Lucy Klinkenberg-Matthews at Paragon argues that technology can be a double-edged sword and that business leaders must use it to promote sustainability whilst addressing its environmental impact
Balancing the benefits of technology with its environmental impact often leaves business leaders at a crossroads. On the one hand, they’re investing heavily in digitisation to improve operations and support efficiency across teams. On the other, they’re grappling with the environmental consequences of a tech-driven world. It leaves one question: how can businesses leverage technology to deliver efficiency while mitigating their environmental footprint?
Adding to this complexity, business leaders must also contend with digital fatigue among their workforce. To combat this and justify continued digitisation efforts, many organisations are highlighting the carbon reduction benefits of going digital.
While there’s a clear positive impact in going paperless and adopting digital operations, these advantages don’t negate the broader environmental issues associated with the ICT industry.
Technology’s growing environmental footprint
The ICT industry is responsible for 5% of all carbon emissions, and this is growing. In 2020, it consumed up to 6% of global energy – that’s equivalent to the entire pre-pandemic air travel industry. The use of digital and associated ICT is growing by about 11% annually, and we now have more than eight million data centres worldwide consuming growing amounts of energy every year. These numbers are alarming, and they’re set to increase as global demand for data continues to surge.
Technology can and should be a force for good. To ensure that, business leaders must recognise the environmental and social impacts of digitisation, beyond direct operations. This means considering both upstream and downstream impacts to avoid simply shifting the environmental burden elsewhere in the value chain.
Leveraging tech to deliver sustainability
Technology can be used to achieve sustainability within organisations, with data analytics and machine learning being great examples of that. These tools can help optimise operations and streamline processes, leading to reduced waste and resource consumption. Companies can use real-time data to make smarter decisions about energy use, logistics, and production schedules, and AI-powered predictive maintenance can also reduce equipment downtime, energy waste and resource consumption.
Most importantly, technology can inform decision-making. Open-source and paid-access data platforms are giving us unprecedented insights into carbon impacts, supplier status, and supply chain risks. But it’s not just about having the data. It’s about businesses using it ethically and considering the broader impact of their decisions.
Building on these foundations, technology also empowers us to raise awareness and educate others about sustainability. By leveraging digital platforms, organisations can effectively engage with customers, partners, and communities, fostering a shared commitment to environmental consciousness.
Another example is how the integration of renewable energy sources with smart grids and Internet of Things (IoT) devices can facilitate efficient energy management and help reduce greenhouse gas emissions. In practice, this could look like a smart building system that can automatically adjust energy use based on occupancy and weather conditions.
The role of leadership
Business leaders must actively recognise and address both the risks and opportunities that technology brings. While 92% of UK organisations see technology as key to achieving sustainability goals, less than one in five (19%) have fully integrated sustainability into their business strategies. Clearly, there’s still significant opportunity for improvement.
Sustainability must be embedded into their corporate strategies, not as an afterthought, but as a core principle. This means creating accountability and commitment at the highest levels of their organisations. By fostering a culture of innovation that prioritises sustainable solutions and developing metrics to measure environmental impact, businesses can harness technology to reduce their ecological footprint while driving growth and competitiveness.
Investment in sustainable technology
Investment in sustainable technology isn’t just good for the planet – it’s good for business. Leaders should channel resources into research and development focused on sustainable innovation. The companies that lead this will be the ones shaping the future of business.
Consider the example of Google, which has been carbon neutral since 2007 and aims to run entirely on carbon-free energy by 2030. Their investment in renewable energy and energy-efficient data centres not only reduces their carbon footprint but also sets a benchmark for the industry. Similarly, Microsoft has committed to becoming carbon negative by 2030, removing more carbon than it emits. These tech giants are not just making headlines; they are setting tangible examples of how sustainable investments can drive both environmental and business benefits.
Transparency about environmental impact and sustainability efforts is crucial for businesses. This means setting measurable goals and reporting on progress. The aim isn’t to appear perfect, but to show genuine commitment to improvement. By being transparent, leaders not only hold themselves accountable but also inspire others in their industry to follow suit.
The path forward
As we look to the future, it’s clear that technology will continue to play a crucial role in both business operations and sustainability efforts. The challenge for business leaders is to use its power responsibly.
Leaders need to be mindful of the environmental impact of their digital infrastructure while leveraging technology to drive sustainable solutions. They must invest in innovation that reduces carbon footprints and promotes circular economy principles. And above all, they need to lead by example, integrating sustainability into every aspect of their business strategy.
By embracing sustainable technology and addressing its environmental impact head-on, business leaders can create a future where business success and environmental stewardship go hand in hand. It’s not just about being good corporate citizens – it’s about ensuring the long-term viability of their businesses and our planet.
Lucy Klinkenberg-Matthews is Head of ESG at Paragon
Main image courtesy of iStockPhoto.com and WANAN YOSSINGKUM
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