Digital and sustainability: a winning combination?

In today’s world, sustainability is not a matter of choice; it’s an imperative for any business that wants to satisfy its customers, shareholders, and investors—not to mention current and potential employees. But there’s more to it than meeting stakeholder expectations. In many industries, doing the right thing on environmental, social, and governance (ESG) concerns comes with a significant opportunity to boost organizational value.

Digital technologies are playing a pivotal role in this shift, and the penny has started to drop that they could hold the key to a sustainable future. In fact, the World Economic Forum went so far as to say that “the digital technology sector is probably the world’s most powerful influencer to accelerate action to stabilize global temperatures well below 2°C,” and predicted that digital solutions could reduce overall carbon emissions by 15 percent by 2030.

As organizations have cottoned on to these developments, Google searches on “digital sustainability” have seen a five-fold spike during the past two years (see figure 1).

During this time, advancing technologies have begun to reveal climate impact solutions that were not previously possible. These include:?

Frontier technologies such as AI and the blockchain, which are embedding transparency and traceability across supply chains, enabling organizations to make more sustainable decisions and report reliably on their actions.

Data and analytics capabilities, which can be used to optimize almost every part of a business, including its product development and manufacturing processes, energy use, transport and logistics networks, and waste management.

Digital infrastructure, such as collaboration tools and virtual reality office spaces that allow employees to team up, communicate, and perform work-related tasks remotely. As well as cutting travel-related CO2 emissions, these provide a more engaging and productive remote work experience.

Ecosystem and partnerships tools, which enable organizations to connect and share information with external partners easily, accelerating the effective use and transfer of data within the ecosystem.

This of course is only a flavor of what’s possible: we see many use cases connected to these enablers across the entire value chain (see figure 2).

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Let’s look at some examples in action.?

#7 AI and blockchain-enabled transparency

Both AI and the blockchain are breaking new ground for organizations in their supply chains, by making them more transparent, and allowing raw materials and products to be traced from beginning to end. With the EU preparing to roll out a regulatory framework for sustainability reporting and sustainable finance, they have come at just the right time. One AI solution that can help organizations meet their obligations is Briink, which simplifies sustainable finance reporting by retrieving relevant data from a variety of sources, automating workflows, and analyzing evidence, among other features. As for the blockchain, many companies are now using its capabilities to register and publish product sourcing information. For example, Nestlé has partnered with OpenSC to prove its credentials for milk and other products, while the jewelry company Brilliant Earth uses Everledger to guarantee the origin of the gemstones it uses. Looking at the social aspect of ESG, blockchain technology has also enabled Levi’s? to keep on top of its employees’ health and wellbeing in a way that protects their personal details.

#13 Industrial AI for yield optimization

Another area where AI is delivering on its promise is in food production. We worked with a North American agriculture business, which needed to adapt to a downward trend in meat consumption, and increased consumer interest in both plant-based foods, and companies’ use of pesticides. With increasing urbanization and a growing population both adding pressure on already limited farmland space, our client wanted to ensure it could grow hardier plants, deliver larger yields, reduce development delays, and cut costs. We piloted the use of mathematical programming in the seed development process, which showed significant economic impact compared to manual planning, including better allocation of crops to growing locations, along with fewer missed planting deadlines and delayed trials, and greater visibility of the end-to-end activity. The AI was also able to help our client reduce its use of pesticides by boosting cross-pollination, while crop yields increased thanks to a smoother-running process.

There’s a wealth of opportunity out there, but to mine it effectively, organizations need to land the sustainability message loud and clear within their own technology functions—and mitigate against the negative environmental effects that increased digitization can bring. Look out for our next article, when we’ll explore why digital needs to green itself, and how firms can bring digital and sustainability together effectively.

Digital and sustainability can be a winning combination for your business. Interested to know more? Why not take part in our Digital ESG Health Index to see how your organization stacks up. Or contact one of our authors to find the right starting point: Dieter Gerdemann, Sabine Spittler , René Ceipek, PhD, Tim Biermann , Matthias Piehozki , Veronika Bitter , Olivia Kelnreiter and Luca Serratore.