The noticeable change in the climate shows us more and more clearly that our way of life has negative consequences for us. One thing is clear: In order for us all to have a chance at an ecological and social future, we need more sustainable management, writes Anela Bose in her guest article.
Spring has started almost three weeks earlier in Germany. We look forward to the sun. But actually it’s much too warm. One of the two most pressing challenges in our world is climate change. The second challenge is digitization. In Germany we have a lot of catching up to do on both issues. We have to solve both issues.
Digitization can contribute to more sustainability, for example by driving the circular economy or giving more people access to information and education. At the same time, digitization also harbors new challenges in terms of sustainability. For example, how much energy do blockchain solutions or bitcoin mining use? How ethical does the artificial intelligence of an autonomously driving car make decisions when, for example, two unavoidable accidents involving personal injury have to be weighed up?
Anela Boese has been a partner and managing director of beNIMBL, the digital advisory of the international Techedge Group, since July 2021. Previously, as Director E/E Connected Car at Dr. Ing. h.c. F. Porsche AG the development of the entire Car Connect product portfolio. Anela was internationally successful as co-founder and entrepreneur of the smart home start-up visiomatic.
Sustainability is not just limited to ecological aspects. It also includes the economic and social aspects. An economic part, for example, are so-called sharing economy business models, i.e. “use instead of ownership”. Renting out products instead of selling them is seen by more and more companies as a lucrative growth market. Digitization makes it possible.
Tesla is already planning not to sell any more cars in the future, but to rely on a subscription model for electric cars as soon as the vehicles are actually fully autonomous. The social perspective of sustainability takes into account aspects such as data protection, diversity, inclusion or the ethical authority of digital technologies. Only if we consider all three aspects of digitization will we become more sustainable overall and create a future worth living for ourselves.
Investors already consider sustainability aspects based on the criteria of a company’s Environmental Social Governance (ESG) to a much greater extent, in addition to their financial valuation factors, when deciding whether and how to invest in companies or not.
ESG criteria have therefore also become essential factors that must be taken into account in every corporate decision. In order to make ESG criteria internationally comparable, there are corporate environmental, social and governance balance sheet frameworks and standards, such as the German Sustainability Index, GRI or SASB. In practice, companies need to measure and report the environmental, social and governance aspects as well as their financial data. This report is called the non-financial report and from 2023 it will also be mandatory for non-capital market-oriented companies with more than 500 employees.
Reducing your carbon footprint is the biggest lever for companies looking to limit their environmental impact and this starts with monitoring carbon emissions. But how does that work?
According to a globally recognized standard for the measurement and management of greenhouse gas emissions, this is divided into three areas (scopes).
Information from which the quantities of scope 1 and scope 2 emissions can be derived is largely available in controlling. Electricity and fuel bills, for example, can be used to determine their consumption. The mathematical linking of this consumption with emission factors results in greenhouse gas emissions as so-called CO2 equivalents. Determining Scope 3 emissions, on the other hand, is much more difficult.
A high complexity of the value chain and often unavailable information from a company’s supply or distribution chain make it even more difficult to collect and correctly calculate all ESG data and certified ESG reporting. In addition, this non-financial data often does not have the accuracy of financial data.
What to do? Here, too, digitization comes into play. Digital technologies enable the collection, analysis and calculation of ESG data. With process mining, ESG data can be extracted from many relevant business processes.
Emission data in production can be collected directly from the machine in the cloud via sensors and IoT technologies. Companies can already use digital twins today to determine the sustainability data of a product over its entire life cycle. Ultimately, ESG software products can be used to manage all data that is collected conventionally or digitally, as well as all sustainability activities, certificates and non-financial reporting in one place.
Digital technologies for a more sustainable economy are available, but we have to use them and we have to catch up. In Surfshark’s Digital Quality of Life Index 2020, Germany still only ranks 16th in a global comparison and 23rd in the “digital infrastructure” category.
The Mission Female business network, founded by Frederike Probert, is actively committed to more female power in business, society, media, culture, sports and politics. It unites successful women across all industries with the aim of making further professional progress together.