Smart Cities Industry ESG Thematic Report, 2023

Environment, Social and Governance (ESG) in Smart Cities Industry

Sustainable and responsible investments have become key trends in the current era, where investors, governments and the companies are making an effort to create an impact by setting off ESG policies.

The increase in need of infrastructural support such as water sanitation, waste management, roads and traffic management in the urban areas due to globalization has led to the evolution of the smart city market. The need for quality of life, which includes the ease of mobility, access to essential services such as health care and safety and environmental quality are the core factors that impact the smart cities industry. It can be noted that the aforementioned aspects can be achieved through proper planning and governance only.

The global Covid-19 pandemic has impacted the market by shedding light on the importance of the public health care infrastructure and the dependence on it, leading the market to be more inclusive of ESG.  The United Nations’ Sustainable Development Goals (UN SDGs) is a comprehensive framework that helps companies in this market obtain a perspective on the impact of their products and operations on ESG parameters.

ESG Trends

A wide range of issues in the ESG arena are addressed in the smart cities management, ranging from environment to governance. It has been reported that most of the customers of the smart city market have addressed the demand for a quality environment. One of the key challenges in the urban areas in terms of environment is waste management. Waste from synthetic materials which are inorganic and food, which is organic, has been reported to cause environmental distress and social health hazards.

The synthetic waste is collected and recycled to make new products, thereby reducing the threat of environmental distress. To manage the waste, different approaches such as aerobic digestion, where the organic waste is exposed to microorganisms, which break down the huge compounds into smaller components and gasification of waste are some of the processes used in organic waste management.

It has been reported that the byproducts from the gasification can be used as renewable energy sources, used as a waste to energy process, making it more environmental efficient, simultaneously achieving the United Nations Sustainable Development Goals of affordable clean energy (SDG7) and sustainable cities and communities (SDG11).

Further inclusion of digital technologies into the infrastructure has led to the social inclusion of vulnerable groups of the society. In this regard some of the players are making a collaboration with the municipal bodies to promote safety and social inclusiveness across the urban areas, impacting the social aspect of ESG.

It has been reported that key companies of the market have included technologies such as artificial intelligence for the purpose of managing the traffic in the urban areas. One of the key companies of the market has pledged to bring down the carbon emissions and create carbon neutral communities by 2030.

The implementation of digital technologies in the various municipal departments has been reported to increase the governance efficiency, resulting in achieving the UN SDG goals of institutions for peace and justice (SDG16).

Growth of the Smart Cities Market

The smart cities market at global scale was valued at USD 1,090.64 billion as of 2021 and is expected to grow with a CAGR (compound annual growth rate) of 24.2% from 2022 to 2030. The United Nations sustainable development goals are the underlying factors that drive the market both commercially and in terms of sustainability, by addressing a wide range of issues pertaining to environment, social and governance.

Key Companies in this theme

    • ABB Limited

    • AGT International

    • AVEVA Group plc.

    • Cisco Systems, Inc.

    • Ericsson

    • General Electric

Scope of the Smart Cities Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Aspects of the Smart Cities Industry ESG Thematic Report

    • Offers a global perspective of the smart cities industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.