Digital Sustainability in 2024: Importance & Top 5 Digital Solutions
According to the World Economic Forum (WEF), climate change and environmental issues are the greatest threat to the global economy. The report reveals that organization executives are afraid that we might have been too late to effectively protect the planet we live in. However, rather than focusing on the negative aspects of the situation, we must act smartly to keep the environmental crisis at a manageable level.
Taking digital transformation initiatives by considering sustainability is one of the smart acts executives can do. According to a recent Accenture study (Figure 1), organizations that improve their sustainability by using effective digital solutions are more likely to become industry leaders in the future.
In this article, we will look at the definition and importance of digital sustainability as well as 5 essential digital sustainability solutions that can help your organization reduce its environmental and social impact while also improving its operating efficiency.
What is digital sustainability?
Digital sustainability is a sub-branch of digital transformation where firms aim to reach their sustainability goals by utilizing technologies such as:
The rationale behind digital sustainability is increasing corporate efficiency to promote sustainability. Consider a transportation company: if this company reduces the number of right/left turns with route optimizer software, the company can create the same economic value:
- It is cheaper because vehicles consume less fuel
- It is environmentally-friendly because vehicles emit less CO2.
Thus, thanks to digital sustainability firms can reduce:
- Per product carbon footprint
- Corporate greenhouse gas emissions
- Usage of virgin materials and natural resources
- Social inequalities.
While improving their profitability.
It is crucial to remember that, if not implemented carefully, digital transformation can make the climate situation worse. For instance, businesses may be able to manipulate customers to increase their consumption by combining AI/ML models with big data. The UN released its action plan for sustainable digital transformation in response to this concern.
Top 5 digital sustainability technologies
In this section, we introduce top 5 digital technologies that have high potential to improve sustainability with their examples and use cases (see Figure 2).
Figure 2: Top 5 digital sustainability solutions.
1. Public cloud computing
Direct emission reduction
By using public cloud services, enterprises can cut their IT-related greenhouse gas (GHG) emissions by over 6%, which is equivalent to the GHG emissions of more than 20 million cars.
Organizations can outsource their IT requirements and can use cloud capabilities such as advanced analytics, AI models, data storage, and more by paying a subscription fee to the cloud service provider.
Organizations generally prefer cloud services because they reduce hardware expenditure for digital transformation. However, they are also environmentally friendly because distributing IT services to third-party sources saves energy use. If each corporation has its own data center, the amount of electricity used to run and cool each one is excessive. On the other hand, centralization of data sources reduces energy consumption, so the GHG emissions.
It is important to note that firms that use public cloud platforms for their daily operations may suffer non-optimal cloud costs, which also means non-optimal energy use. As a result, cloud cost optimization is a method of lowering a company’s carbon footprint as well as monthly expenses.
Indirect contribution of cloud systems to sustainability
Besides direct GHG emission reduction, public cloud technologies can help businesses identify which activities are causing them to release too much GHG and visualize this information (see Figure 3). Firms can calculate their carbon footprint and fill out their environmental, social, and governance (ESG) reports more easily by utilizing public cloud computing.
Specialized cloud systems for calculating carbon footprints may easily import data of operation specific carbon emissions, which is required to calculate your company’s carbon footprint. Simulation capabilities in such solutions assist you in determining ways for minimizing your corporate carbon footprint and that of your products.
Figure 3: Data visualization example of a cloud carbon software.
2. Internet of things (IoT)
Thanks to the sensors, smart devices such as smart factories/offices, smart vehicles, and smart tractors can collect data from the environment in which they are deployed. Their immediate interconnection aids companies in reducing transportation and heating/lighting energy consumption, as well as the amount of water, pesticides, and fertilizer used in agriculture, as follows:
- Minimize office/factory energy consumption: Smart offices/factories can use sensors to optimize heating/cooling and lighting operations based on needs. For example, if no one is working in the office, lights/heating may be turned off automatically, or the cooling system of servers may be activated automatically in response to data center heat. These solutions provide both comfort and a reduction in GHG emissions. Big hotel chains, for example, use IoT for their HVAC systems to improve efficiency and sustainability.
- Optimize transportation: IoT has the potential to cut GHG emissions in two ways: Firstly, organizations may use track-and-trace systems to monitor the movement of raw materials, intermediate items, and final goods instantaneously, allowing them to improve their operations and reduce waste. Second, IoT may be used to nudge drivers to drive trucks in a more ecologically friendly manner (e.g. driving with low rpm). Also, smart truck sensors can allow fleet firms to detect even modest degradation, and maintain them before leading to increased GHG emissions. Michelin launched such an initiative in 2013, which lowered oil use by 2.5 liters per 100 kilometers.
- Optimize warehouse temperature and humidity: Protecting the quality of some commodities requires storing them in specific circumstances, such as a specific temperature and humidity. Constantly changing the volume of commodities within the warehouse makes maintaining a steady temperature and humidity difficult. Warehouse dynamism allows businesses to maintain the same conditions while spending less electricity. Corena, a pharmaceutical dealer, for example, uses IoT in its warehouses to ensure the safety of its products while also lowering GHG emissions.
