The new role of technology and innovation in business sustainability
New technologies, ideas, and policy approaches are providing multiple new business opportunities from sustainability. The new approach to sustainability is supported by an advanced communication framework that allows partnerships between business leaders, farmers, politicians and others to be scaled like never before. Through a combination of technology, innovations, and improved communication possibilities, taking practical action on sustainability issues is becoming increasingly cost-effective and providing new business opportunities.
The Fourth Industrial Revolution is a concept advanced by the World Economic Forum (WEF) describing rapid changes to the global economy being driven by advancements in technology, IoT, and AI. Fourth Wave Environmentalism is a sub-component of this revolution and is being advanced by the Environmental Defence Fund (EDF) as a transformative change in how business is approaching sustainability. Both concepts emphasise the role of technology, data, innovation, and progressive leaders in driving sustainability. Sustainability is being transformed from an appendage to regular business activities, into a strategic decision-making framework that can be used to streamline business actions.
Key technologies and innovations underpinning this new wave of sustainability include:
· Data analytics – transforming information into insights.
· IoT and Sensors – Remotely deriving and connecting data.
· AI – optimised efficiency gains and decision-making assistance.
· Blockchain – transparent and secure monitoring of data throughout value chains.
· Dematerialisation – reduction of material inputs throughout supply chains.
· Communication technology – the ability to share information and collaborate with others.
A survey in December 2017 survey of more than 500 top executives (vice president or above) at corporations with more than $500 million in revenue by the EDF provided some timely insights into how innovation is underpinning sustainability in major businesses. Of the new technologies and innovations listed above, data analytics was shown to be the most implemented innovation and was seen as having the biggest potential impact on an organization’s bottom line, environmental footprint and brand reputation.
The survey also provided insights into the reasons why businesses are compelled to adopt new technologies and innovations in their sustainability initiatives. Over three-quarters (77%) of business leaders found the potential to increase their bottom line, improve their brand’s reputation, or differentiate themselves from their competitors as extremely or very compelling reasons to implement a new technology with environmental benefits.
Until now, business sustainability efforts, particularly when related to certification or assurance, have tended to focus on data collection and analysis. At a corporate level, attention has been given to reporting sustainability progress, however, these reports have tended to be static snapshots of performance, formatted like a financial report, and not intended for widespread dissemination.
The new wave of sustainability does not replace existing data analysis and reporting practices, rather it ‘wraps’ these existing activities within a more strategic framework. Much more emphasis is placed on strategic considerations such as indicator materiality, and business objectives before sustainability data is gathered. Significant attention is also given to how sustainability performance is communicated in an appropriate way to relevant audiences. Throughout the new framework, different technologies are used to underpin sustainability initiatives, and enhance efficiency.
The United Nations Sustainable Development Goals (SDGs) are increasingly becoming a default reference point for business sustainability. Corporate Reporting: A Practical Guide, released in 2018, provides a nine-step process for how a business can assess its sustainability and report against the SDGs. It is notable that of the nine steps, five relate to strategic planning and decision-making activities, four relate to reporting and communication activities, and only one step encompasses collecting and analysing sustainability performance data. The new wave of sustainability recognises that strategic considerations and communication processes are essential components of sustainability. This represents a marked shift from earlier approaches to sustainability that focused primarily on the collection of data and de-emphasised strategic considerations and communication activities (illustrated in the figures below).
Having spent considerable effort developing sustainability indicators and metrics during the previous wave of business sustainability development, it is possible now to apply the lessons learned in this area, and shift efforts towards utilising new technologies and innovations now available to implement sustainability initiatives in a more efficient and action orientated manner. This requires using new technologies to underpin existing assessment systems and having a greater focus on strategy and communication concerns in business sustainability initiatives. The foundational work on business sustainability assessment has created a robust base upon which new technologies and innovations can be applied to further improve business outcomes and amplify socio-economic and environmental improvements.
The New Zealand Sustainability Dashboard Project has embraced the new wave of sustainability, and has applied big data analytics, interactive communication technologies, modular data gathering platforms, collaborative science driven assessment tools, and more to helping New Zealand enterprises achieve their sustainability goals.
For comments or questions, please contact Jay Whitehead.