Digital and Sustainability: The New Convergence

Sustainability and digitalization are reshaping business operations. Advanced technologies, including AI, IoT, and digital twins, are driving efficiencies that reduce environmental impact and support the green transition. However, the digital sector also creates sustainability challenges, including significant energy use and e-waste, requiring focused solutions.

Data centers consume 1.5% of global electricity annually, and e-waste exceeds 60 million metric tons annually. However, leveraging digital solutions strategically can reduce global greenhouse gas emissions by up to 30% by 2030.

In this edition of Consultport Insights, we explore how organizations can integrate digital transformation with sustainability goals, balancing innovation with environmental accountability.

Why It Matters

Digital technologies are crucial for addressing sustainability challenges while improving business performance. These tools provide clear environmental and economic benefits:?

• Cloud Technologies: Enable up to 47% of decarbonization initiatives, potentially reducing CO? emissions by 32 gigatons annually.
• Artificial Intelligence: Enhances Scope 3 emissions transparency, reducing logistics-related emissions by up to 40%.
• IoT and Digital Twins: Optimize resource consumption, decreasing energy usage by 10% on average.
• Machine Learning: Redesigns supply chains, cutting costs by 5–15% and reducing Scope 3 emissions by over 25%.

Companies adopting "Eco Digital" strategies outperform their peers, achieving 8% revenue growth compared to 5% for digital laggards and capturing higher EBIT margins. Thus, digital sustainability is not just an ethical imperative—it’s a strategic growth lever.

What’s Challenging

While digital technologies offer significant benefits for sustainability, they also come with environmental and operational challenges that must be addressed:

• Environmental Costs of Digitalization: Data centers' energy consumption is expected to rise to 8% of global electricity use by 2030. Moreover, a single hyper-scale data center can use up to 550,000 gallons (approximately 2.1 million liters) of water daily, totaling around 200 million gallons (760 million liters) annually.
• Digital Pollution: The energy required to store and transmit data contributes to digital pollution. For example, storing 100 GB of data in the cloud annually can produce approximately 0.2 tons of CO?, highlighting the environmental cost of data storage.
• E-Waste Management: Only 17% of e-waste is recycled, highlighting gaps in circular IT practices.

To address these challenges, companies should:

• Optimize Compute Efficiency: Consolidate server usage to eliminate idle capacity and reduce energy intensity.
• Migrate to the Cloud: Shift IT services to cloud providers with sustainable practices and renewable energy sources.
• Streamline Software Engineering: Use efficient programming languages and eliminate unnecessary functionalities to reduce energy demands.
• Enforce Sustainable Vendor Management: Assess and improve vendor sustainability practices, especially in outsourced IT functions.
• Adopt Circular IT Practices: Extend hardware lifecycles through reuse, repair, and refurbishment to reduce e-waste.

However, reducing the environmental impact of digitalization requires more than isolated solutions. It demands targeted efforts across IT and digital operations, including energy efficiency, resource optimization, and circular practices.

To address both challenges, companies must adopt an integrated model that ensures alignment between technological advancements, business processes, and sustainability goals. Let’s explore this more in detail.

What’s Next: The Need for an Integrated Model

To effectively tackle the environmental challenges of digitalization, businesses should embrace a structured framework that aligns digital technologies, operational processes, and Sustainable Development Goals (SDGs). This model provides a roadmap for leveraging digital tools responsibly:

1. Outermost Layer: Digital Technologies Focus on technologies like IoT, AI, and digital twins, which are suited for applications such as resource monitoring, supply chain optimization, and energy efficiency improvements.
2. Second Layer: Business Functions and Processes Apply these technologies strategically across operations planning, quality management, and other key areas to enhance sustainability outcomes.
3. Core Layer: Alignment with SDGs Target specific SDGs by aligning business activities with measurable sustainability goals. For example, geospatial technologies integrated with operations planning can enhance energy efficiency, directly contributing to SDG 7 (Affordable and Clean Energy).

This model bridges the gap between digital innovation and sustainability, ensuring that technological advancements deliver both environmental and economic value.?

The Path Towards Value

To start your digital sustainability journey, consider this 4-step strategy:?

1. Audit Digital Sustainability Performance: Assess IT infrastructure, software efficiency, and vendor sustainability practices while identifying opportunities for digital transformation in operations and supply chains.
2. Prioritize High-Impact Use Cases: Focus on initiatives with measurable sustainability and financial returns, such as optimizing cloud energy use or implementing digital twins.
3. Integrate Sustainability into Digital Strategies: Embed green technologies into digital operating models and align enterprise architecture with sustainability objectives. Workforce training should emphasize sustainable IT practices.
4. Launch Pilot Projects: Quick wins, such as extending IT hardware lifecycles or consolidating server usage, build momentum and demonstrate value.

Finally, organizations can engage freelance Sustainability Strategy Consultants to close expertise gaps. Platforms like Consultport connect businesses with top-tier consultants to navigate ESG complexities effectively.

?? For further reading:

?? Digital Sustainability: Aligning Technology with Green Goals