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When Digitalization Met Sustainability

Reading Time: 4 Minutes 10.05.2022 Currents & Trends

The good and bad sides of digitalization in the topic of sustainability

Digital transformation and sustainability are two fundamental elements of our world that couldn't be more different at first glance. As the strongest transformational power of the 21st century, it seemed as if digitalization was all about "faster, higher, farther", pushing sustainable behavior in the background. But this is exactly where the potential lies. Restructuring organizations, adjusting processes and tapping into new markets on a digital basis also promotes a more sustainable mindset and behavior.

How does digitalization affect the environment?

The good and bad sides of digital transformation

Positive aspects of digitalization arise where it helps to

  • save energy and reduce emissions,
  • preserve resources and
  • improve recycling.

Moreover, the digital transformation can leverage particular organizational areas:

  • Establishing decentralized energy systems in the course of the energy revolution
  • Optimizing production processes
  • Controlling supply chains

However, this is also where we find the negative environmental aspects. After all, digitalization is not virtual. It involves devices like smartphones, computers and communication channels that need energy and materials and produce carbon emissions.

Electronics also consist of many valuable if not critical raw materials that can't always be recycled. The disposal of old devices leads to electronic waste, which is one of the fastest growing waste categories and an environmental problem that still needs to be solved. Digitalization should therefore start an efficiency revolution to make things better and faster.

Does ecological mean more expensive?

One of the most persistent prejudices with regard to sustainability is the claim that acting ecologically always comes at a higher price. New technologies that are introduced to the market are usually more expensive than tried and tested models. Technical development never sleeps, though. The costs always decrease over time and this also applies to inventions with environmental focus. Here's an example: Renewable energies like solar and wind energy are now considered the cheapest options of power generation worldwide.

The classic "environmental protection" of the 80s and 90s, which was all about filtering out pollutants retroactively, has served its purpose. Today, ecology means avoiding pollution or waste altogether and saving resources, manpower and money in doing so. The following three big aspects should already be considered in the project planning:

  • Integrated environmental protection
  • Sustainable design
  • Ecological business models

The financial market is placing ever more importance on ecological acting since it is very sensitive to companies that can't prove their ecological behavior

What are recommended measures for companies?

Data, reorganization and low entry barriers are at the center of digitalization and sustainability in companies. Both aspects are mutually dependent here: If you promote the digital transformation in your own company, you almost always become more sustainable. And if you want to become more sustainable, you should recognize that digitalization is the solid basis for this.

Step 1: Enter and use data

Digital data improve the control of machines and plants and the flexibility of their operation, for example. This allows you to adjust loads as required. The overall efficiency of production is increased. For example, you can save up to 30 percent for machines that are optimally controlled. Digitalization is an important prerequisite for reading these data and converting them into best practices for your own company.

Step 2: Reorganize your company

If you want to become more sustainable, you should think in cycles. Recycling economy and remanufacturing are key here. The goal is to create more added value without having a negative impact on the environment, for example, by expanding the service portfolio or reaching a better economic performance while using the same quantity of material.

Business models like pay-per-use rely on the durability of products, opening up new markets for companies. The goal is to rent or lease machines, plants and goods instead of selling them. This helps to create even more added value and establish a long-term customer relationship. Moreover, the lessor always knows what's going on with their asset (for example, the machine) and what problems are likely to occur in the future. As part of predictive maintenance, they can be identified early on and counteracted even before they occur.

Step 3: Reduce entry barriers

Recommended digitalization measures and the related development of sustainability always depend on the size and structure of the company. In any case, it's important that you understand the digital transformation as a process and define the following aspects for yourself:

  • Where can I make internal processes more efficient or even automate them?
  • Where can I work with data?
  • Where can I establish new digital business models?

It's important to consider these questions soberly and be aware that all of our actions as humans have an ecological impact. We always have to make decisions and often enough it's quite impossible to find a solution that is 100% perfect. Consequently, you have to know and weigh the chances and risks in order to find the right balance between digitalization and sustainability. And you need to have the necessary composure to handle this process step by step.

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