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MSPs Should Explore Sustainability and Green IT Services, Cisco and Canalys Research Finds

September 28, 2023 by Joe Panettieri

MSPs should explore ways to offer sustainability services to their customers, according to research findings from Canalys and networking giant Cisco Systems.

The overall MSP market will grow roughly 12.7% in 2023, the research found. Dig a little deeper, and the need for managed IT services focused on sustainability and green IT is emerging.

The report states: "Sustainability, which until now has been more prevalent in professional services, logistics, and device management specialists has become an immediate issue due to new regulations, particularly with the EU’s Corporate Sustainability Reporting Directive."

To understand the full picture on the Corporate Sustainability Reporting Directive (CSRD), keep these nuggets of information in mind.

  • The background on CSRD: By 2024, EU companies with more than 500 employees or more than €40m in turnover will be required to report on their environmental, social and governance impact.
  • The twist: In many cases, the CSRD directive expands BEYOND companies in the European Union. For instance, certain U.S. companies and other international companies will need to comply with the directive based on their EU business activities and other variables, PwC notes.
  • The widening net: CSRD's reach doesn't end there. The directive will expand to include companies with more than 250 employees in 2025, listed SMEs in 2026, and subsidiaries of non-European groups in 2028, according to Lefebvre Sarrut, a provider of legal and tax services.

United States Carbon Emissions Regulations: California and SEC Weigh In

Now, shift back to what Cisco and Canalys has to say: "CSRD, and any further regulations in other regions around the world, are both a huge challenge and an opportunity for partners in managed services."

Sustainable Tech Partner agrees. In particular, keep an eye on California Carbon Emissions Legislation known as SB 253. The SB 253 bill would require large companies doing business in California to disclose emissions tied to operations and supply chains, The Wall Street Journal notes.

At first glance, the only applies to companies with over $1 billion in revenue -- or roughly 5,400 companies, The Los Angeles Times estimates. But take a closer look, and the legislation extends to all companies that do business with those $1 billion+ organizations. That means MSPs -- of any size -- working with businesses in California may need to navigate the emissions legislation.

Meanwhile, the SEC is striving to announce its climate disclosure regulations by October 2023, according to a U.S. Securities and Exchange Commission agenda that surfaced on June 13, 2023. 

The SEC rules may extend across business supply chains -- which means the regulations could dramatically impact companies of all sizes, along with their technology partners.

Leveraging Green IT to Manage, Monitor, Reduce Energy Consumption

Meanwhile, both the surge in energy prices and climate change are driving a sustainability movement within the channel, especially in Europe, as customers "urgently look to reduce energy consumption and improve efficiency," according to Canalys and Cisco.

Among the report's additional findings and recommedations:

  • 40% of partners say their customers would not be prepared to pay a premium for sustainable products or solutions, so raising prices to offer green IT could be challenging in some cases.
  • At the very least, consulting for sustainability measures and regulatory compliance will be needed in the coming years.
  • As regulations increase, such as the EU’s Corporate Sustainability Reporting
    Directive, many customers will be looking for ways to improve their supply chain emissions scores in one way or another.
  • Whatever the use case, partners must prepare for these latest developments and be ready to answer the needs of customers in these areas.

Related: Search and search more than 100 technology partner programs focused on sustainability & green IT services.

Channel Partners, MSPs and IT Consulting Firms: Early Sustainability Movers

A separate Canalys research report, issued in mid-2023, explains how channel partners are addressing sustainability at differing rates across Europe, North America and other regions.

Meanwhile, some IT service providers and consulting firms appear to be ahead of the curve -- or at least setting a rapid pace -- with their sustainability services rollouts. Examples include MSP industry veterans at 1E, ESG Global, Evercycle, Kyndryl, Logicalis US, PC Powersave, ScalePad and TD Synnex.

Also of note: Global IT consulting firms that have MSP arms continue to expand their sustainability and ESG practices -- despite some ESG pushback from some conservative circles in the United States. Examples in the market include Accenture, Deloitte, EY, KPMG, NTT, PwC and Capgemini.

Related: Here's how MSPs can help CIOs to address sustainability priorities.

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