Fourth Industrial Revolution

Here's how digital transformation and sustainability can flourish together

The 'Refill Zone' is seen in the UK supermarket Asda, as the store launches a new sustainability strategy, in Leeds, Britain, October 19, 2020. Picture taken October 19, 2020. REUTERS/Molly Darlington - RC27MJ9NR2B9

Companies that invest in sustainability set themselves up for business success. Image: REUTERS/Molly Darlington

John Frey
Chief Technologist, Sustainable Transformation, Hewlett Packard Enterprise
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Fourth Industrial Revolution

  • Companies need to integrate sustainability strategies across multiple dimensions of their digital transformation roadmaps.
  • Data-sharing and tracking platforms can reduce environmental impacts before they are magnified.
  • Prospective talent and consumers put pressure on companies to do their best in this domain, or risk losing out.

Most every organisation has accelerated its digital transformation initiatives in 2020. But how many leaders have managed to create sustainable digital enterprises? That is, organisations putting people and the planet at the core of their digital transformation strategies.

Companies that invest in sustainability generally find that improved resilience, better operational performance and business success follow. This principle held true in the face of the COVID-19 pandemic as sustainable indices outperformed their parent benchmarks. COVID-19 has also pulled back the curtain on our vulnerabilities to myriad global risks.

The Forum’s Global Risks Report 2021 found that, second to infectious diseases, climate action failure is among a subset of environmental risks that pose the second-most imminent threat to our society.

Improving our future readiness means redirecting capital toward sustainable companies, governments incentivizing sustainable activities, customers showing preference for sustainable products and services, and employees demanding sustainable leadership.

To meet expectations, our businesses need to align their digital transformation and sustainability objectives, and their decisions need to be grounded in data.

How data computes its way to sustainability

The rapid digitalisation catalysed by COVID-19 presents the opportunity to rethink how we make decisions and how we apply technology in new and meaningful ways. Immense opportunity exists for enterprises that can capture the value of data to drive more sustainable solutions. For example, it’s estimated that the value unlocked by artificial intelligence in helping design out waste for food, keeping products and materials in use, and regenerating natural systems, could be up to $127 billion a year in 2030.

The digital transformations of today must be purpose-led, delivering for all stakeholders as a requisite for company success. Spearheading that effort is the Forum's CEO Champions group on Accelerating Digital Transformation in a Post-COVID-19 World, which is led by Antonio Neri, the CEO of Hewlett Packard Enterprise (HPE).

Have you read?

Today, this group published a playbook, Bridging Digital and Environmental Goals, designed to provide leaders with recommended actions and examples to leverage data-led insights and create products, strategies and business models that minimise their impact on the planet.

The playbook recommends that leaders integrate sustainability strategies and priorities across seven dimensions of their digital transformation roadmaps.

The ten pillars of sustainable digital transformation, as presented in the playbook

Here are three key ways you can set yourself on a path to success in digitalizing any business using purpose:

Embracing product-as-a-service as part of a business model refresh

In many instances, the inclusion of environmental factors into the decision-making tree results in a redefinition of a company’s business models. For instance, product-as-a-service and leasing models are on the rise, combining data from products and users to improve asset utilisation and resource use through intelligent provisioning and other operational enhancements.

This has taken place to dramatic effect here at HPE. A long-time provider of advanced IT infrastructure products to organisations throughout the world, HPE is strategically pivoting into an edge-to-cloud, platform-as-a-service company. The move is in response to customers desiring to shift away from buying and operating IT equipment, and instead consuming it as a service. In doing so, they are eliminating the overprovisioning of IT, thus reducing both capital expenditures and environmental footprint.

We believe this approach is the future of IT.

Reducing environmental impact throughout the supply chain

Optimising environmental impacts within operations is important, but its positive impact will be hindered if similar measures aren’t taken throughout the entire supply chain. Today’s technologies enable us to stay connected with people, systems and things along the way. The use of data-sharing and tracking platforms provides both visibility and accountability – often in real time – thereby reducing environmental impacts before they are magnified.

Top beverage manufacturer, AB InBev, is using blockchain to help track the handling of key ingredients throughout the supply chain. This has created a tamper-proof digital audit trail to ensure environmental standards are maintained and to improve the use of natural resources.

Pressure from inside and out

Increasingly, consumers want the companies they use to be focused on sustainable issues. So, too, do employees – and prospective employees. Indeed, the ability to attract and retain talent – especially among younger generations – is tied to a company’s performance with respect to sustainability and other purpose-centric initiatives.

Laggards in these areas will suffer from talent shortages, setting themselves up for lacklustre digital transformation results.

Leaders must integrate sustainability considerations as a strategic imperative throughout their organisations to ensure they remain both resilient and competitive. Doing so will give them the tools to benefit from their digital transformation initiatives, thus positioning them for success in 2021 – and for long-term value creation over time.

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Related topics:
Fourth Industrial RevolutionClimate ActionNature and Biodiversity
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