Technology meets purpose - Digitalisation meets Sustainability
“We don’t pretend to have all the answers. What we do have are goals to strive for and a global community of businesses committed to doing the right thing for people and the planet”.
For many digital decision makers, IT entrepreneurs, and tech investors, this may sound like a stereotypical slogan used by climate activists. And it is - only that it is a quote from Lisa Jackson, who works for Apple as Vice President “Environment, Policy and Social Initiatives”.
Source: https://www.apple.com/environment/ (04.05.2021)
Quietly, quietly and secretly, in recent years the Cupertino group has begun to initiate the change to become a climate and sustainability pioneer. Many would not have trusted the consumer electronics and cloud giant to do this, as the entire industry still has the image of a global polluter with a huge appetite for resources.
But Apple has recognized the signs of our time and paved the way - in the coming decade, digitization and sustainability will go hand in hand. Only those who can convince their customers, partners and investors that they operate in a climate-neutral and resource-conserving manner will continue to grow and be profitable. Apple's cloud data centers are already operated CO2-neutrally, the products and supply chain should meet this requirement by 2030 - and they are working intensively on a 100% recycling quota for all products and materials.
Climate change and Covid - drivers for sustainability and purpose
But not only Apple takes climate protection seriously and proclaims innovations for climate-neutral business as a competitive advantage. A large number of global corporations have now set themselves clear emission targets and named a fixed point in time for achieving complete climate neutrality.
Volvo will stop building vehicles with internal combustion engines after 2030
SAP has strived for climate neutrality in its own business operations by 2025, but is well on the way to achieving this goal as early as 2023
Bosch achieved internal climate neutrality with its 400 locations worldwide as early as 2020
Google has been CO2-neutral since 2007, has neutralized its entire CO2 footprint since the company was founded in 2020 and has the ambitious goal of operating with 100% CO2-free energy by 2030
Deutsche Post DHL will expand its delivery fleet to 60% e-vehicles at 2030 - this corresponds to a total of over 80,000 e-vehicles
But not only climate and environmental protection has been important to the corporate executives for some time. Social responsibility for employees and ethical behavior towards partners and suppliers are also currently very popular. Microsoft subsidiary LinkedIN recently ordered its 15,000 employees a week of compulsory leave to prevent burnout and compensate for chronic weekend work. Some of the global investment banks are trying desperately and under high media pressure to change their “inhuman” and highly performance-oriented corporate and work culture. And the question of how to successfully make “diversity” part of the company's own DNA in order to benefit from mixed teams and creative diversity is also a concern of the company's bosses.
But where does the sudden change of heart come from? Why are ESG (Environmental, Social & Governance) and “Purpose” no longer “hygiene factors” and trending topics, but are the focus of the strategic debate and high on the CEO's agenda?
It’s the Environment, stupid! - Meaning as a new currency
Quite simply - because the world has changed! "It's the environment, stupid!" one could say. Customers, partners and employees are increasingly demanding more responsibility, ethical action and a clear corporate purpose. And this corporate purpose should go beyond pure shareholder value and make a clear contribution, e.g. to environmental or climate protection or other socially relevant goals. Many corporate leaders and ESG officers now focus on the UN's 13 development goals (SDGs - Sustainable Development Goals) when they present their long-term corporate goals.
But it is more than zeitgeist and trend screaming that leads the CEOs and supervisory boards to align their companies more long-term and sustainable:
Customers are increasingly demanding sustainable, climate-neutral and recyclable products and services and are willing to pay more for such products. “Green” and “climate neutral” are becoming the new premium labels that many companies and brands cannot do without today.
Global and EU-wide standards, laws and norms ensure ambitious and binding emission targets for many industries. After the US returns to the Paris Climate Agreement, these are likely to become more stringent in many important sales markets. In addition, there are specifications in other domains that expand and bindingly regulate the responsibility and liability of companies for their actions, such as the Supply Chain Act.
With rising prices for emission certificates and fluctuating energy prices, it is becoming increasingly lucrative for companies to reduce their energy consumption, avoid emissions and substitute fossil fuels with climate-neutral energy sources.
Investors have long since incorporated climate and sustainability criteria into their investment strategies and are increasingly aligning their portfolios accordingly. On the one hand, this applies to the stock market, where global players such as Blackrock or Allianz have clearly positioned themselves. “Climate-neutral” investments are among the growth segments in the fund business. On the other hand, investment decisions and company valuations by private equity and venture capital investors are more closely based on these criteria.
Last but not least, it is the employees and their long-term motivation, creativity and willingness to innovate that are important. Without a responsible and inclusive corporate culture, it becomes increasingly difficult to keep good employees and attract new talent - CEOs and their colleagues from HR departments also know this.
Simon Sinek's book “The Infinite Game: Strategies for Lasting Success” is warmly recommended for those who want to familiarize themselves with the subject.
Digital Purpose - How CIOs and IT companies are reinventing themselves
But what do CIOs and Chief Digital Officers (CDOs) and their IT service partners have to do with this topic? Aren't the colleagues from the ESG Office or Investor Relations primarily concerned with climate and purpose issues?
First of all, it has to be stated that everyone who is part of the management team of a company also bears responsibility for the implementation of climate targets and the “Company Purpose”. CIOs and CDOs would do well to review and revise their own IT and digital strategy with regard to these new corporate goals and specifications.
As digital innovators and change agents, CIOs and CDOs also play an important role when it comes to climate neutrality and purpose:
Data-Driven Architecture & AI: For more transparency with regard to energy efficiency and emissions or even the production conditions along the supply chain, data, software and intelligent analysis methods are required. This is the only way to automatically create energy balances that conform to standards and ensure compliance with the new supply chain law.
Cloud & Infrastructure-as-Code: With a highly automated and elastic cloud infrastructure in low-energy data centers and climate-neutral, certified cloud service providers, the CO2 footprint of your own IT as well as the company's own digital services and business models can be greatly reduced and a clear signal for set the transition to a climate-neutral company - even in industries that consume the majority of their energy in production.
Digital processes: The intelligent digitization and automation of core and service processes using process mining, AI, APIs and digital platforms contribute in many cases to greater efficiency and lower use of resources.
Innovation role model: In the context of digitization, corporate IT and digital units play an important role as role models and enablers - this also applies to climate and sustainability issues. Because many efficiency and innovation measures in the context of climate neutrality, circular economy, recycling or even diversity require software, data and communication tools in order to become reality and to develop their effectiveness. Without the involvement of IT, many climate and sustainability programs are doomed to fail.
Ultimately, CIOs and CDOs also benefit personally when they adapt their own leadership strategy and the target system for their managers and team leads to the new topics. Because even in IT, which has achieved tremendous achievements in recent years and especially in the Corona era, it is very good to have a meaningful and long-term perspective - and not to rush from one project milestone to the next!
Technology meets purpose.
We look forward to discussing this important topic with you and your approaches and ideas!
