A Framework for Sustainable Digital Innovation

Sustainability:

Sustainability in business transformation refers to using green and socially responsible practices to change a business.?

This concept involves assessing business activities' environmental and social impact and aiming to minimize adverse effects while maximizing positive ones.?

Using renewable energy, reducing waste, implementing recycling programs, and ensuring ethical working conditions are some of the practices that must be the main target of global leaders.

In business transformation, sustainability balances the economic benefit with responsibility towards the environment and society.

Environmental pollution and aggression toward the environment reached such a level that the most influential leaders of the G20 group finally began to discuss the matter.

Sustainability is discussed at the United Nations General Assembly meetings, Davos, Doha, and the COP summits annually.

From a practical and pragmatic perspective, Very little has been accomplished. Borrowing Bill Gates's expression, "it is pure vaporware."?Much talking and a few actions.

The Earth can't wait anymore. In short, there are only elusive and blurred long-term promises.

People have recently been thinking about how companies view risk and ethics, how much they have to answer for their actions, and how well they can manage their stakeholders.?

Investors started to demand timely and accurate information in financial and non-financial terms after transparency gained importance.?

Communication outside the financial sector affected investment decisions almost as much as financial data.?

Companies that communicate their ESG activities to investors are better understood when listed firms incorporate ESG activities into their strategic agenda.?

Institutions now consider ESG factors in their investment process.?

At the end of the 1980s, companies started to issue environmental reports.?

Socially responsible investing (SRI) incorporates an investor's social or ethical criteria into their investment decision-making process. SRI first appeared in the US in the late 1960s and then spread to the UK, Canada, and Australia in the 1980s.?

Today, different tags are used for investments considering ESG issues, from socially responsible to sustainable investing.?

Some investors practice socially responsible investing by avoiding industries like tobacco, gambling, firearms, and go forth.?

A more sophisticated approach to sustainable investing, such as sustainable investing, is used to identify risks and opportunities.

A thorough analysis of ESG issues is then conducted.?

Therefore, many firms are utilizing their resources to generate voluntary ESG reports in addition to the mandatory ones to demonstrate better their financial and non-financial performance in line with the investor's demand, especially in mature markets.?

The evaluation of extra-financial reporting and financial results can only achieve a thorough measurement of a corporation's performance and risks.?

Assessment of environmental, social, and governance scores is vital for gauging a company's performance and survival sustainability.?

Nevertheless, environmental, social, and governance issues are expected to impact financial performance in the longer term.?

Investors who invest in the short term are less likely to consider ESG issues in their investment process. Resources have become more complex as investors and stakeholders become more aware of non-financial reporting and care about financial results. Firms must spend money on environmental and social issues and invest in getting better financial results and growth.

The influence of corporate social performance on corporate financial results has been extensively investigated and discussed.?

Academicians of management found a positive connection between CSR and the firm's economic performance.?

The relationship between economics and finance was either negative or non-significant.?

Some studies have strongly suggested that CSR affects performance and value.

Several studies have also reported negative relationships between social responsibility and profitability, and the finding that the intensity of social orientation did not influence the differences in performance.?

The differences in the quantification and measurement of CSR and the selected financial or economic performance measures can be attributed to these results.?

Because ESG disclosure by companies is generally vague and unstandardized, it can be challenging to integrate them into quantitative models.?

Furthermore, ESG issues are expected to impact financial performance long-term, whereas many investment decisions are relatively short-term.

Nature has been misused. Gas issuance, garbage disposal in rivers, lakes, and oceans, oil spills, the rupture of toxic waste dams, deforestation of forests, and fires all impact the environment.

Food products are particularly vulnerable to deterioration in tropical countries with high temperatures and humidity. Natural resources are limited and finite, so it is worth reminding.

Consequently, the best mitigation strategies and practices are urgently required to minimize losses and solve the prevalent sustainable issues in emerging countries.

Technology is an essential strategy for solving sustainability, diversity, and environmental problems to meet the demand for food supply, increase the productivity of food crops, and expand cultivation areas.

