OWP 2022: Leading For the Future

→Execution

ACTION POINTS 1

INCREASE TRANSPARENCY

Use digital technologies to bring transparency into the sustainability and ethical impacts of your organization. MONITOR AND MODEL Use digital technologies to analyze, measure, and model your sustainability performance. Add digital capabilities to physical resources, enabling them to reduce harmful impacts. CLOSING THE LOOP Leverage digital technologies to enable reverse logistics and promote the circularity of resources. BUILD SMART RESOURCES

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MICHAEL WADE Professor of Innovation and Strategy and Director of the IMD Global Center for Digital Business Transformation

steps or reduced output. At the same time, a singular focus on performance often results in negative impacts on the planet. The future of business – and the planet – depend on bringing the two together in clever, cohesive ways.

On the other hand, digital technologies have been shown to play a very important role in supporting the transformation toward sustainability. Consider, for instance, how digital technologies have enabled the ongoing electrification of the mobility industry by overcoming infrastructure, charging, and customer adoption challenges. PERFORMANCE VS PLANET Digitization has largely been focused on economic benefits such as reduced costs, increased revenues, and enhanced agility, with relatively little attention paid to environmental impacts (we

call this a performance focus). Sustainability, by contrast, is focused on benefits to the environment, for example by lowering greenhouse gas emissions, recycling, or reducing packaging (we refer to this as a planet focus). A CONFLUENCE OF CORE DRIVERS Can both performance and planet objectives be achieved simultaneously? On the surface, they can appear non-complementary. A focus on the planet may come at the expense of performance due to increased compliance costs or lower efficiency due to additional processing

REAL WORLD CONSEQUENCES

Digitalization intersects with sustainability in two important ways. On the one hand, the environmental, social, and economic impacts of digital technologies raise important questions related to sustainability. Take, for example, the issue of digital pollution, where digital technologies have been found to account for approximately 4% of global CO 2 emissions. Or consider the role of social media in the spread of fake news, with its destabilizing effect on social cohesion and democratic systems.

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