Revolutionising sustainability: 5 lessons learned from the digital era
Updated: Nov 22
“We’re at the early stages of a technology-led sustainability revolution, which has the scale of the industrial revolution, and the pace of the digital revolution.” – Al Gore
Our world is changing so fast, it’s predicted we’ll see as much change over the next 100 years as we have in the past 20,000. Industrialisation, globalisation, digitisation – all have contributed to reducing poverty and boosting economic growth in society over the last 50 years. But the practices upon which our society is built are unsustainable.
Our economy – and all of us who rely on it – is completely dependent on our biosphere, which is rapidly degrading; we currently consume resources equivalent to 1.6 earths per year.
Leading businesses view ESG issues as an opportunity well beyond risk reduction; they seek to fully integrate sustainability and equality into business strategies the same way they have done with digital technologies over the last few decades.
We’re on the precipice of a significant turning point. The sustainability revolution is here, and no industry will be exempt from its reach. Imminently, inaction will no longer be an option. And alarmingly, the pace of change is not likely to be as “slow” as it is now, ever again.
Evidence that attitudes are shifting
At the 21st COP meeting in Paris in 2015, hundreds of CEOs came out to support global, coordinated action on climate, already seeing the vast opportunity for taking the lead in the multi trillion-dollar clean economy.
Consumers today want to know that the products they buy are produced ethically and sustainably. When searching for a product online, people used the word ‘sustainable’ ten times more often in 2020 (compared to 2015), according to Google.
PwC estimates that sustainable investing will outnumber conventional funds and make up over half of all global assets by 2025.
Employees today want to work for companies that are purpose-driven; purpose is becoming a key factor in talent acquisition and retention.
Policy makers are starting to set regulations that will transform corporate behaviour in line with a more sustainable future, such as the EU’s Corporate Sustainability Reporting Directive (CSRD).
While a minority of business leaders understand the need to prioritise meeting these evolving values, far too many still haven’t grasped the level of urgency.
In other words, put succinctly by the Harvard Business Review, ‘business as usual will not save the planet’. Companies will be held accountable for their impacts, even if they can’t put a dollar value on them just yet.
History teaches us to anticipate disruption
History has proven time and time again that all business models will eventually be disrupted by something new and more relevant.
A report by Professor Connie Gersick conceptualises change as a ‘punctuated equilibrium’. In layman’s terms, history follows a pattern of long periods of stability (what we might term ‘business as usual’) where the existing systems prevent large-scale change, punctuated by shorter periods of revolutionary upheaval that completely transform the systems moving forward.
The pattern is like Everett Rogers’ S-curve diagram of innovation, which shows how paradigm shifts occur when new generations of technology, ideas or mindsets are adopted into mainstream society.
‘Cultural norms take a long time to move, but when many do, they can flip shockingly fast. Throughout history, big shifts in values – such as the abolition of slavery, civil rights, equality for women, marriage equality for the LGBTQ community, and now climate action and justice – happened suddenly it seemed… after forty years of intense work leading up to it’ (Net Positive).
We’re already seeing evidence of several categories being disrupted by sustainability trends; the past decade has seen exponential growth in areas like renewable energy, meat protein substitutes, and electric vehicles.
‘Plant-based meat could be a US$140 billion business by the end of this decade, and the retail nutrition and wellness market could grow to US$50 billion by 2025. The current market value of the plant-based beverage category (things like almond milk and coconut water) is US$13 billion and growing at 12% per year’ (World Economic Forum).
As with digital, sustainability is creating opportunities for the entrance of multibillion-dollar industries, disrupting historically ‘ESG unfriendly’ market segments. Alongside these developments, the investor community is waking up: the value of sustainable investment in global financial markets was $35.3 trillion in 2020, and has grown 15% in the two years since (Refinitiv).
The flow of capital and entrepreneurial activity will soon increase the pace of change to ‘blink and you’ll miss it’.
What can the digital revolution teach us?
With hindsight, there’s a lot that the digital revolution can teach us about the imminent sustainability revolution, and even the industrial revolution before that.
