Digital Technology: Unlocking the commercial benefits of a Green Economy

New technology did not always herald a more sustainable future. The wave of inventions during the 19th century associated with the first industrial revolution has been blamed for accelerating the depletion of resources and pollution. The 20th century brought cars and planes, responsible for emitting greenhouse gases. In the 21st century, recently invented electronics are pilling up into mountains of e-waste in developing countries. It might seem like when it comes to protecting the environment, all this innovating is taking us in the wrong direction. Yet paradoxically, further technological developments might turn out to be the key to building a more sustainable future. While negative externalities are to some extent unavoidable, the world can collaborate to minimise them. Despite challenges, technology has the potential to transform businesses so that they can increase profits and decrease harm to the environment.

Crucially, digital technology can help us to understand the world better. New technologies allow businesses to gather unprecedented amounts of data, and then analyse it in meaningful ways. This links to the emergence of the so-called Big Data, characterised by the five V’s: Volume, Velocity, Veracity, Variety, and Value.

Technology has the potential to transform businesses so that they can increase profits and decrease harm to the environment

Nowadays millions of devices are connected by the Internet of Things (IoT), digital architecture which generates an explosion of data. The IoT facilitates a flow of information between various devices, and generates data on how consumers interact with their environment. The establishment of the IoT was accompanied by a massive increase in computing power at a low cost, which means that previously extremely expensive analysis is now feasible. Further, advanced analytics and machine learning are new tools that allow us to deal with data.

Hence, digital technology can be used to gather detailed information about a product life cycle, which then feeds into data-analytics. This means decision-makers can pinpoint which part of the business need to be transformed. Such transformations towards maximised sustainability can deliver both social impact and increased profits. The best example of this is energy efficiency.

There are two key problems with using too much energy. The first, connected to the environment, is that when the energy is non-renewable, it is a waste of precious resources. The second, connected to business profits, is that energy is expensive, and its excessive use drives up costs. Hence, a shift towards energy efficiency has both commercial and environmental incentives. Here is where digital technology can step in.

Smart lighting, which is in fact an IoT-driven technology, is a prime success story. In smart lighting, motion sensors are connected to the lighting system, resulting in lights turning off as we leave the room. This innovation has proven to be extremely successful. At Warwick, for example, newer accommodation halls have smart lighting systems in bathrooms. The effect of this is huge: according to IBM, daily operations (such as lighting) account for 70% of the total cost of a building over its lifespan. We all know that by turning off the lights as we leave the room we are “protecting the planet” — so why not have smart technology that automatically does this for us?

Innovative solutions can contribute to a more sustainable future

Such a win-win scenario is not a rarity. Research by the World Economic Forum shows that many of the private sector projects, including those driven by purely commercial incentives, address sustainable development goals. Notably, 84% of projects which deploy the Internet of Things — 70% of which were driven by the private sector — are addressing the SDGs. This shows that a data-driven culture can unlock the commercial benefits of a green economy.

Naturally, implementing new technology is not always straight forward and can have negative side-effects, also for the environment. Collaboration in technological innovations can minimise such harms: 2030Vision promotes a network of multi-sector partnerships that focus on using technology to deliver UN Sustainable Goals. This shows that while challenges lie ahead, innovative solutions can contribute to a more sustainable future.