Sustainability has taken on a heightened importance for global customers and investors and this shift was noted as part of the Gartner Top Strategic Technology Trends for 2023.
Gartner experts predict that by 2025, “50% of CIOs will have performance metrics tied to the sustainability of the IT organization” and that, “75% of executives will be responsible for sustainable technology outcomes” (Gartner).
However, for many businesses, taking steps toward sustainability is a complex challenge, one that seemingly rubs shoulders with efforts to make Digital Transformation a reality. In this way, sustainability represents something than simply aiming to reduce co2 emissions or achieve energy efficiency. It asks us to reconsider our growth strategies, considering how new technologies can assist in creating sustainable business outcomes.
We’ll take time in this article to discuss what it means to balance sustainability with organizational objectives. Further, we’ll consider what this push means for the manufacturing sector and how businesses can make sustainability efforts part of their great Digital Transformation strategy.
What is Sustainable Technology?
Sustainable and environmentally friendly technology refers to goods produced or services rendered with an awareness of the ethical and environmental costs associated with their creation, usage, and disposal. More than just whether or not technology is called sustainable, organizations should focus on how to use technology to enable sustainable outcomes.
The goal is to shift current practices and create a sustainable product that drastically reduces a company’s carbon footprint by minimizing environmental and ecological risks.
Sustainability in technologies are defined in a few distinct ways:
- Substitution – Technology that fosters a shift from non-biodegradable to biodegradable materials in its production. It also replaces non-renewable raw materials with renewable resources.
- Prevention – Sustainable tech prevents deterioration, contamination, and other negative environmental impacts through its use or production.
- Efficiency – The technology is efficient in terms of its use of energy and resources, potential reducing and waste simultaneously.
Sustainability Defined by Gartner
Reducing your company’s carbon footprint is an effort that should extend beyond attempts to reduce carbon emissions. Rather, business should consider how sustainability factors into ongoing investments in technology and enterprise functions alike.
As part of the their 2023 trends, Gartner experts note that sustainable technology will incorporate both well-established and leading-edge technologies. There are general notes about what Gartner adds further descriptions for sustainable technology (Gartner):
- Sustainable technology as a framework of digital solutions can enable environmental, social and governance (ESG) outcomes for the enterprise and its customers.
- Thinking only about the sustainability of IT itself is only one imperative.
- Also, consider which technology investments will drive sustainability in enterprise and customer operations.
What is Sustainable Manufacturing?
Sustainable technology often requires significant investment during initial phases, and this naturally creates a barrier to the achievement of sustainability objects. In the 2014 report Profits With Purpose, McKinsey uncovers that almost half (48 percent) of survey participants admit that the pressure of short-term earnings performance is at odds with sustainability initiatives. This is still the case in many companies, and the manufacturing sector is no exception.
Any new technology faces challenges as in adoption into manufacturing environments and often requires significant effort to achieve true integration. However, companies across business sectors who adopt ESG protocols consistently outperform their competition (World Economic Forum).
Any sustainability measure should be considered a long term investment. However, steps taken toward sustainability do not need to be thought as a separate path from investments in digital transformation. The same innovations companies rely to enable digital practices can often serve as the groundwork for sustainable frameworks.
An excellent example of this is industrial logistic where missteps in on-site load and unload actions can lead to greater down time and heightened carbon emissions. Building an integrated supply chain through the use of IIoT (Industrial Internet of Things) sensors and artificial intelligence can help optimize actions while saving time and money. Likewise, these same tools can drastically improve Overall Equipment Effectiveness, leading to more efficient production lines marked by reduced waste and higher quality output.
For these reasons, the push for sustainability should not be viewed as threat to your manufacturing operation’s future, but as call to take necessary steps to modernize plant and enterprise operations.
Examples of Sustainable Technology
The next challenge in implementing sustainability initiatives is deciding which technologies will have the most impact. The need for technology that can be produced, utilized, repaired, and disposed of without harming the environment or the people involved is more important than ever. Understanding how these technologies connect to current transformation efforts helps to break down the larger goals into achievable steps.
