Driving sustainable growth: from tech adoption to fostering an ESG culture | HCLTech

Driving sustainable growth: from tech adoption to fostering an ESG culture

Sustainability should now be a business-critical mission for all organizations. This article will explore how businesses can succeed in their sustainability agendas
10 min. read
Nicholas Ismail
Nicholas Ismail
Global Head of Brand Journalism, HCLTech
10 min. read
How to drive sustainable growth

As the damaging effects of human-induced climate change become more prevalent, the world must heed the warnings of COP26 and embrace sustainable initiatives, both in the public and private sectors.

To do this, global businesses and public sector organizations can adopt next-generation technologies, such as AI, Intelligent Automation and 5G to achieve their sustainability goals.

Organizations must bake ESG practices into their culture and shift their business strategies and priorities to focus on sustainable growth. For example, when developing products and solutions, sustainability needs to be kept in mind from the design stage, just as security now is.

From a business success perspective, a strong sustainability agenda is now imperative to retain and acquire customers and employees.

This article will explore the biggest technology trends driving sustainability, the need to shift to a forward-looking product development strategy and how to foster a culture that champions ESG (Environment, Social and Governance).

Driving sustainability through technology

Sustainable growth and innovation can be achieved by embedding digital technologies into business operations. This can be taken a step further by ingraining sustainable initiatives into digital products and solutions.

There are a range of technologies that can be deployed to help drive sustainability:

  1. Artificial intelligence (AI)
    According to research published in Nature, AI could help organizations achieve 79% of their sustainability goals.
    Across a range of applications, from increasing efficiency in traffic management for urban mobility and optimizing farming irrigation for crop needs to curbing data centre emissions, AI can help reduce energy consumption significantly, while helping develop future renewable solutions.
    As an example of AI in action, Google’s DeepMind used its AI framework to reduce the amount of energy used for data centre cooling by 40%.
    The AI framework – made up of neural networks – achieved this by collecting data from the cooling sensors and electric equipment, before creating models that recommended a set of actions that once implemented, would reduce future energy consumption.
    With data centres predicted to account for 13% of global energy consumption by 2030, it’s important for organizations to embed these type of AI models into their own unique data centre operations, which will allow them to reduce their climate footprint without disrupting productivity.
  2. Intelligent Automation
    The World Economic Forum believes that Intelligent Automation – the collective use of AI, business process management (BPM) and robotic process automation (RPA) – is the foundation of future sustainable economies.
    Across industries and within the workplace, intelligent automation is crucial in helping streamline processes and in avoiding costly and environmentally negative disruption.
    In the manufacturing sector, for example, automation and digitisation can help companies work smarter and more efficiently with less waste and more quality, while reducing their carbon footprint.
    The journey can start with the automation of repetitive tasks that don’t require any decision-making through RPA, before moving onto the automation of more complex end-to-end processes and finally, identifying new areas that are ripe for automation – there are a lot of them.
    This practice will help supply chains avoid disruption by making decisions and recommendations in real-time, without the need for human intervention; saving time, money and energy, which will have a real impact on sustainability goals, as well digital transformation efforts.
  3. 5G
    5G – low latency, huge network capacity and new levels of speed – has the potential to greatly reduce the world’s global emissions. This is important for businesses and public sector organizations who now all have sustainability targets.
    The emerging network will allow businesses to streamline supply chain operations, access more data at speed and embrace emerging technologies and industries, such as autonomous cars, precision farming and smart energy grids, which will help reduce climate impact.
    5G will form the bedrock of the smart cities and smart industries of the future.

Sustainable product development

When designing a product, there are several key elements that must be built into the solution at the design stage of product development. This includes security, with the rise of cyber-attacks on connected devices, and ethics, with the problem of AI bias becoming more prevalent.

Sustainability should now be included in this list of essential elements baked into products at the design stage. What environmental impact will the product have over its lifespan? Can it be disposed off in an environmentally friendly way? Will it help reduce power consumption or increase it? These are all questions businesses should now ask and act on.

Business leaders should give both hardware and software product development teams the freedom to experiment in this relatively new area of sustainable design.

Overall, a collective mindset shift must be adopted to drive true sustainable growth. This includes deploying new digital technologies and embedding them into operations to reduce emissions and increase efficiencies, while ensuring that sustainability is built into products at the design stage.

The next step is to bake sustainability into an organization through an ESG cultural transformation.

Championing sustainability by fostering an ESG culture

ESG is now a critical part of an organization’s business strategy. ESG aims to champion sustainability, while focusing on improving the social and corporate governance shortcomings of a business, both internally and externally.

For larger organizations, where the wheels of change are slow to turn, fostering an ESG culture can be a challenge.

There are several steps that decision-makers can take to ensure their organization is positioned as an ESG leader, with a focus on driving sustainable growth, reducing inequalities in and outside of the workplace, and implementing an ethical corporate governance framework:

  1. Set goals and establish an ESG framework

    As with any business or IT project, it’s necessary to set goals and ambitions when embarking on an ESG cultural transformation. Identify; areas that can be improved immediately, key stakeholders to address, what success looks like, the challenges ahead and how sustainability will create value in a business.

    Once the ideas have been formalized it’s time to create an ESG framework or strategy that stakeholders and investors can buy into. The framework needs to set benchmark standards, hold individuals to account and ensure any compliance standards are followed.

  1. Create a budget and incorporate ESG into financial reporting

    The individual tasked with leading the ESG or sustainability drive will need to create a realistic budget that aligns with how a business prefers to finance initiatives. They should also understand the ROI tolerance and make clear that any financial returns may be unlikely in the short term. Instead, ask stakeholders to look forward at the bigger picture.

    Incorporating the impact of ESG initiatives into financial reporting will help ensure they are properly measured and understood throughout the business. To achieve this, finance departments should design a new way of accounting – one that shifts the focus from profit and includes the impact of ESG initiatives across the business supply chain.

  1. Build a team

    Of course, an ESG or sustainability team is needed to drive the cultural transformation required. The team can be comprised of internal employees or consultants, or anyone with a passion for ethical change. A decision should be made on whether to insource or outsource the ESG function.

    Most importantly, a senior executive is needed on the team, as well as representatives from each department, from a variety of positions. It’s a company-wide shift that should be led from the top down.

  1. Publicly report ESG policies, initiatives and metrics

    It’s important to focus on viable metrics, whether that’s diversity in recruitment or reducing GHG emissions, that can be measured and shared within the business to demonstrate the positive change brought about by those ESG-focused actions.

  1. Champion success

    Shout about success stories, work with communities and grow partnerships to embed ESG and sustainability into a business’ culture.

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