How many times have you heard that Digital is changing everything? Digital is disrupting the way we do Business…..a lot right? But how many times have you heard that Digital is fundamental to the long term survival of our planet? A lot less perhaps?
I for one hadn’t considered this angle until just before the summer break. One of my Clients asked my opinion on ‘Sustainability’. And I thought to myself… Sustainability… that’s not really my thing… Sustainability is all that Corporate Social Responsibility stuff, right? Hemp Bags, Recycling and Cleaning products that don’t clean. I am Digital, Digital is my thing… Digital is all about Speed, Innovation, Efficiency… What does that have to do with sustainability? My Client asked me to think about it and come back with a point of view in the Autumn.
So over the holidays I set about trying to get up to speed on what Sustainability really meant, what the brightest and the best were doing and how this would apply to my Client’s business. Boy…was I in for a surprise.
I have to say the whole experience has been relatively life changing and there were some fundamental things that I learned:
Unless we radically change behavior our planet will not survive
Humans have exhausted a year’s supply of natural resources in eight months, Earth Overshoot Day 2016 landed on August 8, marking the date when humanity has exhausted nature’s budget for the year. For the rest of the year, we will maintain our ecological deficit by drawing down local resource stocks and accumulating carbon dioxide in the atmosphere. We will be operating in overshoot. According to Global Footprint Network which measures humanity’s demand for and supply of natural resources and ecological services
- The future depends on transformation
The only companies that will succeed in the future will be the ones which are able to disrupt the traditional linear revenue/resource relationship.
- New economic models are emerging & with high potential
Digital and Technology innovation has given us the ability to create a whole new economy – the Circular Economy.
- The coolest companies are built on sustainability
Their reason for existence goes beyond a mission that is purely financial stakeholder based. They have a higher purpose…Unilever, IKEA, Nike, Natura, Tesla to mention a few.
My chief sources were two books Green Giants by E. Frey Williams and The Circular Economy Advantage by Peter Lacy (both of which I highly recommend).
The whole thing about sustainable companies which makes them stand out as Frey Williams points out is that it’s about: ‘How companies earn their money and not how they spend it’.
In other words, companies might have a great CSR focus and they may be spending a lot of money on creating charitable works, but at the same time burning a whole lot of resources in the actual production of the product or delivery of their services.
Sustainable companies have changed the traditional ‘Cradle to Grave’ business model that has been the foundation of companies over the last century.
The idea is shifting towards a ‘Cradle to Cradle’ approach
Where it’s not about using resources to produce products which get used and then discarded by customers… it’s about understanding your products total impact on the planet, from the start, from Day One, from the design stage! So that Designers can understand how to make better choices right off the bat – like Nike’s Considered Design Initiative - a company-wide program that incorporates green principles into Nike's design guidelines to help the company create products with more environmentally friendly materials and fewer toxins and waste.
It’s about leveraging the opportunity to create new business models or cost savings. Not seeing Waste as Waste but being able to convert it into an opportunity.
For example Aptar Group a global producer in the Packaging industry who has an objective to become 100% Landfill free in it’s Production sites. This means that they are able to recycle/reuse at least 90% of the waste/energy produced during the production cycle. One example of how they are achieving this goal is with the set up of special energy converters, which reuse the steam produced in the production process to heat their offices.
It’s about not stopping, in terms of responsibility, once you have sold the product but instead, looking at ways to take responsibility and leverage the assets that your organization has created in two different ways:
- Leveraging unused assets or resources – The Sharing Economy, e.g. Car Sharing because 90% of the time cars are left unutilized.
- Recycling and incentivizing the recycling - For Example H&M who has launched their ‘Close the Loop Collection’ which reuses clothes returned their stores to create new collections.. The goal is for H&M to one day successfully reuse all textile fiber from a discarded garment.
So, what does Digital have to do with sustainable companies?
One central theme of the above is that there is a need to track items composite parts all the way through the Create, Use, Reuse or Discard cycle. Connecting Suppliers, Manufacturers, Distributors and Customers together along the lifecycle of a product and it’s integral parts. This is a task which would have been impossible 5 years ago. However the foundational technologies of Digital: Mobile, Social, IoT, Big Data and Cloud are making this possible today.
Digital does have a higher purpose and those who are taking advantage of Digital to create a sustainable business are also reaping the rewards. A report by CDP released in September 2014 showed that companies that outperform on sustainability metrics are more profitable and return better dividends to their shareholders.
The world’s most sustainable companies are also the world’s most innovative companies, and those who have embraced digital and technology not only to drive innovation but also to drive higher goals.
In a world that is desperately in need of ‘urgent thoughtfulness’ digital transformation can help drive a sustainable enterprise opening opportunities to ‘Cradle to Cradle’ thinking.
I thank my Client for opening my eyes to Sustainability, it has enriched my thinking and changed my perspective.
I have made some small changes myself. I am making a concerted effort to use water sparingly, to shop ‘Green’, not buy my kids ‘throw away’ toys and have even tried eco-friendly cleaning products... but you know, they still don’t work.