Sustainability must be at the centre of a digital strategy – not a sideshow or an afterthought
Organisations are always on the lookout for ways to grow, and two of the biggest opportunities on their radar are digital technology and sustainability.
Sustainability preoccupies them for two reasons. Investors, customers and regulators expect action in the face of climate change, and making it central to their brand’s purpose is a vital step. It’s also a chance to boost the bottom line, with the UN’s Sustainable Development Goals representing a commercial opportunity estimated to be worth $12tn a year by 2030.
Meanwhile, businesses are investing in digital technology to help them gain deeper insights into their businesses and markets, increase efficiency and make better-informed decisions.
But these parallel tracks aren’t yet converging. Businesses might be using digital technology to understand their customers, maximise efficiency and control costs, but they’re not connecting it directly to the climate.
At the same time, progress on sustainability is too slow. Companies might be making commitments to cut plastic in their supply chains and reach net zero by 2030, but global emissions will have to fall by 7% a year to hit the targets set by the Paris Agreement. Small-scale change won’t make a big enough difference.
So how can companies use technology investments to make bigger strides towards sustainability?
It’s about bringing parallel investments in digital and sustainability together. This is the key to making the transformative changes the planet needs. For that to happen, leaders will need to think differently about why a specific technology or digital platform is the right answer, and how they can use it to make that leap forward in sustainability.
Digitisation accelerates sustainability because it helps make operations more efficient. It also unlocks and shares the data that makes supply chains more transparent. And that leads to the behaviour change that produces circular business models and product strategies, along with better consumer choices.
Put sustainability at the heart of digital strategy
To make this possible, sustainability must be at the centre of a digital strategy. It can’t be a sideshow to the digital effort, or an afterthought. If sustainability is part of the digital business case and reason for investing, it will be part of how targets are set and value is measured.
Again, it’s all about data. If it’s not measured, it can’t change. Regulatory trends increasingly demand reporting, such as carbon accounting, in any case, so now is the time to build this into digital, data and management information plans.
If sustainability is a top priority, it will shape the culture, differentiate the company and make it more competitive. Most importantly, it will guide how digital technology is deployed.
Global food business Dole, for instance, is reinventing its whole production process to be more efficient and waste less. But sustainability is central to its purpose. And that affects how it deploys technology, from handheld inspection devices to inspect the fruit, to biodegrading and recycling the packaging.
Give technology new roles to play
The next step is to reimagine the role of digital technology. Until now, it’s largely helped to boost efficiency, cut costs and promote consumption.
Digital twins, for example, have been used for tasks such as predictive maintenance and tightening up production processes, but sustainability and efficiency are closely linked – making better use of resources and materials makes your company more sustainable. By using digital twins to track performance through the cycle, from carbon, water and waste to plastics, packaging and product, leaders can generate insight into how sustainable the supply chain really is, and how it can be improved.
The most important thing here is blending technologies, system design and hardware and creating a platform for artificial intelligence (AI) to unlock the value of the data.
It’s already happening. Examples abound of digital twins, drones and sensors in the service of sustainability.
For instance, farmers are using imaging and data modelling to make better decisions about crops and irrigation to curb water use, waste and pollution. Research shows that applying fertiliser based on data models would cut use by 36%, curbing CO2 emissions and groundwater pollution.
The internet of things (IoT) and data analytics has helped Water Source create a water purification system to change how people around the world access safe drinking water. And Unilever has shown how digital doesn’t just track a fast-changing situation like Covid-19 but predicts it well enough to enable better decisions.
These examples show technology’s potential to tackle some of humanity’s biggest challenges by making supply chains and infrastructure smart by design.
Blockchain, too, has a potential role in establishing trust and transparency in circular economy supply chains, offering tamper-proof evidence that reused or repurposed materials are what the makers claim. Cutting the need for third-party auditors could also help markets emerge more quickly.
Investing in digital technology to become more sustainable is capital-intensive and is likely to demand new business models. It’s inherently risky. But here again, digital twins can help by enabling you to model the future and clarify and quantify risk and uncertainty.
Put sustainability at the heart of the digital experience
Putting sustainability at the heart of digital strategy also means putting transparency and collaboration at the heart of the digital user experience, whether that’s internally or for consumers. Transparency on sustainability should be part of how everyone interacts with your business, from employees tracking their work and development, to investors plotting performance.
Technology brings data to life to win hearts and minds and underline the implications of decisions, whether it’s using video to tell the story of a fair trade coffee farmer, or using augmented reality to make a business case for sustainable investment.
Similarly, digital tools help influence customers’ choices. It could be on-the-spot data in retail settings to underline sustainable product credentials, or it could be data over time emphasising the ongoing impact of buying or renting more sustainable products.
This is the kind of transparency that overcomes mistrust of greenwashing and convinces consumers and stakeholders alike that commitment, action and results are real.