The understanding of how industrial activities affect nature and society has effectively led to groundbreaking business strategies like sustainability. Sustainability through digital transformation has become a major focus for small, medium, and large enterprises across different industries. This strategic approach underlies the idea that development can be a combination of technology and sustainable practices.

Digital transformation is not a new reality to many of us. Presently, business organizations are conscious and cautious about what impact they are leaving behind both environmentally and socially. Sustainability has become not only an environmental concern but also a responsibility to keep up. 22.8% of Fortune 500 corporations have aligned themselves with the SDG (Sustainable Development Goals) framework in their business operations.

So, what is holding you back?

We are here to decode what corporate sustainability stands for and how digital transformation drives sustainability.

The Core of Digital Transformation

Digital transformation is integrating digital technologies like devices, systems, and software into all the sections of a business and making it more efficient.

The future is digital, defining how we will live, work, and interact with each other. Whether technology becomes an empowering force for good or a sower of more division and exclusion will depend on the choices we make now.

– Achim Steiner, UNDP Administrator, First Regular Session of the UNDP Executive Board 2023.

Digital transformation for a long time now has transformed and accelerated the productivity of different enterprises, and also plays a crucial role in enhancing the progress toward achieving sustainability goals that have been established.

Now, let us dive into the genesis of digital transformation.

Industrial Revolution and the Onset of Digital Transformation

The Industrial Revolution paved the way for the digital transformation that reformed how businesses and most manufacturing industries work today. The Industrial Revolution back in the 18th century marked its beginning with Industry 1.0 (the first industrial revolution) followed by Industry 2.0 (the second industrial revolution). The development of mechanization in the manufacturing setup where the key transformations took place. Eventually, steam power transformed and strengthened the textile industry and new factories.

The second industrial revolution is marked by the invention of electricity and mass production in the manufacturing sector. It also showcased the rise of automobiles that drove the possibilities of transportation efficiency.

Following these important industrial eras came Industry 3.0 (the third industrial revolution) and Industry 4.0 (the fourth industrial revolution).

Industry 3.0 and Industry 4.0

The onset of digital marketing can be traced back to the era of Industry 3.0 which further developed into Industry 4.0. Digital transformation has come a long way since the Third Industrial Revolution, popularly known as the Digital Revolution, and it is marked by the development of computers, telecommunication systems, and finally the internet.

Every industry and every organization will have to transform itself in the next few years. What is coming at us is bigger than the original internet, and you need to understand it, get on board with it, and figure out how to transform your business.

– Tim O’Reilly, Founder & CEO of O’Reilly Media.

Advanced solutions like automation and digitally integrating technologies revolutionized manufacturing, and service-based industries elevated the prominence of Industry 4.0. With such developments, parameters like efficiency, supply chain streamlining, and information technology gained emphasis. Today most industries resonate its success with this digital transformation.

Digitization has become synonymous with a strategy that summons success. Composed of the five fundamental components – Cyber-physical Systems, The Internet of Things, Big Data, Cloud Computing, and Artificial Intelligence, Industry 4.0 presents a drastic shift in the transformative ways industries and business organizations function. These solutions aid enterprises in becoming more smarter, consistent, and connected, and finally reach their peak efficiency.

Digitization within the fourth industrial revolution has given the following advances:

  • Smart Factories
  • Real-time Monitoring
  • Predictive Maintenance
  • Supply Chain Optimization
  • Remote Collaboration
  • Quality Control
  • Customization
  • Data Analytics
  • Cybersecurity
  • Sustainability

Digital systems and equipment have become ingrained into business dynamics that it is inevitable and hard to work without. Hence, the focus now shifts to how to leverage and leave no harmful effects sustainably. In the past three decades, sustainability has acquired a tremendous influence on ways in which digitalization has happened across the globe. However, certain gaps remain persistent for some sections of people. For example, those who lack resources like internet connectivity, affordable devices, or the skills where they can leverage these technologies. This is where sustainability comes into play.