The Food Sustainability, Environmental Awareness, and Adaptation and Mitigation Strategies for Developing Countries provide information on the latest technology, mitigation, and environmental protection that must be applied for food sustainability in developing countries.

The results, such as global warming, floods, melting glaciers, and other environmental disasters, are immediately apparent.?What have concrete actions been taken so far? Are the Global Leaders doing anything else to solve the issues so far?

Few countries have done tiny actions so far. The G20 Leader must rush with such decisions and initiatives.

Several discussions have been held regarding mitigating adverse environmental effects and achieving zero carbon issuance by 2050.

Other topics concerning sustainable growth and development, banning plastic waste export, strengthening the G20 response to climate change, and cleaning up the oceans, rivers, and rivers environmental issues are on the discussion table.?They have concerns about sustainability issues and placing sustainability's importance on the same level as concerns about the coronavirus pandemic.

On the other hand, they don't want that sustainable initiatives impact the economy, preserving jobs.

Before deep diving into this controversial subject, as a reminder, sustainability is the principle of finding a balance between using natural resources and their exploitation by society.

It protects the environment and what it can offer in line with the population's quality of life, not impacting the climate.

Sustainability arises from discussing how humanity has been exploring and using natural and limited resources, with alternatives to preserve and prevent them from running out in nature.

Sustainability is the current watchword. The planet has suffered severe consequences, including devastating, exploited, polluted, and dirty, impacting natural resources such as forests, land, oceans, rivers, lakes, and fauna.

Many people are talking about sustainable development because of the awakening of society's awareness that natural resources are not infinite.?

The scientific community has discussed the importance of environmental issues and their degradation by human activities.

The four types of Sustainability:?

1. Environmental Sustainability: ?It refers to practices that protect natural resources for future generations.?
2. Economic Sustainability: Managing resources and finances is necessary for long-term stability.?
3. Social Sustainability: Ensuring that social systems are resilient and promoting equity and inclusion.?
4. Cultural Sustainability: It is about preserving and promoting cultural heritage and traditions.

The rapidly changing business environment requires a new kind of flexibility and adaptability.?

The priority for global enterprises is sustainable and digital innovation, which requires standardization, efficiency, and scale to deliver against margin and profit expectations.

Top-notch executives seek guidance on simultaneously meeting these complex and conflicting requests.

An innovative business model involves global value chain networks for sustainable innovation outcomes.

A value-driven business model like this requires a careful examination of digital transformation in the digital technology era.

Flexibility and adaptability are essential due to the high volatility of the business environment.

Sustainable and digital innovation requires standardization, efficiency, and scale to deliver against margin and profit expectations.

Managing directors need help to address all of these conflicting requests.

They understand that a successful business model requires global value chains.

A good business model requires a careful examination of digital transformation.

Digital innovation is no longer a characteristic of traditional software organizations.

The leading digital companies in the industry include IBM, Microsoft, Salesforce, Google, Amazon, Facebook (Meta), and Apple.

Digital technology innovation usually requires a new business model that requires IT-enabled changes.

There are two types of innovation in digital technology.

Digitization has multiple impacts, such as cost, delivery, technology use, and customer value.

Sustainable digital innovation requires considering environmental and social factors and long-term business viability.

This endeavor aims to achieve the firm's long-term needs and the livelihood of its ecosystem through internal and supply chain network processes.

Organizational agility and flexibility are critical strategic demands since some enterprises' competencies for responsiveness and adaptability hold an outstanding reputation, even though most companies prioritize agility or flexibility.

The synergistic organizational capability meets the needs of closed and open innovation requests to counter intense global competitiveness.

The top corporations in Corporate Knights’ Global 100 Index are committed to environmental sustainability and the well-being of their employees:

Sustainable companies place a high priority on environmentally friendly practices.?

Companies, organizations, and people have discussed many unsustainable and sustainable practices while finding ways to make the world more sustainable.?

Reading something about business with a report on how these industries contribute to climate change is possible.?

