What Does “ESG-First” Really Mean for Next-Generation ICT Product Development?

ESG compliance is no longer a peripheral concern in ICT product development; it has become an indispensable driver of innovation and responsibility. The global ESG software market is projected to reach US$5.59 billion by 2033, growing at a compound annual growth rate (CAGR) of 20.7%. The IT and telecommunications segment is leading this surge, driven by increasing regulatory pressure, stakeholder scrutiny, and the urgent need to decarbonise digital infrastructure. 

ICT firms face escalating demands to integrate ESG into every stage of product design and lifecycle, from energy-efficient hardware and ethical sourcing to data privacy and inclusive technology access. This multifaceted approach not only addresses pressing global challenges, such as climate change and digital equity, but also unlocks new avenues for growth by aligning technological advancements with societal well-being and regulatory compliance. 

ESG in ICT product development is being fundamentally reshaped by technological innovation, regulatory pressure, and evolving stakeholder expectations. The integration of AI, blockchain, and IoT is not only enhancing the accuracy and credibility of ESG reporting but also enabling real-time monitoring and optimisation of environmental and social impacts across the product lifecycle. Companies are moving beyond compliance to leverage ESG as a strategic lever for operational efficiency, risk mitigation, and value creation. Leading organisations are embedding ESG principles into their core product design, supply chain management, and end-of-life strategies. 

Regulatory Landscape and ESG Metrics 

The European Union’s Corporate Sustainability Reporting Directive (CSRD), enacted in December 2022, sets stringent ESG disclosure requirements for large enterprises, including ICT firms. The revised Energy Efficiency Directive requires data centres with an installed IT power demand of at least 500 kilowatts to report on their energy consumption, renewable energy use, and ICT capacity indicators. Similarly, the Commission Delegated Regulation (EU) 2024/1364 establishes a Common Union rating scheme for data centres, requiring annual reporting on sustainability KPIs. These regulations are mirrored in national frameworks, such as Indonesia’s Sustainability Disclosure Regulation, which further increases the compliance burden for multinational ICT firms. 

ICT companies are also expected to align with global standards, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the World Benchmarking Alliance (WBA) Digital Inclusion Benchmark. These frameworks prescribe specific ESG metrics, including carbon emissions (Scope 1, 2, and 3), e-waste traceability, supply chain labour practices, digital inclusion, and data privacy. For instance, the GSMA’s ESG Metrics for Mobile Benchmarking outlines 13 indicator topics across environment, digital inclusion, digital integrity, and supply chain, all of which are relevant to ICT product development.  

Case Study: AI-Driven ESG Compliance Platform 

A European fintech collaborated with Rishabh Software to create an AI/ML-powered ESG compliance platform. This SaaS-based solution automates ESG data extraction, scoring, and reporting for investment managers using AWS Lambda and hybrid cloud/on-premises architecture. 

The platform utilises Python-based scoring logic and machine learning models trained on historical ESG data to calculate dynamic ESG scores, thereby reducing manual effort and enhancing accuracy. Natural language processing modules interpret ESG policy documents and disclosures, automating compliance forms and reducing the need for manual review. 

This case illustrates how advanced ICT product development can directly address ESG compliance challenges, enabling the real-time identification of risks and effective portfolio monitoring.  

Case Study: ESG Dashboard in Manufacturing 

A European manufacturing firm adopted a digital ESG dashboard, combining traditional and agile methods to deliver the solution in 5.5 months. The dashboard improved reporting speed by 60% and achieved a 95% user adoption rate. 

During development, the team successfully incorporated two regulatory changes, demonstrating the dashboard’s adaptability to evolving ESG requirements. This case underscores the importance of integrating ESG into core IT systems, enabling continuous monitoring and rapid response to regulatory updates.  

Strategic Integration of ESG in Product Development 

To ensure ESG compliance, ICT companies must embed sustainability into their product development processes from the outset. This includes: 

• Design for sustainability: Prioritising energy efficiency, modular design, and recyclability in hardware and software products. 
  

• Supply chain transparency: Enforcing ESG standards across suppliers, focusing on responsible sourcing, labour practices, and environmental impact. 
  

• Data-driven decision making: Leveraging ESG software platforms to automate data collection, analysis, and reporting, ensuring regulatory compliance and international standards. 
  

• Lifecycle management: Implementing robust end-of-life strategies for ICT products, including take-back programs and e-waste recycling. 
  

Real-World Impact: Apple’s Supply Chain Initiative 

• Apple (Cupertino, USA): Apple has set a benchmark for ESG compliance in ICT product development. The company increased supply chain transparency by enforcing compliance with strict labour laws and environmental standards. Its Supplier Clean Energy Program enabled Apple to achieve 100% renewable energy use in all corporate operations. Apple’s comprehensive e-waste recycling programs and worker welfare initiatives have advanced its ESG ratings, demonstrating that rigorous compliance delivers measurable sustainability and business value.  
  

• Microsoft (Redmond, USA): Microsoft is committed to becoming carbon negative by 2030. The company measures its total carbon footprint, including Scope 3 emissions across its device and cloud product lifecycles. Microsoft’s Cloud Sustainability platform provides enterprise clients with a real-time dashboard to monitor, analyse, and report on ESG commitments, directly integrating ESG data into strategic and operational decision-making. In 2025, Microsoft publicly disclosed ESG performance metrics via its annual Impact Summary, reinforcing transparency and accountability.  

• Fujitsu (Tokyo, Japan): Fujitsu’s “Sustainable Manufacturing” initiative integrates ESG into product design and ICT solutions, leveraging AI and data analytics to monitor energy consumption, GHG emissions, and resource utilisation throughout its supply chain. The company’s 2025 Sustainability Report details how digital twins and IoT optimise production energy efficiency, ensuring all major manufacturing sites use 100% renewable electricity.  

• SAP (Walldorf, Germany): SAP embeds ESG into its software suite, offering tailored tools for regulatory compliance and real-time ESG data management. The SAP Sustainability Control Tower, launched in 2024, aggregates environmental and social metrics from its global client base, helping both SAP and its clients comply with the EU CSRD and other regulatory frameworks. SAP’s own operations reached carbon neutrality in 2023, as continuously verified through its publicly accessible ESG disclosures.  

These cases showcase not only adherence to global ESG frameworks but also how industry leaders integrate ESG compliance into their ICT product strategies, achieving transparent and measurable outcomes. Each company’s efforts are documented in annual ESG reports and regulatory disclosures, ensuring verifiability and trust for stakeholders. 

Conclusion: The Path Forward for ESG in ICT Product Development 

ESG compliance in ICT product development is a complex but essential endeavour. With the global ESG software market poised for rapid growth and regulatory requirements becoming increasingly stringent, ICT companies must adopt a proactive, data-driven approach to ESG. Case studies from leading firms demonstrate the tangible benefits of integrating ESG into product development, including reduced compliance costs and enhanced sustainability and stakeholder trust. 

As the ICT sector continues to evolve, embedding ESG considerations into every stage of product development will be critical to achieving long-term success and leadership in a sustainable digital economy.