Given the wide range of issues facing global society at present, responding to environmental, social and governance issues (ESG) is becoming increasingly important for companies across all sectors and industries. One survey shows that 72% of CEOs feel sustainability is one of their top 10 priorities.
That figure is likely to grow further in the coming months and years, which is likely to drive more companies to go green. This responsibility became acutely clear at this year’s COP26 meeting, where world leaders signaled to global corporations that now is the time to commit to aligning their business strategies with sustainability targets.
In a recent survey by McKinsey – the global consulting business – a staggering 83% of C-suite executives and investment professionals surveyed stated a belief that ESG programs would generate significant business and shareholder value. These results were echoed in a similar report by Accenture, which found that companies with high ESG performance ratings enjoyed significantly higher operating margins than those with poor ESG performance.
With these insights in mind, it is clear that not only is there a strong moral case to be made for meeting, if not exceeding, sustainability targets, but the business case for this is equally clear. It is also important to remember that this lesson is equally applicable to those companies involved in physical production processes as it is to those with a largely digital footprint.
According to a report by the International Telecommunication Union and the World Benchmarking Alliance, technology companies have a significant environmental impact that must be reduced if we are to avoid the worst effects of climate change. This survey found that just 150 of the world’s leading companies consume 1.6% of global electricity production, which accounted for 239 million tonnes of operational GHG emissions.
A similar survey conducted by the UN found that the technology industry accounts for 2-3% of global emissions, with this finding carrying a warning that as more and more of the world comes online, this figure could climb significantly higher if immediate action is not taken. Regardless of the importance of this issue, however, the preliminary data on whether substantive improvements have been made remains mixed.
This is despite the efforts of certain companies such as GiG and its sustainability campaign, which has pioneered a movement within the iGaming sector towards sustainability. While progress is being made in the online gambling and betting sector, however, this is not necessarily true of other digital companies.
Can digital companies fight climate change?
Although it is clear that digital companies are responsible for producing emissions and thus have a responsibility to take action to reduce them, at the same time it is also true that some of the solutions to sustainability issues will themselves be digital.
In fact, according to a recent report by Accenture and the World Economic Forum, digital solutions can help to reduce global emissions by up to 20%. This reduction could be brought about in the three highest-emitting sectors – which include energy, materials and mobility – by 2050.
For this reason, digitalization has been identified as a key that will help us to unlock net-zero across a range of different industries.
Digital technologies can be used to measure and track the progress that is being made by particular organizations towards their sustainability goals, as well as to optimize the use of high emissions recourses, to reduce greenhouse gas emissions and to help find ways of creating a more circular economy.
Digital technologies can also be used to find new innovations and collaboration that will allow us to meet these goals. This might include the use of artificial intelligence, big data processing, additive manufacturing and the use of so-called ‘digital twins’. The internet of things might also allow for the monitoring and reduction of emissions, which could encompass sensors and data sharing platforms.
As the sustainability revolution expands and accelerates, the need to meet global targets will become increasingly pressing. This trend will force companies to reassess their operations and to find innovative solutions to continue operating in this new climate. In this context, digital technologies may just hold the solution.
An important part of achieving these goals will be investing in partnerships across different industries and sectors, engaging consumers and embedding sustainability into the fabric of how we do business. If we take heed of these imperatives, digital technologies can contribute to a greener, more sustainable future.