The green economy can deliver economic opportunities for Asia Pacific, and the current pandemic-induced digital disruption could be a good time to inject sustainability into transformation strategies.
Environmental degradation, COVID-19, global supply chain challenges – these are but some of the issues we face as a global community. While much of the world’s attention is on bringing the pandemic under control, we should not lose sight of the existential threat looming on the horizon – climate change.
The United Nations (UNESCAP) estimates that climate change could force more than 100 million people from Asia Pacific into extreme poverty by 2030. Its Intergovernmental Panel on Climate Change also predicts that the sea level would rise by more than two meters by the end of this century. This would displace more than 180 million people, mostly in Asia.
Evidently, environmental sustainability is a priority that requires our urgent attention, immediate action, and sustained commitment. As a major stakeholder of our society and economy, the business community has the potential to make significant positive impact on our environment.
While focusing on sustainability may be the responsible, farsighted decision for enterprises, it can also lead to a broad spectrum of desirable business outcomes. By going green, enterprises can build positive brand reputation, forge greater trust with stakeholders, and gain a more decisive edge in the war for talents.
Sustainability can also open the doors to growth opportunities. Globally, 61% of consumers are making more environmentally friendly or ethical purchases, with 89% likely to continue after the pandemic. This presents a chance for companies to grow their market share and customer base.
Furthermore, governments across Asia Pacific are rolling out new initiatives to develop sustainability-related sectors. The South Korean government recently announced its Green New Deal which aims to create a low-carbon, eco-friendly economy. One of their approaches is to build greener, smarter industrial complexes. Singapore also announced its Singapore Green Plan 2030. One of its key thrust is to make sustainability the new engine for jobs and growth.
Additionally, by 2030, it is estimated that the green economy could deliver US$1 trillion in annual economic opportunities to Southeast Asian markets. Undoubtedly, the pivot to sustainability can be financially rewarding.
While the burgeoning growth opportunities are major drivers for enterprises to go green, another element driving the sustainability momentum is from the disruption from COVID-19.
The pandemic has forced businesses to adopt new working practices and reassess their attitudes towards travelling, commuting and consumption. Over the past months, organizations, such as leading banks, have announced plans to make working from home a permanent feature for their employees. Across the region, we are seeing more companies implementing hybrid models where employees can choose to work remotely or from the offices.
Adopting some of these new working arrangements on a long-term basis can unlock huge opportunities to reduce carbon footprints. In fact, research has found that carbon dioxide emissions fell by 7% globally in 2020, the largest decline ever recorded. Furthermore, the surface transport sector’s emissions were also halved at the height of last year’s global lockdown.
Concurrently, Covid-19 has allowed businesses to re-evaluate their future plans and redefine their business models. This provides an opportune time for them to weave sustainability into their core operations and digital transformation strategy.
Digital technology as key enabler of sustainability
Although some might argue that the top concern for enterprises now is to tackle the fallout from the pandemic and positioning their company for the future, the effort to get the business back on track and the drive to go green are not mutually exclusive.
During the pandemic, businesses across Asia Pacific accelerated their digital transformation endeavors and ramped up on the adoption of digital technologies. While their intent is focused on business continuity, raising productivity and other business outcomes, the latent potential for digital technologies, such as cloud and the internet of things (IoT), to reduce carbon footprint should not be underestimated.
A prime example would be the widespread adoption of communications and collaboration tools. The phenomenon has enabled businesses to significantly reduce their travel-related carbon emissions by providing employees with immersive, seamless solutions to connect with co-workers and customers across different geographies.
The use of technology to reduce travelling is most apparent in sectors such as the media and entertainment industry. Through remote production solutions, media production houses can pare down the number of staff travelling and production equipment being transported to a game, race, or event location. This not only allows the company to save travel cost but also reduce the environmental impact.
Another significant sustainability benefit that digital technologies bring is to enable businesses to dematerialize. By digitalizing their operations and building their services and products on cloud platforms, enterprises can cut down the physical materials they consume, including paper and plastics. This reduces their environmental footprint.
Additionally, with IoT, enterprises can now monitor various parameters in their offices, including lighting, temperature, employee utilization, and energy consumption trends. By analyzing the data, businesses can develop smart, sustainable solutions to manage their facilities’ operations more energy efficiently and develop informed measures to optimize energy usage.
While digital transformation can play a vital role in enabling sustainability, one criticism is that they consume a large amount of energy. For enterprises to genuinely embrace sustainability as part of their company’s strategy, it is imperative for them to source for greener digital solutions and partner with technology providers who can empower their organization and supply chain to be environmentally friendly.
One area that businesses can focus on is their data center partners. The acceleration of digital transformation will fuel the increased demand for data centers in the coming years. However, every data center requires a substantial amount of power to operate. Businesses can look for partners that operate green data centers. These operators will have implemented energy efficient technologies to enhance the power usage effectiveness of their data centers and will continue to develop more carbon neutral solutions for their facilities.
Furthermore, businesses should engage technology product and service providers committed to developing low carbon products and services, especially in networking, cloud, and business collaboration. The adoption of these technologies will likely continue to grow in the new normal. By building technology infrastructure that is energy efficient at its core, businesses can continue to accelerate their digital transformation plans while minimizing their carbon footprint. In the long run, this can result in significant cost savings in the form of reduced energy usage and even lower carbon taxes.
Embedding sustainability in our business future
Enterprises need to realize that sustainability is shifting from a nice-to-have to a business priority. Consumers, governments, and other stakeholders in the global community have rising expectations for businesses to be more responsible in the way they treat resources and the environment. Going green can also lead to tremendous growth opportunities.
Many businesses have already taken that first step in their journey to achieve sustainability. As enterprises start to plan and position themselves for the future, they need to make sustainability one of the outcomes they want to achieve with their digital transformation strategy.
They should also continue to find ways to maximize the ROI of their current technological deployments by leveraging them to reduce their environmental footprint. By making sustainability the north star of their future plans, it can help businesses forge new paths that are sustainable and profitable.