ultimately harm them and others. They’re figuring out a way to be operate both successfully and sustainably. As for Amazon, their e-waste policies, don’t give me the greatest confidence. However, they’re not spending a lot of time talking about their devices since their main operations are transportation/logistics and data centers. I see a lot of work being done to use renewable energies to power those activities.

  2. Just wanted to let you know that this was a super interesting report to read. It’s somewhat surprising how private companies are taking the lead on sustainability practices, even though it involves higher cost solutions than the traditional supply chain of material and energy. I hope to see this work being published as an op-ed in media too.

    • Thank you!

      We were actually discussing a potential article in response to some of the media coverage we see on tech companies’ sustainability initiatives, which are generally vague and accusatory and don’t have a full view of the company from its deepest suppliers to its public face. It’s interesting how we’ve been unconsciously trained to be skeptical about the good-doings of any big corporation and how that might actually deter them from pursuing the “greener” choice.

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