Ten of the most sustainable companies to watch out for in 2023:

1. Schnitzer Steel Industries takes a sustainable approach by recycling steel and other metals, one of the most carbon-intensive industries. Therefore, they transform this recycled scrap into finished products using electric arc furnaces powered by hydropower, making the metal lacking carbon.?
2. Vestas Wind Systems has seen a 24 percent cut in its volatile organic compound issuance since 2019. One of the most sustainable corporations in the world today is the companies' contribution to the renewable energy sector and the well-being and safety of workers.
3. Brambles:?It's hard to think of a company that makes waste as being sustainable. Brambles has reusable pallets, crates, and containers. The vision of Brambles is to make supply chains that are good for the environment.?
4. Brookfield Renewable Partners is a power generation company that makes 99 percent of its electricity from renewable energy sources like hydro, wind, and solar. With approximately 24,000 megawatts of generating capacity and over 8,000 power-generating facilities spread across five continents, it is one of the most significant investors of renewable power and climate transition assets.?
5. Autodesk generates 93 percent of its revenue from offering sustainability-optimizing software for buildings and infrastructure. It's committed to using technology to help customers use energy and materials more efficiently.
6. Evoqua Water Technologies is a company that recycles and reuses more water than it withdraws. Helping industrial, commercial, and municipal markets worldwide take a more sustainable approach in their day-to-day processes. Its Water One service helps companies build better water treatment systems.?
7. Stantec (joint position): The United Nations Decade of Ecosystem Restoration is a global contract signed by more than 70 companies that aims to prevent, stop and reverse the degradation of ecosystems. Consulting services provider provides engineering, architecture, and environmental solutions to businesses worldwide. The company's goal as an energy and automation provider is to provide cutting-edge digital solutions for businesses across the globe.?
8. Siemens Gamesa Renewable Energy developed the world's first recyclable wind turbine blade in 2021. The company is dedicated to protecting the environment and aims to combat poverty and foster technological education.?
9. Taiwan High-Speed Rail is a 350-kilometer railway system along the west coast of Taiwan. It took 43 million passengers on board in 2021 with a 99 percent punctuality rate. The company scored high on energy and carbon productivity and got high marks for its pension fund quality and for improving local connections overall.?
10. Dassault Systèmes is a software company that designs and makes 3D products, started in the aerospace industry and moved to sustainability. It helps companies with sustainable technology solutions for architecture, materials, homes, and lifestyle. Apart from its commitment to the environment, the company's positive social impact and the well-being of employees are also meaningful.

Source: CEO Magazine https://www.theceomagazine.com/business/news/sustainable-companies-2/

100 companies that are responsible for 71% of GHG issuance:

(GHG) Greenhouse gases from human activities contribute to climate change. Most of it is carbon dioxide from burning fossil fuels: coal, oil, and natural gas.

Which companies issue the most CO2?

The Carbon Majors Database report names ten companies that belch the most carbon dioxide into the atmosphere. According to the Centers for Disease Control and Prevention, a hundred companies were responsible for 71% of global GHG issuance:?

• China Coal: 14.3%
• Saudi Aramco: 4.5%
• Gazprom OAO: 3.9%
• National Iranian: Oil Co 2.3%
• ExxonMobil Corp: 2.0%
• Coal India: 1.9%
• Mexican Petrol: 1.9%
• Russia Coal: 1.9%
• Royal Dutch Shell PLC: 1.7%
• China National Petroleum Corp 1.6%

Source: Sustainability for all:

https://www.activesustainability.com/climate-change/100-companies-responsible-71-ghg-emissions/?_adin=02021864894

ESG: Environmental, Social, and Governance?

It is a set of rules that measure how investment affects a company or organization sustainably and ethically.?

Environmental, social, and governance practices help investors make informed decisions about investing in companies that positively impact the environment, society, and governance practices.?

ESG assesses a company or investment's long-term Sustainability and ethical practices and their impact on the broader economy and society.

Sustainability in business transformation refers to implementing green and socially responsible patterns while changing a business.?

It's about measuring the environmental and social impact of business activities and minimizing the adverse effects while maximizing the positive ones.?

Renewable energy, waste reduction, recycling programs, and ethical working conditions are some practices for achieving this.?

Sustainability in business transformation is about balancing the economic benefits of transformation with responsibility towards the environment and society. Environmental, Social, and Governance (ESG) is a set of criteria that companies use to measure their performance in different areas related to sustainability and ethical business practices.?

