Business Advantages of Digital Sustainability

We live in very turbulent times. Melting glaciers, violent hurricanes, floods, earthquakes... There is far more to climate change than just media headlines, as most of us have already been impacted by it in some way. In addition, the world is recovering from a pandemic, after which nothing will be the same again, and subsequent energy and economic crises will affect even the most prominent players and every inhabitant of the Earth. This sounds like a good start to a post-apocalyptic movie scenario, but unfortunately, it is not fiction but a very tangible reality.

Climate change is having a significant impact on companies in different ways. According to a Deloitte sustainability report from 2023, where they surveyed 2,000 CxOs across 24 countries, 61% of companies expect a high or very high impact on their plans and operations in the next three years. The main issues companies are dealing with right now are a shortage of resources and the rising cost of resources, as mentioned by 46% of the surveyed companies. Also, due to climate change, 45% are affected by changes in what people buy and how they buy things.

About 43% are concerned about emissions rules, like carbon taxes and limits on corporate emissions. Another 42% are worried about not knowing what rules and politics related to climate change might come up. These findings show that companies face various challenges as they try to adapt to the effects of climate change on how they operate.

That all impacts the rise of digital transformation and corporate sustainability, which come to life both as essential parts of business model innovation and are required and demanded by conscious customers and society.

Searching for Benefits of Digital Sustainability

Sustainability strategies can have different faces. As the main topic of all of our articles is sustainable creation and use of digital technologies, we want to consider the aspect of digital sustainability incorporated into business strategy from the executives' point of view here.

No matter how personally responsible digital leaders are in the company, ecological in their everyday decisions, in their business case, they can always raise this question - ok, so what can we gain with digital sustainability? That's natural because even if we decide to support charity, doing that without analyzing what the level of these activities can be without harming the business would be highly thoughtless.

Nowadays, business representatives can feel the pressure to act in a sustainable way and state sustainability as an important part of the strategy. As the survey conducted by Delloite shows, most of them feel pressure at the same level from management, regulators, government, and customers. For example, they need to prepare their ESG reports demonstrating publicly their environmental, social, and governance impact. Almost equally important are employees and civil society, which demand climate action from them because not doing anything in that matter can hurt their reputation and brand.

Pressure is not the best catalyst for initializing positive change. This is why finding intrinsic and external motivation for incorporating sustainable change into business is so important.

In this part, we want to consider digital sustainability from a business perspective, especially emphasizing the advantages that can ultimately convince business owners, managers, and CEOs to see it as an opportunity rather than a compulsory response to governmental regulations or social pressure.

The key word for us here would be authenticity - without it, we can’t create a reliable and aware brand that cares not only about the profit but also about the broader scope of its impact on people and the planet.

Energy Efficiency

The imperative for businesses to embrace sustainability has become increasingly apparent, driven by a deep-seated awareness of the risks posed by climate change. According to a report by the Harvard Business Review, 72% of businesses recognize that climate change carries inherent risks that could profoundly affect their operations, revenue, or expenditures. This heightened awareness underscores the urgency for companies to integrate sustainable practices into their operations.

Furthermore, the commitment to sustainability is not merely a reactive measure but a proactive strategy for success. Over 90% of CEOs, as highlighted by the Stanford Social Innovation Review, affirm that sustainability is integral to their company's success. This resounding consensus among business leaders signals a transformative shift towards prioritizing sustainability as a key driver for long-term prosperity in the corporate landscape.

Is digital sustainability something additional or different that businesses should consider while searching not only for individual imperatives for fighting climate change? There are myriads of advantages that companies can embrace with digital sustainability. However, let's start with this one.

According to the abovementioned Deloitte sustainability report from 2023, 66% of the surveyed companies are working to increase their energy efficiency. And this is good both for the planet and for the business. Energy efficiency means not only that we reduce the emission of carbon dioxide into the atmosphere but also cut expenses on the energy itself.

In this way, we arrive at the digital sustainability point. Digital sustainability favors efficient solutions. As stated in the Sustainable Web Manifesto:

Efficient

The products and services we provide will use the least amount of energy and material resources possible.

Sustainable Web Manifesto

Caring about digital sustainability means monitoring and controlling the data we produce, transfer, update, and generate. Thanks to it, we also control the total weight of our products - whether they are a tremendous e-commerce website, enterprise website, mobile applications, or simply pictures and movies we publish on social media.

Fewer data we generate means less space on the server to hold and operate. When we want to go sustainable in the digital realm, we can also consider the technology aspect itself. It implies not only digital data but also devices and their management.

Businesses get used to that they buy many items in the leasing model. That means that every 2-3 years, they are encouraged to leave “old” computers, printers, smartphones, and so on and change them to newer models. Of course, sometimes it is necessary, but it is often only a whim to have something that looks more modern, supported with fresh design and captivating marketing taglines. However, in many cases, those “old” devices and tools are still doing their great job; in some cases, they may even outperform newer models in certain aspects.

