Sustainability transformation: a handful of statistics

According to a survey done by Morgan Stanley, 77% of global individual investors have expressed interest in sustainability investing and 57% claim that the past two years their interest in sustainable investment has grown (2024).

Environmental, Social, and Governance (ESG) investment was created to influence investing based on criteria with a focus on sustainability. ESGs focuses on three main categories: environment, social, and governance.

• Environmental criteria focuses on usage of natural resources and policies that promote climate resilience.
• Social criteria focuses on the relationships between the company and its stakeholders, such as customers and employees.
• Governance criteria focuses on how ethical the leadership of the company in the levels of transparency and accountability to shareholders.

ESGs began to gain popularity in recent years alongside the demand for sustainability efforts.

In 2015, the United Nations developed 17 Sustainable Development Goals that invite non-state actors, such as businesses, to implement in their business models. Many SDGs go hand-in-hand with the goals of ESGs as both have a focus on sustainability.

Governments have also taken initiative towards sustainability transformation by passing laws that promote sustainable practices. For example, the European Commission adopted a proposal that was recently approved by the Council of the European Union.

The proposal was a Directive on corporate sustainability due diligence, giving large corporations an obligation to implement changes that will align with the goals of the Paris Agreement and European Climate Law.

Digital transformation and sustainability efforts: bridging digital progress with sustainable futures

The call for sustainability by stakeholders and the rise of digital transformation has led to companies combining both objectives into sustainability transformation. Combining ESG and digital transformation in business, influences companies to take on.

In 2022, Accenture collaborating with the World Economic Forum revealed in their analysis that up to 20% of greenhouse gas emissions can be eliminated with the implementation of digital technologies.

To measure digital transformation progress, using metrics such as KPIs (Key Performance Indicators) monitoring satisfaction rates, hours saved, and other non-financial success indicators.

When implementing sustainable practices into digital transformation, KPIs change to take on a sustainable approach such as reduction in emissions and increases in clean energy usage.

Read more about digital transformation:

• Digital transformation in manufacturing: preparing for the future of work in the industry
• Why digital transformation is important (and its impact on IT departments)
• 5 key insights from the Digital Transformation in Insurance Press Roundtable

Optimizing energy consumption with AI-driven smart solutions in business strategy

Many companies with digital transformation use artificial intelligence to optimize their business model such as Starbucks and McDonald’s. Using AI within a business strategy gives companies a competitive advantage in sustainability transformation.

Having AI programmed to have a focus on sustainability, can lead to new business models that optimize use of energy throughout the value chain. Other than providing solutions to current issues such as energy and resource consumption, AI can provide insights to potential issues with key areas of a business based on the data it is provided with.

Daniel Jeavons is the Vice-President for Digitalization and Computation Science at Shell, one of the leading companies in the fossil fuel industry. In his article, Jeavons wrote that Shell with the use of AI, Shell could reduce 130,000 tons of annual emissions by changing current operations to one of their LNG plants.

He also believes that AI and other data solutions will help employees optimize operational efficiency as the technology can improve preparedness of a company’s future actions from analyzing data.

Reducing carbon footprint with digital innovations

Digital transformation allows businesses to consume less natural resources throughout its business processes. Reducing a company’s carbon footprint is a very important sustainability goal as greenhouse gas emissions has a large negative impact to the environment.

In a 2024 analysis by InfluenceMap, research shows that since the Paris Agreement, more than half of the companies (58 out of 100) were linked to having higher emissions.

A collaboration between digital services and an environmental consciousness should be something of high priority when companies are considering how to build a digital transformation strategy.

Companies can also consider the benefits of a digital acceleration strategy for their business. Benefits include resource optimization, one of many strategic goals for sustainability.

However, to accelerate progress on digital transformation without a detailed plan may bring negative consequences. Insufficient planning is one of many reasons companies experience digital transformation pitfalls.

Failing to reach their sustainable goals with digital transformation may cause delays in using sustainable digital solutions, preventing the reduction to the company’s carbon footprint.

Virtual Reality (VR) and Augmented Reality (AR): reducing the need for physical prototypes

Virtual Reality (VR) creates an environment apart from the real world, giving users a complete experience. Use of VR technology can allow employees to create simulations that give developers an idea of how users would interact with the product and bring awareness to any future potential issues.

Augmented Reality (AR) allows users to interact with the real world and virtual objects simultaneously. AR can assist in a company’s ability to reduce its demand for physical prototypes by creating the prototype virtually with AR. Employees can review the virtual prototype with the real world through AR, providing a similar experience to how physical prototypes have traditionally been examined.

Since COVID-19, Nestlé has used AR in their factories to provide support remotely. With AR, support can be given without having to travel to the site, as the digital services allows specialists to review task as if they were there in person.

