BGT introduces Sustainable Digitalisation
- 01 Aug
BGT introduces Sustainable Digitalisation
Sustainability has been a key topic for years. It is evident that the supply of raw materials and the means of disposing of them are limited and that the way we use them can have a significant knock-on effect on the world around us. Traditional energy sources such as fossil fuels are becoming less attractive given their impact on CO2 and climate change. Gone also are the days when we only measured the impact in “green” values. In the past, we tended to consider green to mean caring for the environment but in the last few years this has been redefined and when talking about sustainability, we talk about economic and social benefits as well as the “traditional” environmental benefits. As a consequence, many companies and governments are now implementing comprehensive and demanding sustainability goals and policies that stretch far beyond the timeworn dogma of “green”.
New developments relate to the digitalisation of the economy through the application of technologies such as sensors, social networks, mobile, analytics, process, cloud and big data. At BORN Green Technologies we define this as “sustainable digitalisation”. We believe that this requires a new way of looking at how technology solutions are both sustainable and digital in nature and also how these link to a wide number of outcomes and – importantly – provide a way to help an organisation to achieve its goals. Connecting the dots between sustainability, digitalisation and goals is a new way to achieve environmental, economic and social outcomes that have not been considered in the past.
The Pillars of Sustainable Digitalisation
To elaborate on sustainable digitalisation, let’s consider the description from the 2005 World Summit on social development of the three main pillars of sustainability: environmental, economic and social. We will use this to continue to elaborate how BORN Green Technologies is using this way of thinking to achieve goals that all organisations have to address, be they customer intimacy, product (or service) leadership or operational excellence.
In the 1980s, environmental aspects of sustainability were the primary focus, with concerns about air pollution and acid rain. As time progressed and developments took place, discussions evolved to include other environmental aspects, such as water and other natural resources, biodiversity, clean energy, agriculture and food. Now the dominant theme in the area of environmental is climate change, as demonstrated at the COP21 event in Paris in late 2015, which resulted in an agreement between almost 200 nations, one of the biggest achievements ever to have been reached in this pillar.
As part of the transition towards the modern definition of “sustainability”, many people and organisations began questioning whether they should invest in environmental protection, not only from the perspective of outcomes relating to the environment, but also outcomes that would have a positive impact on revenue, costs and bottom-line performance. Unsurprisingly, it would be a lot easier to justify investments in sustainability if it became clear at all levels – from the board room down to the individual – that a link between sustainability and economic benefit exists. Over the last 10 years, this awareness has grown and today it is easier to appreciate. Introducing technologies to reduce energy consumption, for instance, not only reduces our need for energy but reduces CO2 emissions and results in lower costs.
In this context of large-scale projects such as Smart Cities and Smart Buildings, if we can apply digital technologies, we also open the door to some significant economic benefits simply by using our resources more effectively and more efficiently. We also need this type of transformation to help our society to overcome some of the latest economic predicaments and slowing growth cycles, no matter how small the benefits might seem. We can see support for these types of initiatives with many cities around the world now becoming “Smart”. Cities such as Zurich, Barcelona, Berlin, Amsterdam, Paris and Copenhagen are some of the many that have started the journey. At the corporate level, the equivalent is the “Smart Building”, which is becoming an item high on the list of what needs to be done to help secure the future success and operational excellence of the organisation.
Over the last few decades, companies have often focused on the direct economic aspects of sustainability through the minimisation of resources, for example, reducing energy consumption and thereby reducing costs, making any investment in sustainability justifiable. Today we face the challenge that sustainability is also necessary to ensure improvements in quality of life, by providing outcomes such as better collaboration, more time and all of this with less effort. Social benefits are equally essential to achieve sustainability, and the ability to achieve this through digitalisation is becoming clearer. However, those making the investment in the required long-term digital technologies are not necessarily those who will benefit from them. The social aspect of sustainability is becoming a key success factor and it will enable our society at large to achieve improved quality of life as outlined in the 2015 GeSI report “#SMARTer2030 ICT Solutions for 21st Century Challenges”.
Sustainability and Digitalisation
In recent years, a number of forecasts have been made as to how many connected devices there will be in the years ahead. Figures like 50 billion devices by 2020 have been referenced, with further growth towards 100 billion before 2030. Growth in data is another factor; we are no longer talking petabytes but exabytes. No matter how we manipulate the numbers, it is clear that we cannot disconnect sustainability from digitalisation, as technology is absolutely fundamental in achieving both. Reports on this subject are available, for example, the GeSI report mentioned above, which talks about having to disconnect the growth in technology from the footprint that it generates. This is becoming more and more achievable. We are now looking at a 1 to 9.7 ratio regarding the negative impact on sustainability from technology versus the positive impact. This factor is on the rise and will only increase over time as we find new and better ways to do things by applying technology even on a small scale.
Of course, one of the big waves before us is the Internet of Things, where we are looking to apply sensor technology in particular to make everything we do “smart” and “digital”. This applies to cities and buildings but also to processes, supply chains, harvesting, medical treatment etc. The list is long and continues to grow. We are still only on the cusp of seeing what will become possible in the future, but it is obvious that this shift will allow further optimisation and therefore further levels of improved sustainability.