Sustainability is a lot of things when it comes to digitization. It was, is, and will be one of the biggest challenges and concerns due to the effects that industrialization and globalization leave behind. Ironically, it is something that made all the developments possible. This being the reality, environmental degradation, reduction of carbon footprints, and zero emissions are some of the major pain points that are discussed in the corporate world.

Corporate Sustainability

In the business world, sustainability has grown to be a core practice, and it means more than just environmentalism and conservation. So, how can you measure sustainability in business practices?

Sustainability is no longer about doing less harm. It is about doing more good.

– Jochen Zeitz, President and CEO of Harley-Davidson.

Harvard Business School has given the following two parameters to measure sustainability.

  • The effect of business on the environment
  • The effect a business has on society

As major environmental concerns developed all over the globe, multinational companies and other influential enterprises incorporated sustainability into their daily core business operations. Predominantly this was achieved through the ongoing digital transformation that established machines, automation, machine learning, artificial intelligence, and much more, which transformed and upgraded all the business processes.

Digital transformation navigates sustainability in three dimensions – economic, social, and environmental. This is promoted through data-driven innovations that majorly cater to the impact of customer engagement. Areas where sustainability and digital transformation intersect are:

  • Increased efficiency
  • Innovation
  • Enhanced transparency
  • Cost-cutting
  • Paperless working environment
  • Increased productivity

Challenges in Achieving Business Sustainability

Any business transformation can be a difficult process. Bringing changes not only means changing the trajectory of the processes but also involves the complete change of the basic organizational settings, such as the systems having to be updated, and the workforce having to be trained for the new setup. Santa Fe Institute puts forward three issues that can arise when an organization takes steps to improve its environmental impacts:

  • Need help to understand the impact of any individual firm
  • Difficult to rank the environmental impacts of some activities
  • Response of economic agents to the changing incentives

What are the ways through which these issues can be overcome? According to Forbes, 90% of business establishments believe that sustainability is crucial, however, only 60% of these companies build sustainability strategies. Hence, developing sustainable business strategies is essential in figuring out how to deal with environmental degradation and social uplifting.

How to Create a More Sustainable Business Strategy?

When the focus is on inducing sustainability into business practices, the focus of the organization shifts to achieving performance efficiency, and simultaneously reducing the consumption of energy and other essential resources.

Most of the world ran on manual paper-based processes and email. Seeing reams of paper being printed and pushed around made me cry. I saw an urgent need to streamline processes and make them predictable. That is when I started Cavintek and embarked on the Digital Transformation journey. Cavintek’s Cflow has transformed a number of organizations in the journey towards a more sustainable planet. We have saved more than 10 million dollars in paper and print costs alone over the past 10 years for our customers.

Bhaskar Krishnamoorthy, Founder & CEO of Cavintek.

The following steps can be implemented in doing so:

1. Study the Problem and Determine the Organizational Objectives

For the induction of any organizational change, the first step is to assess and understand what sustainability means to the business. This will help to determine the sustainable objectives and practices accordingly.

2. Establish your Organizational Mission

Setting the objectives can give a clear-cut idea of the organization’s mission. The mission statement will define the values and the purpose of the service provided that incorporates sustainable practices.

3. Build your Sustainability Strategies

To initiate sustainable business practices, the organization has to have strategies that would align the business operations with it. Use the framework of the Triple Bottom Line. It is a business concept that states that business organizations have to assess their social and environmental impacts. The core aspects to be measured are profit, people, and the planet. This will give a good idea for developing effective and sustainable business strategies.

4. Implement the Strategies and Assess the Performance

The final step is the implementation of the developed strategies. Once the strategies are put into practice, it is ideal to determine the success rate of the implementation. Practicing this can provide the organization with tangible results that allow you to make necessary changes and adjustments, and march toward a successful establishment sustainable business culture.

Impactful Business Operations with Sustainability

Across the business world as of February 2022, around 4500 business organizations have become certified B Corps, that is, these companies go by the standards of social and environmental-centered processes, transparency, innovation, responsibilities, and accountability.

In the journey from the purpose to the performance result, there is scope for more and more sustainable business practices that can improve its environmental impact. A mission establishment and actionable plan create a great impact on the results that are obtained. Let us remember that sustainability is not simple but is never impossible.