The implementation of AR increases operational efficiency as time and money is saved from traveling while virtually completing tasks at a faster rate. It also helps the company cut down on carbon emissions and supporting Nestlé’s goal of achieving net zero carbon emissions by 2050.

VR and AR help accelerate progress in the development stage as prototypes are created virtually and any changes are made automatically made online, saving resources.

IoT (Internet of Things) in conservation: monitoring and protecting natural ecosystems

Internet of Things (IoT) collects and exchanges data of connected technology in real-time. IoT can provide insight regarding the current situations of various natural ecosystems to specialists in real time.

Ecosystems can benefit from having IoT as specialists can receive notifications about level changes immediately when they happen. The instant notifications help specialists take immediate action and avoid potential damage to the ecosystem.

An example of how IoT can assist in the conservation of ecosystems is with the ocean. The ocean plays an important role in the world’s fight against climate change, as it becomes one of the first victims to negative changes.

According to IoT For All, IoT is implemented into smart buoys, underwater drones, and other technologies to collect and analyze data regarding the health of our oceans. NOAA Fisheries are also using IoT in the form of electronic monitoring, as seen in the image below.

With electronic monitoring, NOAA Fisheries are ensuring that their fishermen are following practices that are sustainable and collect data on fishing activities.

Another example of IoT protecting natural ecosystems is with protecting wildlife. The Connected Conservation Foundation helped create the largest IoT network in Africa that focuses on conservation of wildlife in Northern Kenya. The network will monitor the animals, workers, and natural resources listed in the image below.

Blockchain for transparent supply chains: tracing product lifecycle for ethical choices

For many industries, companies deliberately do not make their supply chains transparent to avoid criticism about their business model. In other instances, companies cannot be completely transparent about their supply chains because it has grown in complexity.

As the company experiences growth, suppliers will often outsource their work to smaller businesses without the knowledge of the company who receives the final product.

To increase transparency, companies are resorting to implementing the digital technology Blockchain into their business operations. Blockchain tracks and records transactions into data.

This technology can play a critical role in transparency within the supply chain, as recorded data cannot be altered without authorization. This new level of transparency of the supply chain exposes the ethicality of business models, abiding to some ESG factors.

It also allows investors to decide whether the actions of the company meet their business standards for ethics, ultimately deciding whether or not if they want to continue to invest.

And if the topic of blockchain interests you, see also our other articles on the subject:

• Blockchain, Britcoin and what they mean for insurance
• How do banks and financial intermediaries put their digitalisation strategy into practice with software solutions?
• A curse or a blessing? Busting myths about blockchain

Telehealth and e-medicine: catering to health needs while minimizing environmental impact

Traditionally, when one needed to seek medical attention, they would often have to seek transportation that would take them to nearest healthcare facility. However, during the COVID-19 pandemic, many people were stuck at home in lockdown and were unable to meet with their health care provider in-person.

This is when Telehealth and e-medicine began to experience an increase in usage as patients were receiving their health care through these platforms.

Telehealth and e-medicine allowed for patients to meet with their health care provider online from the comfort of their home. This helped minimize emissions coming from transportation to get to the healthcare facility.

According to the American Medical Association, researchers that Telehealth’s impact on reducing vehicle traffic and corresponding greenhouse gas emissions (CO2-eq) of patients has fallen 9.1 tonnes between 2019 and 2020. These statistics prove that these digital solutions that became wide known during COVID-19 created a positive impact on the environment.

Best practices for companies seeking a green digital transformation

As the future of ESG and digital transformation becomes more intertwined, companies will seek out practices that will help the business create a more sustainable future.

One of the best practices for companies wanting a green digital transformation, is to become more transparent with their customers about how they plan to achieve a more sustainable future. Businesses have already have set standards to follow through ESG factors. With digital transformation, actions such as the disclosure of business models will increase transparency between the companies and stakeholders.

Another practice is to obtain certifications that align with a company’s sustainability goals. As sustainability efforts become more of a demand, investors and consumers are no longer satisfied with companies stating their commitment to sustainability transformations.

Instead, they want the company to prove its efforts by having an outside party verify its ESG performance through certifications. Certifications are well-respected throughout different sectors as stakeholders are aware of the efforts companies have to take to have achieve the qualifications to receive a certification.

Some examples of certifications include:

• LEED Certification
• B Corporation
• ISO 14001
• Fair Trade Certification

If companies need guidance regarding how to develop a green digital transformation, they can choose a digital transformation company based on many factors.

Companies can select a firm to work with depending on their experience in sustainability transformation, past clientele of the firm, or their knowledge with technologies, among others. These consultants will advise the company on which practices and technology will help them achieve growth in their journey towards a more sustainable future.

Contact us and let’s work together to make your digital transformation green!