- Produce enough energy: Energy companies can assess electricity consumption in real time using data from smart devices. As a result, supply will always be close to demand. Since storing energy is still challenging for energy companies, they can minimize inefficiency and GHG emissions this way.
- Reduce pesticide, fertilizer, and water consumption: Sustainability entails not just lowering GHG emissions but also removing pollutants from the land and water. The EU has decided to cut pesticide and fertilizer consumption by 50% and 20%, respectively, by 2030. Smart sensors can be used to analyze soil and guide farmers to use the necessary amounts of pesticide and fertilizer. Irrigation sensors can also detect soil dryness and optimize water consumption.
You can also read our 7 Ways to Improve Your Supply Chain Sustainability article.
3. AI/ML models
According to PwC, AI/ML models can improve global GDP by 4.4 percent while reducing GHG emissions by more than 4% until 2030 (see Figure 4).
Figure 4: Global impact on AI on GHG emissions and GDP:
Effective prediction capabilities of AI/ML models can optimize commodities transportation-supply, and agriculture efficiency. By doing so, they can reduce energy/water consumption.
- Transportation optimization: According to PwC, deploying AI for transportation optimization can cut world GHG emissions by 1% until 2030.
- Autonomous vehicles powered by AI can be programmed to travel in the most environmentally responsible way possible.
- Autonomous vehicles have greater storage area since there is no need for a space for a driver. Thus, fewer trucks can distribute the same amount of goods.
- Supply chain managers can use traffic and route optimization algorithms to determine the most ecologically friendly routes to reduce GHG emissions.
- Supply optimization: AI/ML models can reduce waste or energy usage for preserving inventories by forecasting demand. Therefore, AI/ML models will have the greatest impact on reducing GHG emissions in the energy sector, since energy storage is currently inefficient or unattainable in some circumstances. Also, hyperlocal weather forecasting helps energy companies to better locate their solar panels or wind turbines. The contribution of AI/ML models to GHG emission reduction in the energy sector is estimated to be around 2% till 2030.
- Agriculture efficiency: AI/ML models can be used to estimate the appropriate split of forest and agricultural regions for land-use management. Farmers can plant their crops on land that requires minimum irrigation or fertilizer thanks to these models. Additionally, AI/ML models’ hyper-local weather forecasting capabilities improve efficiency for farmers. According to PwC, the contribution of AI models to agriculture can reduce GHG emissions by roughly 0.3% until 2030.
AIMultiple considers blockchain as a critical technology for digital sustainability. Blockchain enables parties to share data securely and transparently. Thus, blockchain technology improves supply chain visibility, which is important because for many businesses, indirect activities related to the supply chain account for more than 80–90% of organizational carbon footprint (see Figure 5).
Figure 5: Indirect activities (gray) account for the bulk of GHG emissions for some sectors.
Moreover, tracking supply chains closely assists companies in measuring their businesses’ circularity gap since companies can measure circular economy metrics such as:
- Percentage of non-virgin material used
- The exact recycling rate of the products
- Percentage of circular water consumption and so on.
For instance, Renault plans to invest more into Blockchain technology to enhance visibility regarding recycling operations.
Due to data validation use cases of blockchain, companies can:
- Execute their supplier code of conduct accurately: Supplier code of conduct is an ESG metric where companies determine social and environmental criteria for cooperating. Businesses can assess whether or not their suppliers are sincere environmentalists by using automated and transparent data validation applications of blockchain.
- Increase product stewardship: Blockchain allows firms to monitor their products easily. So they can switch to a service model where customers rent the goods.
- Reduce the expense of non-compliance: International treaties and agreements like the Paris Climate Agreement force states to modify their laws. Organizations can lower the costs associated with non-compliance by exchanging data with officials in a transparent and automated manner with blockchain.
To learn more about product stewardship and circular economy best practices you can read our Top 6 Circular Economy Best Practices for Businesses article.
5. Telecommuting technologies and virtual offices
Because offices and daily commutes are significant sources of GHG emissions, video conferencing solutions such as Zoom, Google Meet, and Microsoft Teams, can significantly cut GHG emissions and waste.
The COVID-19 pandemic has shown us our technological infrastructure is ready to move remote or hybrid working practices. Fighting against climate change requires us to change our many habits and our working habits can be one of them.
Online seminars and training programs can also help businesses minimize their GHG emissions. Many firms employ virtual reality for education when an intern or student needs hands-on experience to grasp the subject.
The Oxford Medical Simulation platform, for example, uses virtual reality glasses to assist interns in interacting with unconscious patients. They learn how to diagnose and treat such patients thanks to the platform.
To learn more about the importance of ESG reporting for scaling up your business you can read our article 4 Ways ESG Reporting Will Boost Your Business Performance. To find which metrics to include in the report you can read our 3 Types of Metrics CEOs Must Use in ESG Reporting article.
You can also check our list of digital transformation consultants.
Please contact us for further information about digital sustainability:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
To stay up-to-date on B2B tech & accelerate your enterprise:Follow on
Next to Read
Your email address will not be published. All fields are required.