Sustainability is veering on becoming a business buzzword. Much like its predecessor, “digital transformation,” businesses of all sizes and shapes are talking about it and claiming they are doing it, but who actually is? And for those just starting, where should you focus and who can you trust to help get you there?
To start, sustainability is an issue that transcends businesses and their bottom lines. Global surface temperatures are the hottest they’ve been in over 2,000 years (NASA). We are approaching the 1.5℃ threshold at which scientists assert that ecosystems will start a chain reaction of collapse. At the same time, financial inequality is rising or staying stagnant on nearly every continent on earth (world inequality report). To top it all off, our global population grows by over 80 million people per year, calling on the industry to support its growth. Yet, how do we grow in a way that doesn’t deplete the natural resources required to survive or that supports a thriving natural environment along with a thriving economy?
This is the question that drives to the true meaning of sustainability.
Advancing the 3 pillars of sustainability through technology
The 3 Pillars of Sustainability
In a speech emphasizing the danger we are all in with regard to climate change, UN Secretary-General Antonio Guterres argues that, “Making peace with nature is the defining task of the 21st century. It must be the top, top priority for everyone, everywhere.” He asserted we must rethink our relationship with the planet and encourage practices that lead to a more sustainable future for humanity. (Source)
While many think of sustainability in the context of the environment, the term is defined by three pillars:
1. Society
2. Economy
3. Environment
These represent key areas where changes are necessary in order to ensure the longevity and health of the planet and humanity along with it.
These pillars are further detailed by 17 goals of the United Nations Department of Economic and Social Affairs (Source). These “are an urgent call for action by all countries - developed and developing - in a global partnership. They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.”
Because technology plays such a large role in realizing those goals, it also will play a positive - and critical - role in 107 of the 169 targets which underpin the 17 UN SDG goals. Kin + Carta is focused on using its connections and expertise to provide meaningful contributions in each pillar area.
Society
Sustainability’s part in this pillar is the advancement of socioeconomic equity. From our standpoint, there are two major areas where technology makes a difference in this space:
Include universal accessibility in the design of digital products. Design for everybody can greatly simplify many aspects of a digital product. It also gets ahead of regulatory trends surrounding digital accessibility, which mitigate legal risk.
Increase supply chain transparency. Customers increasingly want transparency around how your products affect the wellbeing of those involved in creating them as well as the sustainable sourcing of the resources required (across the entire value chain). Data is key to achieving this transparency. Technologies like blockchain play a role in validating and verifying sustainable sourcing and production practices. In addition, tech and data will also be fundamental to track emissions associated with the value chain (scope 3 emissions) and will likely play an even bigger role as companies look to take a more holistic approach to the environmental impact of their products.
Leading the pack here focuses on Scope 3 emissions, management of which heavily relies on digital, data, and transparency.
Economy
The Economy pillar ensures that businesses are profitable as well as balanced in terms of the environment and society. Without sustained profitability, companies cannot innovate and operate, which can have dramatic negative consequences to the economy. Ethical and sustained profit is the mechanism for companies to provide society with the products and services they need while not causing harm to the environment or the communities in which they operate.
Actually, sustainability is often profitable for businesses. According to a recent Nielsen report, for example, nearly half (48%) of U.S. consumers say they would definitely or probably change their buying habits to reduce their impact on the environment. These consumers are putting their dollars where their values are, spending $128.5 billion on sustainable fast-moving consumer goods (Source).
Sustainability investment is being seen less as a cost and more as an opportunity for business growth. Sustainability objectives are often aligned with other key business metrics like reducing the cost of production or meeting diversity targets. Focus on sustainability can also increase investor focus, result in healthier margins, increase market share, and reduce employee attrition.
Risk management is integral to a sustainable economy, and technology plays a significant role here. Using data, decision intelligence, and other forms of AI can help detect and mitigate several types of risks including:
- Physical risks of climate change. Eg. Using GSI data and other types of data can help predict and mitigate the risks of wildfires, rising sea levels, and temperature changes that threaten physical assets and supply chains.
- Transitional risks of climate change. Communicating progress on sustainability ambitions is absolutely necessary to maintain relevance in a market with shifting preferences.
- Reputational risk. Companies must follow through on their commitments to sustainability. For example, many companies reacted to the Paris accord and other regional, national, international regulations and UNSDGs by setting ambitious corporate goals. The time is coming to report back on these goals, and only the companies that understand the role of data to track performance and quantify their work will be in the position to avoid the reputation cost associated with failure to meet those goals. This is another instance where a robust data strategy separates leaders from laggards.
- Regulatory risk as requirements evolve to address sustainability. Regulations change frequently in a number of industries as regulators focus more finely on areas that impact sustainability. The right data strategy will allow a company to remain compliant even as the regulatory landscape shifts.
Environment
This is the most comprehensive pillar. Technology plays a major role in protecting the environment, both in the way it is applied and the way it is developed.
Technology can be applied in many ways to support resource efficiency across the value chain. One way of doing this is by using digital twins and supply chain data to drive insights around the greatest areas of opportunity for decarbonization and other forms of environmental sustainability.
Data reporting and transparency are critical to advance environmental sustainability. Ensuring that decarbonization happens at the rate it needs to (50% by 2030), inter-industry collaboration and intra-industry collaboration are needed. Carbon and other forms of resource data will need to be deployed in a way that industries and sectors all use the same data language.
As the world transitions to renewable forms of energy, companies are testing the flexibility of the energy grid. Data and AI play a significant role in balancing the demand response for our grids. Recently, we helped Uplight on its journey to reduce carbon emissions by 100 million metric tons over the next 5 years.
Effective data strategies underpin success in sustainability for the world’s corporations, and acceleration toward our goals includes other technologies. As a B Corp certified company, Kin + Carta is committed to upholding sustainability practices with our clients. To learn more about the numerous ways that technology can move your business more quickly toward sustainable operations, you can download our digital sustainability report. We’ll also be attending this year’s COP26 event and speaking at a leadership summit on how digital transformation can create a framework for businesses to help reduce inequalities.