Sustainable business leadership and digitalization – what we can learn from the crisis

On March 11, 2020, the WHO declared the COVID-19 outbreak a pandemic and called for a collective international response – also from the business sector – to rapidly detect, diagnose, and prevent the further spread of the disease. Indeed, business has a critical role to play on the way back to the “new normal”. Sustainable business leadership is needed now more than ever before. Because it is precisely in these volatile times that sustainable companies prove to be the most successful and resilient companies (WBCSD, 2020 a different kind of “super year”).

Solidary responses to COVID-19

We – the private sector – must unite in solidarity, take action, and lead by example. In the last months I have observed how iPoint’s customers from all over the world demonstrated their responsibility towards employees and society in these challenging times. Like many other companies, our customers have taken various steps to ensure employees’ health and well-being as well as business continuity: from urgent but necessary measures such as temporary production stops or pauses in projects, to the digitalization of processes and alternative work models such as remote working from home.

Besides numerous financial and material donations, many of our customers also provided their own protective equipment, products, or facilities to medical personnel. Several companies offered their own technical equipment to find solutions, while pharmaceutical companies increased the production of essential critical products, and manufacturing companies repurposed their production facilities and switched to the production of medical devices, protective equipment, and disinfectants. Beyond providing valuable resources that can help save lives, this move helps the companies keep their workers and facilities operating despite difficult economic conditions. I am very impressed and proud of how much commitment our customers worldwide have shown to combat the immediate effects of the crisis.

Exposing supply chain risks

On the downside, the COVID-19 crisis has also shown us the risks of our connected economy, in particular, of globally connected supply chains. The unique challenges they are experiencing include, for example, disruptions to the availability of goods sourced from areas particularly affected by the pandemic, demand shocks resulting from people stocking up on goods to comply with restrictions on movements, or competition between states for control of vital raw materials.

Another major challenge is the lack of transparency and visibility into the supply chain. Many supply chains are complex, with multiple players at each tier, and fragmented due to increased subcontracting, which is why companies often do not know all of their suppliers. In fact, it is not uncommon to have four or more tiers of suppliers, what makes it extremely difficult for companies to have visibility into who all their suppliers are.

Supply chain transparency and the power of digitalization

The current situation exposes that the risks associated with supply chain fragmentation and globalization have been unpriced and largely ignored. Not only iPoint’s customers have become aware of how extremely important and relevant the visibility and traceability of products and materials are for the resilience of their supply chains. Margi Van Gogh of the World Economic Forum recently stressed that “Visibility, traceability, and interoperability are essential to connected, agile and more resilient supply systems now and well beyond the immediate COVID-19 crisis.”

But how can we achieve a secure end-to-end visibility and transparency across the supply chain? For me, the answer is clear: with digital data exchange. Data recorded, e.g., on a Blockchain is not only instantly verifiable, but also immutable. Each transaction is recorded and added to the previous one, resulting in a growing chain of information that provides a full visibility into a product’s supply chain journey from manufacturing to the consumer to recycling. We at iPoint view Blockchain as a powerful enabler of other technologies (AI, IoT, Machine Learning, robotics, etc.) as well as a tool which can support supply chain actors in providing, consuming, and monitoring verified and traceable product compliance information. Check out our recent blockchain-based projects SustainBlock and CarbonBlock.

Sustainable business leadership

In the weeks since COVID-19 was declared a pandemic, we recognized that our economy and supply chains are not shock-proof and have vulnerabilities that haven’t been anticipated. However, for the future, we must not only look at the digitalization of our supply chains, but combine this strategies to make our economy and business actions more sustainable. As Dr David Nabarro (WHO) and Peter Bakker (WBCSD) emphasized in a joint statement, “Business must double down on making its products, processes and business models more sustainable to prevent further shocks from happening.”

In a recently published analysis, the WBCSD shows why sustainable business models are so important. In view of the global stock markets collapse due to the coronavirus crisis, the WBCSD analyzed how companies that take sustainability seriously perform compared to those companies who don't. I think the results speak for themselves: The analysis revealed that WBCSD member companies – striving to realize the SDGs – outperform the major stock indexes by about 10%. This crisis should be a wake-up call for all of us to focus on pressing hard on creating a more sustainable world with improved risk awareness and resilience in our supply chains, operations, and business models.

Returning to the “new normal”

We cannot simply return to normality, but go back to the "new normal". What should this new normality look like? The crisis has definitely led us to think outside of the box – and witness the breakthrough of digitalization as a solution to many challenges we face in these volatile times. What we have been able to accomplish in the face of the immediate threat of COVID-19 has shown that a lot depends on our willingness to change and adapt to changing circumstances. Like many other companies worldwide, our customers have demonstrated extraordinary adaptability, solidarity, and strength. Many thanks for your commitment!

The disruption to our global supply system serves as a reminder that we are all part of the same ecosystem. As we currently start to reboot our global supply chains, we should focus on building new networks of collaboration, like the INATBA COVID Task Force, a global consortium of public and private parties activating blockchain-based solutions to address profound challenges to global systems and services caused by the COVID-19 pandemic. With blockchain technology we have the tool to build a global, adaptive system that networks data intelligence for every item flowing through it. Now, all stakeholders across the supply system are required to make our economy a truly connected one.

I am convinced that digitalization can pave the way for a sustainable recovery from this global economic crisis. So, let’s join forces to make the coronavirus recovery a chance for a re-set to build a sustainable, inclusive, circular, resilient, and prosperous economy – by unlocking the full transformational potential and harnessing the benefits of digitalization. I cordially invite you to become part of our ever-growing ecosystem of 55,000 companies around the globe to work together throughout the supply chain, increase transparency and trust, create shared value, and use cutting-edge technologies to realize our vision of the “new normal” – a sustainable world for future generations. Everyone needs to do their part. Everyone needs to work together.

So stay healthy and help pushing - we can only achieve these goals collaboratively – and with digital means.