The software licensing decisions made by businesses can have a significant impact on their carbon emissions and technology spending, with pressure to upgrade programs potentially forcing companies to replace computers and servers that are still working, according to software broker Forscope.

Manufacturing accounts for 74 per cent of a corporate laptop’s total emissions over a four-year lifecycle, compared with 14 per cent from use, 12 per cent from transport and less than 1 per cent from recycling, a lifecycle study cited by the company found.

Despite this, many European businesses continue to assess their IT-related emissions primarily through electricity consumption and data centre usage, overlooking the environmental impact of the hardware they purchase and how frequently they replace it.

Forscope argues that software licensing models can influence the environmental footprint of IT by determining which devices businesses need and how long they can continue using existing equipment efficiently.

Newer software typically requires more powerful computers, while changes to licensing terms or the withdrawal of support for older versions can encourage businesses to upgrade.

This can lead to functional laptops and servers being replaced simply because they cannot run newer software efficiently, a process known as software-induced obsolescence.

The issue is reflected in the international Software Carbon Intensity standard, ISO/IEC 21031:2024, which takes account of emissions associated with hardware manufacturing rather than focusing exclusively on the electricity consumed while software operates.

The scale of the wider problem is highlighted by the United Nations’ Global E-waste Monitor 2024 report, which found that global electronic waste reached 62 million tonnes in 2022, an increase of 82 per cent compared with 2010.

Only 22.3 per cent of that waste was formally collected and recycled, while electronic waste is growing five times faster than recycling efforts.

The United Nations projects that global electronic waste will reach 82 million tonnes by 2030 if current trends continue.

“The environmental footprint of IT is not created only when a device consumes electricity,” said Ludek Bartak, head of communication at Forscope.

A substantial part of the impact comes from manufacturing hardware and determining how frequently it is replaced, he explained, making software a factor in deciding what equipment a business needs and how long it can remain in effective use.

Dusan Hubacek, chief channel officer at Forscope, said many organisations assumed they had to upgrade whenever a software supplier changed its licensing policy or released a new version.

Replacing computers and servers that remain fully functional increases both environmental impact and capital expenditure, he added.

“Sustainable IT does not mean automatically rejecting innovation, but making rational decisions based on actual needs, security and the real lifecycle of the infrastructure,” Hubacek said.

The issue also has implications for corporate sustainability reporting.

The European Union’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards, including ESRS E1, set out requirements for reporting greenhouse gas emissions across Scope 1, Scope 2 and Scope 3.

Scope 3 covers indirect emissions across a company’s value chain, including emissions associated with purchasing new IT hardware and using cloud services or data centres.

A regulatory simplification package adopted in February 2026, known as Omnibus, narrowed the scope of the reporting requirements to large organisations with more than 1,000 employees and annual turnover exceeding €450 million, according to the text supplied by Forscope.

Businesses that remain within the rules still need accurate and verifiable emissions data, the company said.

Against this backdrop, secondary perpetual software licences can provide a legal and controlled way to extend the useful life of existing systems and compatible hardware.

Bartak said secondary software was not a complete solution to the problem, but could serve as an important tool in the digital circular economy.

It allows organisations to modernise at their own pace and avoid unnecessary hardware investment when older software versions continue to meet their operational requirements.