Environmental technology concept. Sustainable Development Goals. SDGs.
The threat of climate change has pushed companies to embrace a more sustainable future, and an increasing number of companies are announcing their commitment to ESG and sustainability. But such commitments need to be backed up by concrete action, and more and more are coming calls for harnessing digital technologies for a better and greener futurewith an emphasis on the potential of data for sustainable development.
Bringing digital technologies and sustainability together makes sense. The green transition and the digital transition have been two of the most important global business trends of recent years, and its dual challenges: one cannot succeed without the other. In practice, digitization is increasingly seen by companies as a way to improve environmental performance with companies such as Mercedes Benz And Analog devices announcing their commitment to sustainability using digital.
And now a recent study provides empirical evidence to support the relationship between the two trends. a recent article by Prof. David Bendig and colleagues highlights a strong positive relationship between companies that strategically prioritize digital technologies and their environmental performance
Digital orientation and environmental performance
According to Bendig and colleagues, companies with a strong strategic focus on digital technologies typically have a greater ability to adapt to changing market conditions and identify and capitalize on opportunities for innovation. Such companies are also typically more efficient in their use of resources, leading to lower costs and less impact on the environment.
Take the software company Teradata Corporation, one of the companies selected for their sample. In their 2021 ESG report, Teradata is committed to developing technology products and services for a sustainable future. It has also committed to using digital video conferencing tools and virtual workplaces for its employees to achieve environmental goals such as resource efficiency. Likewise a computer software production company Seagate and offshore oil drilling company Schlumberger, are committed to using new data-driven technologies and digital solutions to reduce greenhouse gas emissions and resource wastage in their operations. These initiatives indicate a digital orientation of these companies that was also accompanied by an improvement in their environmental performance over the period under review.
“We propose that managers can improve their company’s environmental performance and competitiveness by increasing the level of strategic digital orientation within their organizations,” explains Bendig. Developing one strategic digital orientation consists of developing technologies, features and functionalities that meet customer needs; developing digital capabilities within the company; coordinating a digital ecosystem and having a digital architecture configuration.
In this respect, the study also reveals important implications for policymakers seeking to promote sustainable growth. Bendig recommends: “If we want companies to embrace digitalization and reduce their impact on the environment, we need to give them a strong incentive. That is why policymakers should consider offering subsidies or tax credits to companies that invest in proven green technologies.” With the right policies, a thriving ecosystem of environmentally conscious companies can emerge, pointing the way to a sustainable future.
Positive domino effects for society
In addition to the direct benefits for businesses, this shift to digital preservation can also have positive knock-on effects for society as a whole. As companies become more sustainable and efficient, they can also develop new business models and products that encourage consumers to reduce their impact on the environment, leading to a more sustainable future for all. Furthermore, prioritizing digital sustainability enables companies to catalyze positive change in their wider ecosystems, reduce the environmental impact of their entire value chain and ultimately contribute to a sustainable future for all.
Digital technologies and data have the potential to be powerful tools in the fight against climate change and the transition to a more sustainable future. By prioritizing digital orientation and sustainability, companies can not only improve their own business results, but also contribute to a better future for society as a whole.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.