Digital Sustainability: How Technology Drives Sustainable Profitability

Sustainability has become a global priority that can no longer be ignored. Climate change, biodiversity loss, and the depletion of natural resources are issues that demand immediate and concrete action. According to the recent United Nations "Peoples’ Climate Vote", 80% of people globally want more decisive climate action from governments, and 64% believe companies must do more to address the climate crisis.
This growing desire for change is influencing institutional policies and business strategies worldwide. Sustainability is no longer just an academic topic or a subject discussed only at international conferences; it is now an essential component of the daily decisions made by companies, governments, and citizens.

In this context, technology plays a crucial role. Digitalization and technological innovation offer tools and solutions that can help reduce environmental impact and promote more sustainable practices. However, these technologies must be used responsibly and sustainably. It is not enough to adopt innovative solutions; they must be integrated into a broader sustainability framework that considers the entire life cycle of products and services. This is where Life Cycle Assessment (LCA) comes into play, an essential tool for evaluating and improving the sustainability of digital technologies.

The Impact of the IT Industry: the "Weight" of Digital Sustainability

The IT sector is one of the most innovative industries, but it also has a significant environmental impact. According to the European Union, the industry accounts for 5% to 9% of global electricity consumption. While this figure may seem alarming at first glance, the key point is that the IT industry is now essential for sustainable development and represents an indispensable lever. In an increasingly digitalized world, abandoning it is not an option, making a concrete commitment to maximize the sustainability of the IT sector is critical.

Tools like Life Cycle Assessment (LCA) become crucial in evaluating and reducing environmental impact throughout the entire life cycle of technological products, thus contributing to the Sustainable Development Goals of the ONU’s 2030 Agenda. Moreover, companies, while having profitability duties, must learn to balance these demands, finding harmony between sustainability and profitability.

Consumers: Awareness is Growing

Consumers are becoming increasingly aware of sustainability. A report by the IBM Institute for Business Value (IBV) reveals that 77% of consumers are making more sustainable choices, even for their homes. Additionally, 49% of respondents stated they are willing to pay, on average, 59% more for products that are branded as sustainable or socially responsible. This demonstrates that consumers are willing to invest more in products that respect the environment and communities.

Four Ways to Achieve Digital Sustainability While Protecting Profit

But how can companies balance sustainability and profit? The Net Positive approach, advocated by leaders like Paul Polman and Feike Sijbesma, asserts that sustainability not only drives profitability but can also lead to significant savings. Companies that adopt a circular and sustainable approach can benefit from greater operational efficiency, cost reduction, and improved brand reputation. Technology plays a key role in this context, facilitating and accelerating sustainability efforts.

1. Life Cycle Assessment (LCA)
   Using advanced Life Cycle Assessment (LCA) software can help companies identify areas for improvement and implement more sustainable solutions. By analyzing the entire life cycle of a product, from raw material extraction to disposal, companies can identify critical areas with the greatest environmental impact and take measures to reduce it. This not only helps decrease the ecological footprint but can also lead to process innovations that improve efficiency and reduce operational costs.
   
   
2. The Role of AI
   In addition, the adoption of automation technologies and artificial intelligence (AI) can optimize resource use and reduce waste. For example, advanced energy management systems can monitor and adjust energy consumption in real time, significantly reducing carbon emissions. Similarly, the use of machine learning algorithms can predict necessary equipment maintenance, avoiding sudden breakdowns and extending machinery life, further conserving resources.
   
   
3. Supply Chain Management
   Another example is the implementation of digital platforms for Supply Chain management. These tools can improve transparency and traceability throughout the supply chain, ensuring that the materials used are sourced sustainably and that suppliers meet environmental and social standards. This not only reduces sustainability-related risks but also enhances the company's reputation, improving transparency and attracting more conscientious consumers.
   
   
4. More Engagement Through IT
   Finally, companies can leverage digital technologies to engage consumers in their sustainability efforts. Advanced communication platforms can educate customers on how to use products more sustainably and encourage responsible behaviors. This not only strengthens customer relationships but also creates a community of supporters who share the company's values.

The Risk of Greenwashing

However, there is a risk that must not be underestimated: greenwashing. This occurs when companies exaggerate or falsify their sustainability commitments to attract environmentally-conscious consumers. This not only damages consumer trust but can also lead to significant financial repercussions. A study published in the California Management Review highlighted that the desire to profit from sustainability trends through deceptive advertising can be very harmful, both for consumers and for investments in socially responsible practices.

More Efficient but also More Responsible

In conclusion, digital sustainability is not just a passing trend but an urgent necessity and an extraordinary opportunity for companies to redefine their business models. The adoption of advanced technologies and methodologies like Life Cycle Assessment can transform the way companies operate, making them not only more efficient but also more responsible.

However, authenticity is crucial: companies must avoid the trap of greenwashing and make transparency and genuine commitment the pillars of their sustainability strategy, including digital sustainability. Only then can they earn and maintain consumer trust, attract ethical investments, and ultimately thrive in an increasingly sustainability-driven market.

At Avvale, we firmly believe that digital innovation and the circular economy represent the most effective tools for companies to achieve profitability and sustainability.

Discover our formula!