The emergence of the Internet of Things will generate vast amounts of data that with the application of analytics and visualisation 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 behaviour, for example:
- improving forecasts of natural events or disasters
- optimising global agricultural production and food supply
- anticipating traffic congestion and managing low emission zones • limiting energy production to the exact needs of consumers
- discovering defects in or imminent failure of specific product components, allowing preventative and even pre-emptive maintenance to avoid failure or costly repair or 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 virtualisation, efficient hardware components and free air cooled data centres will help ensure minimal impact as the decoupling of technology and negative sustainability impact continues.
In most cases, there are tangible positive economic benefits to be gathered from sustainable approaches to business: less waste, less energy consumption, time savings, less capital required, faster return etc. For large companies engaging actively, there are additional consequences:
- They attract consumers who are motivated by environmental concerns • They limit the bottom-line impact of a rise in energy prices and environmental taxesThey can fine-tune demand by migrating towards an “as a service” model, where they only pay for what they get
- The “cloud” approach to IT service provision means that investment in new technologies and sustainable business processes does not have to be prohibitive. Solutions will be commoditised and commercial approaches driven by the consumer mentality of availability anywhere, anytime and “only pay for what you use”.
This is the field where the 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 services, are quite useful for creating new ways of collaborating
- An economy of sharing will rise through ad hoc social networks, encouraging further growth in the already established car sharing and apartment rental market (e.g. Airbnb). The car sharing solution Zipcar (acquired by Avis) highlights the environmental benefits of its services and at the same time positions its service as a new approach for travelling together, a model that has been known for many years here in Switzerland through the car sharing model promoted by the Swiss company Mobility
- 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
- The Mobility car sharing model is obviously a way to enhance availability and connectivity, but it brings many more sustainable benefits through providing contextual information that allows the right decision at the right moment. Users can take advantage of schedule optimisation and intelligent service provision delivered at the right place at the 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 a new era of citizen engagement
- Industry 4.0 is certainly a major breakthrough in delivering environmental benefits to industry and its supply chain. It will also be a major step towards the reinvention of work, as work becomes more collaborative and flexible. The workplace will adapt to specific and changing needs, with work increasingly becoming a thing we do rather than a place we go to
Finally, the digital revolution is also an opportunity for emerging countries to leapfrog the constraints that are all too common in the old world bound by convention. 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?
Linking Sustainable Digitalisation with Organisational Goals
Sustainable digitalisation connects also with organisational goals. McKinsey has defined three primary goals any organisation, public or private, should seek to achieve: customer intimacy, operational excellence and product leadership. There are many examples of how sustainable digitalisation connects with goals, but let’s just take a couple of examples. A new solution under development is known as the digital ceiling. The solution is about using the ceiling to power not just the IT infrastructure but also more traditional building infrastructure such as lighting. Not only will light bulbs in the future be powered by the IT network using “power over ethernet” (PoE), but those light bulbs will also contain sensors capturing data round light, air quality, humidity, temperature etc. Feeding this data into a building management system (BMS) and a “cloud” opens up a whole raft of opportunities to “optimise” the building. Subsequently, this optimisation will allow the organisation to reduce resource consumption, thereby achieving both economic and environmental outcomes.
There are also social outcomes associated with this solution. Lighting has a significant impact on people’s behaviour and wellbeing, and from this also impacts people’s productivity. From a goal perspective, this type of solution clearly supports “operational excellence”, as it allows the organisation to operate more efficiently. The connection between environmental, economic and social outcomes and their impact on organisational goals is pivotal and illustrates that sustainable digitalisation is not just about a small number of benefits, but actually affects many facets of how the organisation is managed and operated.
Another example of sustainable digitalisation is omni-channel retailing. To strengthen their relationship with customers, retailers are contemplating technology solutions that will allow their customers to get through their shops using their own smart phone to reduce the time they spend in the shop whilst being introduced to current special offers that may be of interest based on their profile – which is already known to the retailer thru apps, social network check-in, proximity in or outside the shop and online purchases. This is then also tied into a loyalty scheme that will allow the customer to gain more points towards future purchases. In this case, the benefits are of an environmental, economic and social nature. The solution allows the retailer to fundamentally improve the shopping experience and promote and potentially sell more products to the customer. It allows the customer to have a better experience while spending less time in the shop, as she or he is also given the option of choosing a “fast route” if time is limited. In other words, the sustainable digitalisation allows the retailer to offer a number of benefits to their customers that in turn enable the retailer to create a greater level of customer intimacy, or loyalty.
Sustainability and digitalisation are inextricably linked. Sustainability no longer means just environmental awareness, but is now a matter of environmental, economic and social benefits. It makes sense to talk about sustainability and profit in the same sentence. In the past, that was not the case. It is also important to consider outcomes more holistically; most of us are biased towards ideas such as energy savings, but we may be less used to thinking of collaboration and sharing as outcomes. How such outcomes empower an organisation to achieve some of its goals is a natural extension of sustainable digitalisation. Once organisations understand the link between sustainable digitalisation and organisational goals they will be quicker to adopt changes, gain a competitive edge and ultimately become more successful.
At BORN Green Technologies our solutions are focused around sustainable digitalisation with clearly defined and measurable results. We aim to make our clients become more effective and efficient in their use of resources and able to reap the benefits from what technology can do to drive sustainable performance and growth.