Is IT the solution to a sustainable business?
Sustainability has been a hot topic for a couple of years know and people in the western world have incorporated sustainability more and more in their daily lives. Some examples would be the increasing number of households that is putting solar panels on the top of their roofs to produce green energy and the increasing sales of electrical car models like Tesla and Toyota Prius. Step by step we are becoming more aware that we are the tenants of our own planet and have to make wise choices about the use of both finite and renewable energy sources. From this, it can be concluded that environmental issues have become a public concern in the last decade. However, this development also has implications for organizations.
For many organizations in the market place, sustainability has become a so called order qualifier or order winner, depending on the specific market, industry and society the organization operates in (Shahbazpour & Seidle, 2006). Many of them have even incorporated sustainability into their mission statement like Unilever (2015) who states the following: “we are committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business”. Thus, sustainability has become a critical factor for organizations to compete in the marketplace and some of them have succeeded to turn it into a competitive advantage. But how does an organization become a sustainable business? Well, this is a complicated process which goes further then only making your business processes more environmental friendly, like reducing electricity usage or Co2 output in your production process. But it also encompasses altering an organizations identity by embedding sustainability into the strategy and changing the culture into one that supports sustainability. Research has found that “sustainable companies are willing and able to engage in the kind of ongoing transformational change that is required as social expectations evolve” and that “they aggressively create new processes, products and business models that improve environmental, social and governance performance” (Eccles, Miller Perkins & Serafeim, 2012).
But what part is information technology playing in this story? Is it part of the problem or is it part of the solution? Well information technology itself is not a big part of the problem, seeing the fact that it only contributes for 2% of the global carbon emissions. However, IT is already a big part of today’s solutions. Currently IT is having a wide array of positive effects on business sustainability. IT has provided organizations with insights into their impact on the environment by giving them the tools to monitor environmental parameters like energy use and Co2 output. From these insights strategies can be developed to reduce these outputs. IT has also provided organizations with numerous tools to directly influence their environmental footprint, like e-invoicing which is making organizations more paperless (Economist Business Intelligence, 2009). Especially the future possibilities of enhancing business sustainability through big data analytics are very exciting. But we are only at the beginning of figuring out what we can do with the huge amounts of data that we are generating on a daily basis. However, big data is already giving organizations the ability to understand the entire end-to-end impact their business activities are having on sustainability. This means that they are also able to look outside the boundaries of their own organization, which is often the place were organizations have the biggest environmental impacts (Hsu, 2014).
So think about the importance of sustainability for your organization. Does it affect your market position or can you gain a competitive advantage from it? In which ways is your organization already a sustainable business and how can you make your organization more sustainable? But especially think about how IT can help you accomplish your desired state of business sustainability.
Eccles, R.G., Miller Perkins, K., & Serafeim, G. 2012. How to Become a Sustainable Company. MIT Sloan Management Review, 53(4): 43 – 51.
Economist Intelligence Unit. 2009. IT and sustainability: bringing best practices to business. Oracle [Online], Available: http://www.oracle.com/us/products/applications/green/056899.pdf [12 Oct 2015]
Hsu, J. 2014. ‘Why big data will have a big impact on sustainability’. The Guardian [Online], Available: http://www.theguardian.com/sustainable-business/big-data-impact-sustainable-business [12 Oct 2015]
Shahbazpour, M., & Seidel, R. H. 2006. Using Sustainability for Competitive Advantage. 13th CIRP International Conference On Life Cycle Engineering, Leuven, Belgium.
Unilever. 2015. ‘Purpose and principles’. Unilever [Online], Available: http://www.unilever.co.uk/aboutus/purposeandprinciples/ [12 Oct 2015]