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How to use digitisation as a contribution to sustainable business

The question of whether digitisation will lead to a sustainable economy has been on our minds since the introduction of the first computers in the workplace. The predictions at the time were that by the year 2000, paper would have disappeared from the offices. Reality, however, showed exactly the opposite development, with more computers producing more and more printouts. Paper consumption today is higher than ever before.

This dilemma illustrates very clearly the challenges we face in introducing digital technologies from the perspective of sustainable development. On the one hand, new technologies lead to efficiency gains, for example in production; on the other hand, they are often passed on in the market by a lower price and, conversely, they create increased demand. This so-called “rebound effect” means that we are now consuming significantly more and are thus continuing to consume more resources.

“So far, we have not yet succeeded in establishing sustainability as a driver of social rethinking.”

The climate debate in 2019 could turn out to be a historic turning point. For the first time, the issue of sustainability has been discussed in such a broad public that not only all political parties, but even companies have put the topic high on their agenda. Just think that in the not too distant future VW only wants to build electric cars or that the BAYER Group even wants to become a climate-neutral company by 2030. This is leading to massive changes in the area of mobility, but also in our industrial production, such as with Industry 4.0.

This objective of the large companies indirectly leads to very specific demands on the medium-sized supplier industry. A company can only be convincingly credible if its entire value chain is organised in a sustainable manner. This means that companies must address the question of what contribution they can make to sustainable value creation as quickly as possible. The digitization of production and business processes offers great potential for this, provided that digitization is planned from the outset in the spirit of sustainable development.

Trends and sustainability goals: Conflicting goals vs. Synergies

The trend towards sustainable development mentioned above is underpinned by very specific sustainability goals of the United Nations. A total of 17 goals (Social Development Goals SDG) are intended to enable sustainable development on our planet. These include social goals such as combating poverty and hunger, but also providing access to education and creating discreet economic growth. Of course, both climate protection and the protection of life in water and on land are also important goals.

Not all the trends surrounding digitisation are positive for sustainable development. This applies first and foremost to the digital infrastructure. Every click on the Internet causes electricity consumption somewhere in the world. If we imagine an urban space with hundreds of thousands of sensors (cameras, motion detectors, etc.) and network infrastructure such as WLAN antennas and 5G, all of which require electricity, the discussion about energy-efficient street lighting seems downright petty. Another conflict of objectives is the rebound effect, which is being promoted by the increasing trend towards individualization. The ever faster and cheaper availability of products is resulting in more electronic and plastic waste and increasing logistics costs. Similarly, the required flexibilization of value chains is an obstacle to sustainable, long-term development.

In contrast to the conflicting goals, the synergy potentials and common fields of action show the extent to which digitization can contribute to sustainable development. In particular, the transparency of production processes should be mentioned here, with which, for example, a CO2 footprint can be determined. Transparency enables the identification of large consumers of resources and an increase in the efficiency of the resources used. As a common field of action, digital change should be used at all levels to achieve an understanding of sustainability goals and to contribute to their achievement

Digitisation as a driver of sustainable development in companies

Not all objectives can be supported equally well by companies using digital technology, but especially with regard to digital business processes, eight objectives can be identified that should be relevant for companies. In my opinion, the following goals are particularly relevant for companies:

1) Economic growth and decent work: With Work 4.0, cooperation between people and machines takes on a new dimension. Nowadays, it is no longer only physical activities that machines perform, but also algorithms that support knowledge and decision-making processes. In the future, decisions can always be optimized in consideration of resource consumption, provided that the employees are sufficiently qualified for this.

2) Protection of the climate: The obvious solution is not always the best one for the climate. For example, the insulation of houses is not in doubt with regard to energy saving, but the materials used for this purpose are less climate-friendly. New materials such as concrete insulation could make a good contribution to this. Companies should therefore always look for new, even more climate-friendly solutions in research and development. The same applies to the optimization of processes, for example in the area of logistics and mobility; support for process planning through artificial intelligence can make great savings possible.

3) Industry, innovation and infrastructure: New production technologies such as 3D printing can enable material savings, communication between machines and equipment reduces waste in production, and virtual factories enable resource-efficient planning from the outset and real-time measurement of deviations. Achieving these goals is in the companies’ own best interest, as they not only contribute to sustainable development but also save money.

4) Responsible consumption / production: Many of the points already mentioned contribute to this goal. In summary, it requires a true closed loop economy in which raw materials can be recycled again and again. This responsibility begins with the materials used in the products and ends with the energy used in the production process.

In addition, digital technologies can make a major contribution in specific industries, for example in healthcare, smart cities or agriculture.

The road to sustainability is long

Companies cannot change their products and processes from one day to the next. In many areas, the necessary technologies are also still lacking in order to operate in a completely sustainable manner. Nevertheless, it is important to face up to the issue in order to be prepared for future requirements on the part of customers and employees.

Above all, this means that companies should pay attention to the developments at their customers to what extent sustainable development already plays a role. In addition, companies themselves should take action and, for example, consider resource consumption and optimization potential when making new investments.

Finally, long-term goals, such as switching to renewable energies, help to evaluate today’s decisions in the right context. However, it should always be remembered that sustainability is not an end in itself for most companies. Rather, it is more important to find out how an orientation towards sustainability goals can create a competitive advantage for companies, for example through new products or more efficient processes.

Where will you start tomorrow?

Combining digital change with achieving sustainability goals is a great opportunity that can be realized in small steps:

Discuss for each new investment what contribution it can make to a sustainable company or product. Also take into account possible process changes.

Together with your employees, identify the areas where particularly large amounts of resources are wasted and work out solutions together.

Talk to your key customers about their sustainability agenda and draw conclusions for your strategic decisions.

Hang the United Nations Sustainability Goals in your offices and get your staff to discuss them. You can use workshops to sensitize employees to sustainability issues.

 

Dr. Alexander Bode