‘Remember in the early 2000s, when companies realised they needed to go digital, they would hire a web developer? They soon learned that was a woefully inadequate response to the enormous task at hand: the need to reshape their organisations, their products, their entire industries to meet the demands and opportunities of a digital economy. Something similar is happening today when the executive suite hires a sustainability expert to shepherd this transformation. It’s a start, but it barely begins the work needed to navigate the impending revolution.’ (World Economic Forum)
Going back even further, the industrial revolution points to the same tipping point. It took society more than 30 years to unleash the transformative power of electricity. Instead, businesses added it incrementally to existing processes, failing to realise the real efficiencies until much later.
“When factories built themselves for the electrical age, and around what electricity made possible, radical new changes were made… To work around the possibilities that a new technology made possible, rather than to add it to existing flows,” writes Tom Goodwin.
So what would happen if we rethought businesses around sustainable practices - what would that look like?
5 lessons from digital winners (and losers)
The digital winners have been those who are quick to adopt new technologies, rethinking business models and working around what is newly possible in a post-digital future.
The losers? You probably guessed it – nothing but business as usual. And they're heading toward a fate like Nokia and Blockbuster video.
The following lessons can all be equally applied in the shift to sustainability.
1. Act fast to capture opportunities, efficiencies, and new revenue streams
As our world becomes increasingly digital, companies who have embraced technological transformation from the start are already seeing observable results; they’re more efficient, they’re capturing new revenue streams, and they are more profitable and competitive.
A study on digital transformation maturity by MIT shows companies that have digitally transformed are 26% more profitable than their average industry competitors.
2. Work agile to respond rapidly to change
Digitally mature companies are also more resilient, able to respond faster to change and adapt to disruption, as highlighted by Deloitte in their Digital Transformation Executive Survey 2021.
It’s no surprise that the pandemic accelerated the adoption of digital tools among companies and consumers alike, as we all pivoted to the new normal.
3. Use new technologies to get a significant lead over competitors
The pace of tech advancement is causing a significant divide between the winners and the losers. Those who have made the proper technology investments upfront have outperformed their competitors in leaps and bounds.
“Digital mastery is more important than ever because the risks of falling behind are increasing. In 10 years of research, we have seen digital transformation grow increasingly complex, with a new wave of technological and competitive possibilities arriving before many companies mastered the first.” (MITSloan).
4. The leadership team gets it
Rather than clinging to traditional or outdated business methods because they are familiar, strong leadership will rally for change and the opportunities that come with it.
“The ability to envision and drive change is just as important as the ability to work with technology. If you don’t have both, you can’t succeed in this world,” says George Westerman, senior lecturer at MIT Sloan, who has studied ways in which some companies become ‘digital masters’ where others fall behind.
5. Be forward facing and ready for what’s next
With its origins as an online bookstore in 1995, Amazon quickly jumped at the chance to go digital. Today, data, AI and cloud-based software are the lifeblood of the trillion-dollar company – they’ve made the leap ‘from experimental bookstore to tech titan’.
On the flipside, Jim Keyes – CEO of Blockbuster Video circa 2008 - said (full of misguided confidence): “Redbox nor Netflix are even on the radar screen in terms of competition.”
Sustainable is the new digital
“Some business leaders still doubt that climate change is an existential threat, or that inequality and racism are embedded in our institutions. They may not believe that their employees, customers, and communities will demand that they work to solve these challenges. They may doom themselves to be laggards who don’t get it, and they will join the graveyard of businesses that did not see big shifts coming. They will be welcomed with open arms by the likes of Blockbuster, Sears, Enron, Lehman Brothers, and the fifty coal companies in the United States that have gone bankrupt in the last decade. They will miss the greatest business opportunity in history.”
Excerpt from Net Positive, Paul Polman and Andrew Winston |
Digital technologies have completely transformed operations across industries; for companies to stay relevant and be future fit, sustainability requires the same. The opportunities for those leading the way will be limitless.
Rogers’ S-curve diagram shows the point of ‘paradigm paralysis’, which is where many business leaders find themselves today; stuck in the old paradigm and not entirely sure how to progress into the next. It’s one of the reasons we are facing inaction and greenwashing rather than truly transformational change.
Ultimately, failure to stay ahead of the curve means failure to stay relevant and add value in a society that is going to evolve regardless. Corporate culture has to adapt alongside it.
And keeping the digital parallel in mind can be a useful reminder.
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