VMware, one of the largest software and cloud computing companies, demonstrates progress towards ‘2030 Agenda’ in their latest ESG report, but insists there is more to be done.
The 68-page report, released earlier this month, contains an abundance of information, sharing the organisations performance against its ‘2030 Agenda’ goals, while outlining plans to “create a more equitable, sustainable, and resilient world” as a result.
The ‘2030 agenda’ was first revealed by VMware in 2021 and set forth a 10-year commitment for the business to accomplish 30 goals split equally between focusses of sustainability, equity, and trust (commonly environmental, social, and governance). VMware says having a set agenda is an important step in ensuring company goals always align with the outcomes of all 3 areas.
“To create long-term value, we must embed concrete goals into the fabric of our business operations and product innovation.” said Raghu Raghuram, Chief Executive Officer. “In that way, we make our 2030 Agenda outcomes—Sustainability, Equity and Trust— tangible.”
So, what does the report highlight?
Sustainability
The report reveals the company is well on its way to achieving its 2030 net-zero pledge by reducing Scope 1 and 2 emissions by 84% from their 2019 baseline, along with reducing employee commute emissions by 44%. A feat which has helped them achieve #1 for Environment in the software industry on JUST 100’s 2022 rankings, sitting just above Microsoft.
This success is partly due to collaboration with the City of Palo Alto (VMware’s HQ) on a first-of-its-kind community microgrid project. The system consists of two 1 MWh batteries which integrate with existing rooftop solar panels and 100% renewable grid power to provide reliable, long-term power for the VMware campus, community, and even the local Mobile Emergency Operations Center (MEOC) in times of need.
“The reason why climate change can’t knock our lights out is because human ingenuity is a renewable resource.” said Nicola Acutt, VP, ESG, about the project.
Last year, the company also announced their signing of The Climate Pledge to further their net-zero progress alongside pledge founder Amazon, and the likes of Mercedes-Benz, Heineken, and SAP. The initiative now has more than 300 organisations who have signed up, with $2bn investment to support the development of sustainable technologies. It targets all signatories to achieve net-zero carbon by 2040; however, VMware has gone one step further, aiming to do so for their operations and supply chains by 2030.
While progress has been made with the Scope 1 & 2 reductions, it bears mentioning that these emissions on average only account for between 5-10% of an organisations overall emissions, with Scope 3 taking up the vast majority. Therefore, plans to reach their net-zero goal includes, by 2024, achieving the benchmark of 75% of annual spend with suppliers who have set science-based emission reduction targets themselves. EcoVadis, a global supplier ratings platform, will be used to provide transparency into their supply chain emissions.
Equity
For VMware, equity means access, opportunity, and advancement for everybody involved. Creating a diverse and inclusive work environment that creates a sense of belonging and community.
Along these lines, the report highlights that the company achieved its fifth 100% score on the Human Rights Campaign Corporate Equality Index, a national benchmarking tool on corporate policies, practices, and benefits relevant to LGBTQ+ employees.
For 2022, the company has also increased representation of women by 2.1% over the previous year, reaching almost 30% of their overall workforce. This aligns closely with research performed by Deloitte in 2021 which predicts large tech firms will reach nearly 33% overall female representation in their workforces in 2022.
The company also spent $127M working with diverse suppliers, and moving forwards, intends to build on this by committing to spend at least $1.5 billion by 2030.
By 2030, VMware is planning to achieve equitable pay across all genders and ethnicities, along with establishing a management team consisting of at least 50% women and underrepresented minorities.
Trust
Swapping out the normal ‘governance’ section with ‘trust’, this covers matters of security with customer data, a looming concern for many with data breaches on the rise. While also ensuring employees can feel confident the company runs transparently and ethically from the top.
In this area, VMware is also demonstrating positive results, ranking fourth in the software and telecommunications category by Newsweek’s first-ever list of America’s Most Trusted Companies, sitting just behind American Tower, a global provider of wireless communications infrastructure. Also being awarded the industries-first AAA rating for network detection and response by SE Labs, a U.K. based independent testing lab.
Executive compensation is a main staple of governance. It’s here that VMware has updated their practices to include ESG milestones in executive compensation plans to ensure performance is focused on the right area, a trend seen more commonly recently, with Unilever and Walmart also implementing the tactic.
While the report shows real progress towards the companies 2030 Agenda goals, there is still work to be done, as highlighted by Nicola Acutt, Vice President, ESG at the company who says “We recognize that we have a long way to go to realize VMware’s vision to build a more sustainable, equitable and secure future for all; however, FY22 showed that we are positioned well to accelerate this critical work in the coming years.”
You can read the full report here.
