How digital transformation is shaping sustainability
In a time of global crisis, it has become clear that sustainability goes hand in hand with digital technology. Companies must act quickly to embed sustainable digitisation within their business strategy to stay relevant.
If you’re old enough, you will remember how at the dawn of the twenty-first century, digital disrupted the world as we knew it. From music to books, news to television programmes and even your fridge, new technology changed how we interacted with everyday items. As part of that, the spread and integration of the internet led to an exponential increase in data and the subsequent development of smart devices to process it.
Such IOT (Internet of Things) devices are being increasingly perfected to capture and transmit vast amounts of data in the most efficient ways, and combined with the advance of AI, are affecting business operations across all industries and sectors – including the approach to sustainability.
Accelerated transformation, unprecedented insight
Since that point, although many organisations have embarked on a digital transformation journey, it’s often been at a comparatively slow pace. That changed in 2020 with the COVID-19 pandemic and ensuing lockdown, which bumped digital transformation to the top of strategic operational priorities. It’s been estimated that global IT spending has increased by 9% in 2021 (ahead of revenue expectations) to a projected total of $4 billion.
But crucially, not only have organisations had to invest significant resources to ensure adequate digital infrastructure is in place – indeed, it’s become somewhat synonymous with corporate survival – technology has confronted them with unprecedented access and insight to complex issues, as well as allowing them to quantify and measure with greater accuracy. To take one example: how companies understand their supply chains and are now able to spot unethical practices or inefficiencies.
Tech giants such as Microsoft have been developing ‘green’ tools to help companies tackle these issues, whether to reduce waste or enable smart energy consumption. For example, a forest management AI tool has been developed that generates an extensive directory of all forests in a fraction of the time and cost of traditional surveys, improving future management, data precision and quality, while reducing manual fieldwork. Retailers have also been increasingly adopting AI and ML (machine learning) to reduce energy consumption and CO2 emissions within their supply chains, as well as to optimise online services for customers. Walmart is one example, leveraging digital technology to advance its sustainable strategy. To reduce food waste, the retail giant developed a ML algorithm that scans produce to assess its quality and freshness, saving the corporation $86 million in food waste during the first six months.Once again, technology is reshaping how business is done and the understanding companies have of their wider societal and environmental impact.
Positive change on a global scale
Our society is at a critical point in time and arguably the spotlight has moved away from short-term profitability to catalysing positive, long-term change. There are countless examples of digital technologies helping address global climate change challenges, or fostering sustainable and innovative development to measure and address change.
Digital sustainability activities, such as big data analytics, are contributing directly to the achievement of global ESG (environmental, social and governance) goals set by international and transnational governing bodies, including the 2030 Paris Climate agreement targets and the UN Sustainable Development Goals. As a direct result, we are seeing changes to business models, as well a new level of institutional accountability being promoted.
However, digitisation has also posed some new challenges. There is a globally uneven distribution of access to smart devices and tools, and a lack of adequate privacy regulations – something that stems from the limited understanding of digital technologies by governing bodies. Luckily, the deeper connections between our societies and economies, even across national borders, combined with a digital-age-driven knowledge explosion, has enabled better problem solving and encouraged multi-stakeholder groups to collaborate – by setting the right standards and global goals.
Integrating sustainability into operations
So what should organisations do to bridge their digital and environmental goals to promote sustainable growth? According to the latest World Economic Forum Framework for Business Action, the digital transformation roadmap needs to be integrated with clear sustainability strategies, touching on business models, operations, supply chain, culture, investment and overall decision making. In a study on corporate competitiveness in Europe, Accenture observed how companies that invest in innovation and undertake initiatives combining sustainability impact and technology, are more likely to become tomorrow’s leaders. Where possible, track data to measure environmental and social impacts, as well as to set realistic, non-financial targets.
Ultimately, if this past year has taught us anything it is that organisations that combine data-led decision making with a proactive approach to social wellbeing and environmental awareness are more resilient than their peers; attracting better talent, retaining a wider client pool and ultimately receiving more capital, all while contributing to the advancement of a more sustainable global society.
If you'd like to find out more about sustainability and how it's driving change, or what Emperor can do to support your journey, we'd love to hear from you. Please get in touch with Sara Cudicio at [email protected]