Sustainability and Digital Revolution: A Winning Combination
Sustainability has been a hot topic for a many years. It is increasingly evident that the supply of raw materials is limited and the way we use them can have significant knock on effect on the world around us: Traditional energy sources are getting more expensive as fossil fuel supplies become less certain; climate change and related natural disasters have global impact; and the scarcity of some raw materials is demanding new approaches to manufacturing. In response, many governments and companies are deploying comprehensive and demanding sustainability policies.
So what’s new? - The big news relates to the digitalization of the economy through the application of technologies sometimes referred to as SMAC (social, mobile, analytics, cloud). In Atos we also call it the “Third Digital Revolution”. Let’s see how this revolution links to and impacts sustainability, but first let’s have a reminder of the historical pillars of sustainability:
1. Pillars of sustainability
The following diagram, first launched at the 2005 World Summit on Social Development, continues to be a valid attempt to describe the three main components of sustainability: Environment, Economic and Social.
Initially – around the 1980s – environmental aspects of sustainability were the primary focus, with concerns about air pollution and acid rain. As time progressed, discussions evolved to include other environmental aspects such as water and other natural resources, biodiversity, clean energy, agriculture and food. Now the theme of Climate Change is perhaps the predominant concern.
After the first waves of euphoria, many people and organisations began questioning why they should invest in environmental protection that only served to increase costs and impact bottom line results. This attitude was reinforced by several economic crises and slowing economic cycles, with the result that companies and governments tended to focus on measures that could directly deliver lower costs or other financial benefits. This behaviour was further encouraged by government policies that enabled positive financial impacts for those that engaged in sustainable behaviours (e.g. by subsidies) or penalised non-sustainable activities through levies and taxation. We call these processes “economization of environmental/social aspects of sustainability”.
Whilst over the last few decades, companies have focused on the direct economic aspects of sustainability (e.g. minimization of energy consumption helps reduce costs and therefore generates ROI and profit), today we face the challenge that sustainability is needed to ensure on-going quality of life, but those who need to invest in the required long-term technologies, solutions and polices are not likely to be those that will be able to benefit from them. The social aspect of sustainability thinking becomes a key success factor for our planets longer term future wellbeing.
It is quite interesting to observe how sustainability initiatives and policies are increasingly accepted and supported by employees who are voluntarily expending unexpected levels of energy to support such initiatives. In return, they expect a level of social engagement by their employer and a commitment to creating a more sustainable working environment.
2. The Third Digital Revolution
The third digital revolution is happening at the beginning of the 21st century and will arguably create as much disruption and potential for change as the invention of writing around 3200 years BC; and the invention of printing in the sixteen century. We are already seeing a huge volume of data created by both social networks and Internet of objects (in fact it is predicted that every year we will create as much data as we have during the whole period since writing was invented). By 2018, we anticipate 4.5 Bn smartphones, 25 Bn connected objects and more than 1.5 Bn of us engaged in on-line Social Networks.
Smartphone applications, social networks and sensors will generate data which can be used to present additional value add services to users through using localization and context. With the consent of users, this data can be used by business partners to offer personalized and contextualized services back to the users. The associated business models are such that in many cases suppliers are willing to subsidize the required communication infrastructures and offer services free or at very low cost to the user. This gives rise to the Economy of Data: a nascent discipline based upon the theory of Multisided Market which will further fuel the Digitalization of the society - provided that users trust the Platform vendors and are willing to share data about themselves.
The Atos Scientific Community has summarized this thinking in its soon to be published Ascent Journey 2018 where we can recognize many aspects of Sustainability drivers and enablers:
Thinking and behavior related to Economic Sustainability is likely to progress significantly through the outworking of the third digital revolution. However, as we postulate in Journey 2018, there is likely to be a balance between agility and fragility: If sustainable practices are seen as value added business drivers they are likely to be widely embraced; If they are merely seen as a cost burden or a constraint to business and innovation, they will not only fail to live up to their potential, but may even hold back the emergence of new business models.
3. Digital and sustainability
If we now consider the rise of new digital technologies, we see they have the capability to significantly change the game in each sector of sustainability.
The emergence of the Internet of Everything (Connected Objects and people) will generate vast amounts of data that with the application of Analytics and visualization techniques will help us understand more about the way we interact with each other; with businesses; and with the world around us. Unlocking such insights will enable us to discover patterns for more sustainable behavior e.g.:
- improving forecasts of natural events or disasters
- optimizing global agricultural production and food supply
- anticipating traffic congestion and managing low emission zones
- limiting energy production up to the precise needs of consumers
- discovering defects in, or imminent failure of specific product components, allowing preventative maintenance that avoids failure and more costly repair / replacement.
Whilst it is clear that delivering such a connected world and managing the resulting data will in itself impose an environmental load, the rigorous application of so-called “Green IT” techniques like virtualization, efficient hardware components, free air cooled data centres, etc. will help ensure minimal impact.
In most cases, there are tangible positive economic benefits to be gleaned from sustainable approaches to business: Less waste, less energy consumption, time saved.
For large companies engaging actively, there are additional effects:
- they attract consumers who are motivated by environmental concerns
- they limit the “bottom-line” impact of the rising of energy price and environmental taxes
The “Cloud” approach to IT service provision means that investment in new technologies and sustainable business processes does not have to be prohibitive, with solutions being generally commoditized with commercial approaches driven by the consumer mentality of availability anywhere, anytime and “only pay for what you use”.
This is the field where Digital revolution will genuinely change the game, making possible a new model of society, based on sharing – a key principle of sustainability thinking.
- New economic models, where for instance sharing some of your personal data gives you access to free -or freemium- services, are quite useful for creating new ways of collaboration.
- Economy of sharing will rise through ad-hoc social networks, encouraging further growth in the already established car sharing and apartment rental market. It is interesting to observe how Blablacar, leader in car sharing, highlights the environmental benefits of its services and at the same time positions its service “new approach for travelling together”.
- Ethical projects, where there is generally limited funding for upfront investments, will be facilitated through crowdfunding: trust is needed but sustainability is generally a world of trust.
- Mobility is obviously a way to enhance availability and connectivity, but it brings many more sustainable benefits through providing contextual information which allows the right decision at the right moment. Users can take advantage of schedule optimization and intelligent service provision delivered right place, right time.
- Smart Cities, enhanced by mobility, social networks and connected objects, is not only an efficient way to manage a city and improve its environmental footprint, it also enables new era for citizen engagement.
- Industry 4.0 is certainly a major breakthrough in delivering environmental benefits to industry and its supply chain. It will be also a major step towards the “reinvention of work” as work becomes more collaborative, flexible and agile. The workplace will adapt to specific and changing needs with work increasingly becoming a thing we do rather than a place we go.
Finally, the digital revolution is also an opportunity for emerging countries to leapfrog the constraints that are all too common in the “legacy burdened” old world. But there is an underlying question: “how do we make sure they avoid similar mistakes to those made by the lead nations in the first industrial revolution?”
Sustainability challenges have been around for more than 10 years. The end of the economic crisis is not for tomorrow and we are entering a period of lower growth where investments for Sustainability are more difficult to finance than ever.
In the meantime the need for these investments is not disputed anymore when observing ecological disasters all over the world.
This is why we have proposed two years ago,in addition to the actions derived from our Corporate Sustainability Program, to intimately couple Sustainability and Economy when promoting Economic Sustainability which begins to be affordable thanks to the third digital revolution as a by-product of digitalization of Society and Business.