By now, whether you believe in man-made climate change or not, the world is making major shifts from fossil fuels to renewable energy, and customers are making purchase decision (and even some governments are making investment decisions) on whether or not a certain company is being energy efficient.
It’s estimated that by 2025 the renewable energy market will be worth $1.5 trillion, which is a 6% growth rate year over year since 2108.
But why are we, a company that creates virtual data rooms, worrying about the environment? The answer is simple: because a virtual data room can be one of the greenest moves that you make as you choose to cut your company’s carbon emissions.
How Big is the Problem?
The first big question is how big is the problem? What are we trying to solve? What are the sources of energy inefficiency that need to be addressed by companies as they look toward the difference between data rooms and virtual data rooms?
Think about a major M&A deal. Two companies–even medium-sized companies–are going to spend months, maybe more than a year, going back and forth between the others’ headquarters to view their financial documents, their personnel data, their records, and meet with their management. And it’s not just one person who’s going: typically for a large merger you’ll have whole teams going, with finance teams and executives and legal departments. It can be quite a production. And if you have all of these people going back and forth, month after month, the airline miles can really add up, as well as the time in the car.
And all of that travel is bad for the environment.
In a typical year, a car emits 4.6 metric tons of carbon dioxide. You may brush that off and say “But we’re only driving to and from the airport–it’s not really that big of a deal.” But what about air travel? Flying is actually much worse for the environment than driving, even though you don’t see planes billowing out black puffs of smoke behind them. Planes, annually, emit 860 million metric tons of carbon dioxide into the atmosphere, and the International Civil Aviation Organization estimates that that number will rise anywhere from 300 to 800% by 2050.
This is all hard to relate to, because the numbers are so big, so think about this: for every metric ton of CO2 released into the atmosphere each year, 3 square meters of arctic ice will melt. So just by driving your car an average amount, each year that’s melting 13.8 square meters of sea ice.
And when you think about flights, one fifth of the warming under heavily traveled arctic routes is caused by air travel.
But What Does That Have to Do With Virtual Data Rooms?
By now we hope we’ve made the case that travel–especially travel that is based on fossil fuels, like planes and cars–is bad for the environment. So we’d like to do our part to negate those bad effects on the climate as much as possible. Every little bit helps, and one thing that we’re seeing increasingly is that companies are restricting unnecessary travel. Part of this began with the COVID-19 pandemic, when virtually all travel was restricted, but now companies are looking for–and finding–alternate ways to have meetings and get business done without sending a dozen employees on an airplane.
Enter Virtual Data Rooms. A Virtual Data Room (VDR) is just like a data room in a brick-and-mortar building: it’s a vault where all the sensitive financial records are held under lock and key and controlled closely under supervision. In the event of an M&A, finance officers and lawyers would be admitted to these rooms to go over this data and make sound financial decisions about the potential for a merger or acquisition. But a VDR lets this all happen without ever getting into a car or onto a plane.
A VDR uses DRM encrypted technology to allow certain users–say, a Chief Financial Officer–to view data from her computer, tablet or even phone without ever stepping foot inside the other company’s buildings. This is done through strict rights management and permissions that allow certain users access to certain information. Each user has their own specific permissions–maybe the CFO is allowed to see some documents while the legal team is allowed to see other documents.
Because of the DRM (digital rights management) users aren’t allowed to copy specified documents, or email them, or alter them without the owner’s permission. And therefore, if the deal falls through, the owner can rescind the other company’s permissions, cutting off their access to the documents at any time.
But Does This Really Matter?
The short answer is yes, and even if you’re not an environmentally-minded company. Going renewable in your energy consumption and going green in other practices is becoming a financially wise investment.
The Nielsen Global Online Survey this year found that 66% of consumers are more likely to purchase items from companies who are environmentally friendly. Among the top factors affecting purchase decisions were:
- Goods made from natural, fresh, organic ingredients
- Environmentally friendly brand
- A brand recognized for its social value
- Environmentally friendly packaging
- Ads that spotlight association of environmental and social benefits with the brand
There are also tax reasons why going green is good for business, including tax breaks for utilities that are renewable, credits and grants that are for alternative energy, credits for fuel-efficient vehicles, and bonus depreciation for reused or recycled machinery or equipment.
So you can see that going green is a wise decision not only for the environment, but for your company’s bottom line.