Common examples of popular sustainable technology and innovations include things like self-sufficient LED lighting fixtures and buildings, electric transport, solar power, or carbon capture and storage technologies. Other examples of processes that enable sustainable outcomes include enabling transparency on sourcing and trade practices, improved energy and material efficiency, reduced emissions and fair labor practices.
These technologies are not new, and many businesses have likely considered how they can be implemented into current operations. Nevertheless, often the best examples of successful sustainability practices come from companies that reconsider their current production processes.
In 2020, electronics manufacturer Fairphone saw the launch of the new Fairphone-3 that aimed to lower their greenhouse gas emissions. By reexamining current production practices and implementing new product design, Fairphone extended the phone’s life cycle to around five years, which led to projected reduced carbon emissions of 30% each year. Fairphone raised the quantity of sustainable materials that are incorporated into the supply chain for their new phones. About 40% of the collected cellphones were successfully recycled by the Fairphone 3+, which is made of post-consumer recycled plastics (Imaginovation).
While this serves as an excellent example of a dramatic shift toward sustainability, many companies may find it difficult to make similar changes to current production processes. In addition to the resources and energy used to construct the factories and manufacturing equipment, additional fossil fuel and resource use is necessary for manufacturing processes.
Major sustainability shifts do not need to me made all at once. The journey can begin by questioning existing process while looking for opportunities for sustainable outcomes. The challenge is high, but the rewards are substantial.
How Sustainable Technology Benefits Business Objectives
Sustainable technology serves customers by inviting new business models and technologically advanced products possible. Rather than shying away from the initial step, it is crucial that decision makers consider the substantial benefits sustainability technologies bring to business objectives.
- Reduce Risk and Improve Project Outcomes: Renewable or biodegradable materials …
- Improve bottom line: Sustainable companies maintain a competitive edge increasing operational efficiency while reducing costs and waste associated with production or enterprise functions.
- Competitive edge: Not only will heightened technology adoption build business viability and success, but long term investors are also more likely to work with businesses that have high ESG scores.
- Attract and retain Top Talent: Many sectors have been effective by the modern labor shortage and manufacturing is no exception. As new generations enter the work force, they will be more attracted to companies who contribute to positive change.
- Environmental and Social Responsibility: As environmental concerns take on greater importance, there are certain to be major shifts in regulatory requirements. Adopting sustainable technology not only prepares your business for these constraints but also serves to strengthen brand reputation and build public trust.
Building a Roadmap to Sustainability
Taking steps toward achieving ESG goals do not need to be separate from digital transformation efforts. To this end, Gartner notes several key technologies that advance ESG goals across business functions (Gartner):
- Automation to reduce resource-intensive activities
- Artificial intelligence (AI) and natural language processing to predict the impact of climate on business
- Advanced analytics to capture real-time performance analysis
- Cloud to transform processes and enable remote work
Effectively supporting transitions to sustainable corporate operations means determining and prioritizing technology investments that can advance those activities most crucial to the organization’s sustainability plan.
The following examples represent important technology investments that aid companies in achieving sustainable outcomes:
- Cloud Services: The flexibility of cloud service models mean that organizations can utilize the resources they actually need. This increases the usage of shared resources and has a positive impact on the environment.
- GHG management software: These platforms make it easier to gather, analyze, and report data on past, present, and future emissions across all three scopes (direct, indirect and nonspecific emissions). These solutions aid companies by giving them tools to fulfill reporting requirements, providing insights to improve emissions performance, aid in planning or forecasting, and optimizing the portfolio initiatives.
- Artificial Intelligence: AI can optimize operations and challenging procedures, helping to construct and run models with the lowest carbon footprint without compromising bottom line objectives.
- Supplier Sustainability Applications: As part of a broader effort to create supply chain transparency, these applications help companies collect and assess the ESG performance of suppliers.
- Supply Chain Blockchain: This serves as a digital means of automating the protection, verification, and record transactions. This not only improve business function but can be used to ensure ethical sourcing.