Environmental, social, and governance factors consider a company's impact on the environment, how it treats its employees and the quality of its governance practices.?

The environmental factors in a company include the use of renewable energy sources, the management of waste and issuance, and the efforts to reduce the carbon footprint. A company's labor practices, employee safety, and community involvement are social factors.

Governing factors include board diversity, executive compensation, and risk management policies.?

Many investors and companies increasingly consider ESG factors as part of their investment decisions and corporate strategies.?

Companies that focus on ESG factors tend to have better long-term financial performance, are less likely to face regulatory or legal issues, and are viewed more positively by consumers and other stakeholders.?

What are the advantages and benefits of companies adopting environmental, social, and governance practices?

Environmental, social, and governance issues have become increasingly essential company considerations for several reasons.?

There are several potential advantages and benefits for companies that adopt ESG:?

1. Companies that focus on ESG issues can enjoy a boost in reputation as socially responsible and environmentally conscious organizations.?

2. Companies with strong ESG performance are more likely to attract investors.?

3. Companies that prioritize environmental, social, and governance (ESG) issues successfully attract employees, and they feel more fulfilled working for an organization that aligns with their values.?

4. Implementing sustainable practices and reducing waste can help companies save money on resources and energy over the long term.?

5. Companies prioritizing ESG issues are more likely to remain loyal to companies' consumers (B2B) that are transparent about their environmental and societal impacts.?

Adopting ESG can help companies create value over the long term, build stronger relationships with stakeholders, and promote sustainable business practices.

ESG considerations can help promote a sustainable and ethical business environment that benefits society and the planet.

Is ESG a subset of corporate governance?

ESG refers to standards that companies should consider when making business decisions.

Corporate Governance is the rules, practices, and processes a company follows and controls.?

Corporate Governance overlaps with Environmental, Social, and?Governance factors, but ESG is not a part of Corporate Governance.

ESG factors and Corporate Governance are ways to run a business responsibly. Both of them are from different perspectives.

Companies can improve their sustainability, reduce environmental impact, and promote social responsibility by considering ESG factors.

Lessons Learned

There are many important lessons to be learned regarding environmental, social, and governance concepts and guidance. Some of the most critical lessons include:

1. Crucial considerations include materiality – Companies must identify and focus on ESG issues that are most relevant and significant to their business operations, stakeholders, and the broader environment.
2. Stakeholder engagement benefits companies that engage with their stakeholders, including investors, employees, customers, suppliers, and communities.
3. Companies that are transparent about their ESG performance and initiatives build trust and credibility with stakeholders, leading to improved reputation, increased market share, and access to capital.
4. Companies with effective governance structures and practices are better equipped to manage and mitigate environmental, social, and governance risks, improve performance, and ensure long-term sustainability.
5. Corporations adopting environmental, social, and governance factors into their business strategies can enhance financial performance and create long-term shareholder value.
6. Companies must track emerging environmental, social, and governance issues, such as climate change, diversity and inclusion, and supply chain transparency, and proactively develop strategies to manage associated risks and opportunities.

These lessons demonstrate that business decision-making should include ESG considerations to enhance long-term value and sustainability.

Norton Paratela

• IT Advisory Board Member: Broad experience as an IT Executive, holding over 30 years dedicated to IT strategy and digital transformation initiatives.
• Professional Background: My experience varies from project management to client success. I have overseen countless solutions for Salesforce (Sales and Services Clouds) SAP full-suite modules focused on customers' Corporate Business Transformation and Digital Innovation.
• My academic track includes two MBA certificates from American universities (General Motors University/Michigan University and Gartner/Santa Clara University) and five certificates as a Project Manager recognized and valid anywhere in the world.
• Holding several Executive Education Programs certifications at Columbia School of Business, MIT, Kellogg, University of Washington, Yale, University of Pennsylvania, and the University of California.
• As a member of the board of directors for International Paper in 2011, I worked on a project to use tree bark, branches, and leaves to make a digester furnace and a biomass boiler energy self-sufficient. Epoxy kernels were then converted into cellulose and paper.