Digital for Green

04 February 2023 / Report

Leveraging Digital Technologies to Improve Sustainability

The “twin transition” is an approach that recognizes the large untapped opportunity for technology and data to drive sustainability goals. The digital transformation journey has long been underway. The fruits of this transition are tools that can help firms on their green journey. In the private sector, intentionally leveraging digital technologies and digital innovation to improve ESG performance (Digital for Green) is beginning to gain both traction and a more formal structure in business organizations, according to a series of interviews with executives from multinational firms in both the EU and US.

Trusted Insights for What's Ahead^®

To deliver on the twin transition, companies need to reinvent their applications of digital technologies. Using digitalization to measure and improve ESG performance can add value and drive productivity and efficiency. However, achieving all stakeholder goals requires the additional step of reinventing and realigning processes and business models.

A successful twin transition requires dedicated attention and efforts on three levels: Envisioning the transformation at the strategic level, enabling the organization to execute it, and engaging and empowering people of the organization to contribute.

Envisioning—The sustainability agenda and its integration withdigital transformation should be a purpose-driven, CEO-led initiative (with board support).
Enabling to execute—The workforce needs to be equipped with the right tools and methods to deliver on the vision, such as skills, training, infrastructure, processes, and communication.
Engaging and empowering—Cultural elements both internally (with regard to employees) and externally (with regard to other players in the ecosystem) need to be put in place. A climate of curiosity, experimentation, and learning is essential to build relationships, enable collaboration, and lead with focused conversation.

Act beyond environmental sustainability Digital innovation can lead to value creation and capture for all, including customers, company, stakeholders, and society as a whole—thus encompassing all three legs of the sustainability stool: financial, environmental, and also social.

There is no Digital for Green without Green Digital Although companies report that the specific use of digital technologies can lead to impacts such as reducing the need for business travel and more environmentally sustainable supply chains, digital transformation is not a magic bullet. The ICT industry itself is responsible for between 2.1 percent and 3.9 percent of global greenhouse gas (GHG) emissions, a share similar to the aviation sector. Yet, the issue is that these emissions are expected to drastically increase in the next years. Even though digital innovation can support or enable promising use cases, they have huge direct material and immaterial impacts that should be weighed against these promises and/ or be addressed.

Digital innovation should be considered as an enabler of sustainability transformation, and not the solution. Human beings are the most critical elements to make the change happen.

Leveraging Digital Technologies to Improve Sustainability

Trusted Insights for What's Ahead^®

To deliver on the twin transition, companies need to reinvent their applications of digital technologies. Using digitalization to measure and improve ESG performance can add value and drive productivity and efficiency. However, achieving all stakeholder goals requires the additional step of reinventing and realigning processes and business models.
A successful twin transition requires dedicated attention and efforts on three levels: Envisioning the transformation at the strategic level, enabling the organization to execute it, and engaging and empowering people of the organization to contribute.

Envisioning—The sustainability agenda and its integration withdigital transformation should be a purpose-driven, CEO-led initiative (with board support).
Enabling to execute—The workforce needs to be equipped with the right tools and methods to deliver on the vision, such as skills, training, infrastructure, processes, and communication.
Engaging and empowering—Cultural elements both internally (with regard to employees) and externally (with regard to other players in the ecosystem) need to be put in place. A climate of curiosity, experimentation, and learning is essential to build relationships, enable collaboration, and lead with focused conversation.

Act beyond environmental sustainability Digital innovation can lead to value creation and capture for all, including customers, company, stakeholders, and society as a whole—thus encompassing all three legs of the sustainability stool: financial, environmental, and also social.
There is no Digital for Green without Green Digital Although companies report that the specific use of digital technologies can lead to impacts such as reducing the need for business travel and more environmentally sustainable supply chains, digital transformation is not a magic bullet. The ICT industry itself is responsible for between 2.1 percent and 3.9 percent of global greenhouse gas (GHG) emissions, a share similar to the aviation sector. Yet, the issue is that these emissions are expected to drastically increase in the next years. Even though digital innovation can support or enable promising use cases, they have huge direct material and immaterial impacts that should be weighed against these promises and/ or be addressed.
Digital innovation should be considered as an enabler of sustainability transformation, and not the solution. Human beings are the most critical elements to make the change happen.