Digital strategy and sustainability are increasingly important and intertwined. Public discourse on these topics is growing louder and more interconnected as it becomes clear that digital technologies have a critical role to play in addressing key sustainability challenges.
These technologies are already having a profound impact on every aspect of the environmental, social, and governance criteria. In the environmental arena, Tesla, for example, is harnessing electrification and digital to disrupt the automotive sector and reduce vehicle emissions. Consider the impact of digital on social imperatives, such as the debate surrounding social media platforms, misinformation, and freedom of speech, or digital’s relevance to governance issues, as exemplified by the antitrust and taxation questions facing global Internet companies.
The urgent demand for companies to make progress on sustainability is now coming loud and clear from all corporate stakeholders: customers, employees, investors, and regulators. They expect companies to make sustainability central to their mission, and executives recognize that they need digital technologies to meet those expectations.
In a recent survey of 400 executives from various industries and regions conducted by Bain & Company and the World Economic Forum, 40 percent of respondents said they believe digital technologies are already having a positive impact on their sustainability goals. But along with many benefits, digital also brings downsides, and 10 percent of those surveyed believe digital technologies represent a risk to sustainability. They are especially concerned about the impact on mental health and wellness, data privacy, skills for the future, and diversity and inclusion.
Digital technologies are already used to measure and track sustainability progress, optimize the use of resources, reduce greenhouse gas emissions, and bring about a more circular economy, though their most prevalent uses vary by industry.
Measuring and minimizing environmental impact by improving supply chain transparency, for example, or optimizing energy use are two common applications. But digital technologies also enable innovation and collaboration. In 2020, more than 1,000 digital sustainability patents were issued globally, and venture capitalists invested $5.7 billion in the space. Both measures are climbing fast. Artificial intelligence in design, additive manufacturing, and digital twins are powerful tools for creating the next wave of climate change solutions. Internet of Things–enabled sensors, blockchain-based authentication, data-sharing platforms, and gamified apps foster collaboration across the value chain and align participants on common metrics and goals.
Digital does bring sustainability risks of its own. The executives we surveyed voiced concern about social issues, data privacy and security, electronic waste, and job losses due to automation, among other worries.
It’s important to mitigate these issues now, not wait for problems to manifest and then react. Two hundred years passed before we fully realized the climate impact of the first industrial revolution and began to address it. The effects of the fourth industrial revolution will affect us exponentially faster, especially as more of the economy and our daily lives transfers from the physical world to a virtual metaverse. Any strategy for building sustainability must account for both the positives and negatives of digital technology.
Designing a three-part game plan
Executives integrating digital technologies and sustainability can benefit from thinking of this transformation as a three-part game plan, pressing across offense, midfield, and defense to create an aligned and effective team.
This article originally appeared on Arabian Business