Environmental and social issues have become increasingly important both at operating and strategic levels. Businesses today must integrate sustainability within their strategies and this implementation should be supported by different managerial tools and digital technologies. The latter is central in supporting sustainability implementation and conversion, and therefore, the interaction between digitalization and sustainability can unlock higher potential.

With the advent of digitalization, the world has witnessed a significant transformation in different industries. The evolution of digital technology has brought tremendous benefits to society, but it has also harmed the environment, leading to a surge in energy consumption, greenhouse gas emissions, and waste generation.

However, the digital age has ushered in massive opportunities for industries to revolutionize their operations, as the potential of digitalization to drive sustainable manufacturing is immense. Industry 4.0 technologies can power new net-zero business models, enabling companies to operate more sustainably while maintaining profitability. For instance, AI-driven analytics can optimize energy consumption while reducing waste and emissions, and industrial IoT devices can monitor and manage resources more effectively, all this leading to significant environmental benefits. But such achievements are still too scarce.

In that respect, the leading global authority on the environment, the United Nations Environment Programme (UNEP), keeps pointing to some persistent issues:

- Environmental impact: The information and technology sector contributes nearly 4 per cent of global greenhouse gas emissions, a figure on par with the aviation industry.

- Carbon footprint: The energy sector is currently responsible for a staggering 40 per cent of carbon emissions worldwide, equivalent to 13.6 gigatons of carbon dioxide equivalent. This figure is expected to rise, driven in part by the increasing demand resulting from digitalization.

- E-waste: The world generates a staggering 50 million tonnes of electronic waste annually, with only a meagre 20 per cent of this e-waste being recycled.

- Dual impact of digitalization: While closing the digital divide by 2030 is a laudable goal, it is crucial to recognize that digital technologies can have counterproductive effects on the Sustainable Development Goals. This includes promoting consumption, exacerbating environmental impacts, deepening the digital divide, disrupting labour markets, and consolidating power among a select few over the majority. Balancing positive impacts with the mitigation of negative consequences is imperative for sustainable progress.

To navigate and overcome the challenges of our changing world, an integrated approach and comprehensive strategy aligning digital transformation with sustainability goals are paramount. Investing in green technologies, adopting circular economy principles, fostering innovation in sustainable practices, promoting responsible consumption and production, and ensuring that digitalization efforts contribute positively to the environment are essential parts of the puzzle.

A delicate balance

There should be a balance established between the need to cut emissions from the technology industry and the critical role that digital technologies play in economic and social progress - as well as in keeping the world connected in times of disaster. At The Dots, we believe that the application of digital technology necessitates a considered and forward looking approach to sustainability, one that recognizes and addresses its economic and social implications. Below are some principles for a digital-age sustainability strategy that we believe are in the best interests of all stakeholders:

- Analyze the types of activity, outcomes, as well as social, environmental, and economic impacts of the business to understand how your company's operations produce or destroy societal value.

- Rethink the usage and design of your products and services, and recognize conflicting objectives.

- Engage strategically with a broader set of stakeholders in your value chain.

- Create marketplaces based on circular economy concepts wherever possible.

- Develop the management knowledge required to drive these challenges in your company's operational activities.

- Teach personnel to become what may be referred to as implicit sustainability managers.

- Foster the development and use of technologies with sustainability considerations in mind, i.e. sustainability by design. This ensures that technological advancements prioritize ethical considerations and environmental sustainability throughout their lifecycle.

The synergy between digitalization and sustainability is a delicate balance that requires careful consideration and concerted efforts from industries, governments, and societies to overcome the challenges and fully realize its potential. Overall, integrating digitalization and sustainability is essential for creating a better world for ourselves and future generations. It is imperative to ensure that our societal progress, driven by technology, does not come at the expense of our planet, paving the way for a future where industrial development and environmental preservation go hand in hand.

Whatever approach you use in your firm, the solution must provide you with the breadth and depth of analysis necessary to effectively incorporate these factors into strategy development and decision making.