Embracing Digital Transformation for a Sustainable Future

According to Dr Matt Bell, EY Global Climate Change and Sustainability Services Leader, sustainability – coupled with digital innovation – may well be the new key to unlocking the products and services of the future. 

“As customers increasingly realise the social and environmental impact of their purchases, they’re more willing than ever to find new ways to get the same benefit. Take the sharing economy, or media. The idea of us all stockpiling personal catalogues of music, movies, or games seems like a thing of the past – my own children tell me they don’t think they’ll own a car; they’ll simply use technology to have access to what they need on-demand.”

As the world enters an age of radical transparency and collaboration, digital innovation will also allow businesses and consumers alike to better understand the impact their decisions have on the world at large. “Businesses will respond by demonstrating in real time how their new models lead to regenerative outcomes, instead of the consumptive models of the past. Less linear and more circular business models will prevail with digital enablement that connects the once-distant silos of industry.

“By leveraging digital technologies themselves, companies will create more efficient processes, reduce waste, and develop new sustainable solutions. Predictive analytics will optimise resource use, and blockchain will reveal global supply chains, ensuring more ethical sourcing.”

Adopting digital technologies can reduce an organisation’s environmental footprint and promote social responsibility

As explained by Levent Ergin, Global Chief ESG Sustainability Strategist at Informatica, well-managed ESG data is becoming increasingly critical for every company looking to align its business model with ESG principles. 

He explains that to set measurable ESG goals, make positive progress and foster innovation in sustainable products and services, organisations need a complete and accurate picture of their ESG status and the underlying data. 

“Without this, they can’t make intelligent, data-driven decisions. Nor can they build a business model that aligns with ESG principles.” 

Digital technologies that get the data work behind ESG right ensure businesses serve the common good as well as their own bottom line. “For example, in the energy-hungry steel industry, Internet of Things (IoT) devices can collect real-time data on energy consumption and production processes, providing business leaders with insights that can be used to control and optimise energy use. While digital twins can be used to stimulate and optimise energy usage, reducing the need for physical testing and improving energy-intensive processes like blast furnaces and coke ovens.”

While much has been written on the growing environmental footprints from the rapid expansion of digital technologies like AI and IoT, Dr Bell highlights that this often overlooks the potential for decarbonisation and increased use of renewable energy sources as we move toward greater electrification. He suggests that while near-term adoption of AI may expand our environmental footprint, over time it has real potential to achieve Net Zero emissions, with major data centre players potentially locating facilities in areas with prevalent renewables.

“The counterbalance to the footprint conundrum is the potential that these technologies could have in rapidly advancing solutions for organisations seeking to more immediately address social and environmental challenges – thus could be pivotal in redefining an organisation’s resource management and social impacts,” he says. “By combining big data, AI, and space technologies, we’re already able to make decisions based on a better understanding of these risks today and make predictions on how interventions could address them.

“AI is likely to be pivotal in accelerating sustainability, but it’s critical that any technology is both environmentally responsible and adheres to ethical design principles. The potential benefits of AI are vast and can drive improved social and environmental outcomes. However, it’s important to remember that realising these benefits isn’t automatic – it requires intention. We need leaders who are responsible in their development and deployment of AI, and policies that ensure AI is used as a force for good.”

Digital transformation initiatives must be ethical, inclusive and aligned with ESG values

As digital transformation initiatives expand to incorporate generative AI, organisations have a responsibility to carefully consider the data used to train large language models. Firms need to ensure the models are trained on bias-free, inclusive data and that AI systems can account for diverse emotional responses. 

“For example, firms need to be mindful about whether large language models have been trained on bias-free, inclusive data or whether AI systems can account for a diverse range of emotional responses,” Ergin explains. “Ultimately, organisations will be judged on their ethics. So, any AI applications or models need to be designed, guided, and interpreted from a human perspective to remain in close alignment with ESG values.”

Dr Bell, meanwhile, emphasises the importance of an inclusive, diverse culture within digital transformation projects, not just for fairness but to align with wider sustainability goals and ensure everyone benefits.

“EY’s research indicates that a significant majority of businesses (69%) acknowledge the need for a deeper understanding of the risks associated with AI. We have been working with our clients to incorporate responsible AI practices, focusing on ethical considerations, security risks, and adherence to regulatory standards.

Reflecting years of AI experience, EY has established AI Principles emphasising Accountability, Data Protection and Transparency. “Organisations need to be actively collaborating with regulators to establish effective guidelines for AI,” he concludes, “ensuring that both innovation and governance are balanced.”

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