The environmental impact is one of the downsides of this constant leasing and upgrading cycle, which goes against the circular economy. Electronic waste disposal is a growing concern, as it can lead to pollution and potential health hazards. Additionally, the manufacturing, transportation and supply chain of new devices also contribute to carbon emissions and resource depletion.

Another downside is the financial cost. While leasing may seem like a convenient and cost-effective option in the short term, in the long run, it can lead to higher expenses compared to purchasing and using devices for a more extended period.

Therefore, businesses should consider the actual necessity of constantly upgrading their equipment and weigh the environmental and financial drawbacks against the perceived benefits of having the latest technology. It may be worth exploring options for extending the lifespan of their existing devices through maintenance and upgrades, as well as investing in more sustainable and durable technology solutions and digital tools.

Ultimately, taking a more conscientious approach to technology consumption and searching for efficiency in their creation, operations, and related digital services, such as hosting, can benefit both the business and the environment.

Engaging Employees: The Role of the Green Team

Happy employees equals a happy company. It sounds trivial to convince anybody that the well-being of employees positively impacts the business and leads to its success. Today, employees have also gotten used to some level of work culture and the company's benefits. Health insurance, sports cards, or remote/hybrid work is sometimes not treated by them as a benefit but as a standard, especially by the top talents. They are increasingly focused on less basic and less material bonuses to their work. They care about the work culture, self-development time, and feeling of being cared for and heard of in the company.

Today, employees are increasingly concerned about alignment between the company mission and their values connected with environmental issues. Their commitment to environmental responsibility has emerged as a critical factor influencing workplace choices. According to Fast Company, over 70% of employees in large U.S. companies prefer working at organizations with a robust environmental agenda. Furthermore, nearly 70% of respondents acknowledge that a robust sustainability plan significantly impacts their decision to stay with a company for the long term. Interestingly, close to 40% have opted for a job in the past specifically because the company excelled in sustainability compared to other options.

Moreover, more than a third of respondents have dedicated extra time and effort to their roles due to their employer's sustainability goals. The impact of employee activism on climate matters is notable among top executives (CxOs), with over half stating that it has driven their organizations to increase sustainability actions over the past year. Remarkably, 24% of them reported a "significant" increase in these initiatives spurred by employee engagement. These findings underscore the increasing significance of sustainability practices as a critical driver in both employee preferences and organizational strategies.

Business owners are building tighter bonds with employees by considering digital sustainability and including it in the strategy and mission promoted between employees. Leveraging a culture of sustainability within the organization presents them with a subsequent, more responsible level of building the business. Not only focusing on the revenue but also on the future of the world, the environment, and the planet.

Working in a sustainable company, both at digital and any other level, presents employees with an unconventional approach and innovative path that differentiates their company on the market, making it not the next usual corporation but a unique, more adult, and more noble organization.

Business owners and managers can create the image of sustainable business by not only promoting their missions and actual actions hidden behind the words and statistics. A significant part of it can be engaging employees in processes designed to improve sustainability scores and results of the business.

That's the idea of building green teams within the organization and the manager's leadership role in promoting sustainable practices. So, not only does the company reduce the amount of CO2 by decreasing the weight of the website or the number of used digital technologies. It is also about encouraging employees to become more environmentally friendly by appreciating and rewarding their eco-conscious actions - for example, choosing more ecological commuting by bicycle, supporting the no-flying policy, and choosing more energy-efficient solutions in the office and at home.

Having the green teams inside your company positively impacts and creates a self-propelling mechanism at your company. On the one hand, managers can affect the well-being and comfort of employees; on the other hand, employee engagement can lead to further innovation and improvements in sustainable solutions.

Think Different - Be Different. Competitive Advantage

In a market saturated with businesses vying to sell similar products and services in similar ways, differentiation becomes the key to success, and sustainability emerges as a potent avenue for setting a company apart.

Let's take a clothing company, Patagonia, as an example. Their offer would be next, similar, filled with outdoor clothes for active people. But they attached a message about the care of the planet and the climate crisis. On their website, we can read:

At Patagonia, we appreciate that all life on earth is under threat of extinction. We aim to use the resources we have—our business, our investments, our voice and our imaginations—to do something about it.

About Us, Patagonia website

The center of their value is environmental issues, so they constantly improve how their clothes are manufactured and their resilience. They openly support environmental organizations and encourage people to buy, repair, and use their second-hand branded clothes.

Sustainability is also at the core of Danone's brand - Alpro. Naturally, their plant-based product has a lower carbon footprint than traditional dairy. Still, they, in a transparent way, improve their sustainability in their ingredients, water, and energy efficiency and create better packaging.

Those brands, as many others such as Beyond Meat, Seventh Generation, Native Shoes, IKEA, or Who Gives a Crap, leveraged sustainability for competitive advantage and used it in an authentic way seeing that it resonated with their conscious customers. Amid the awareness of the global problem related to the climate crisis, companies are taking action by adopting sustainable practices. They are leveraging more sustainable materials, enhancing energy efficiency, providing training for employees, and innovating to develop new climate-friendly products.

By adopting sustainable practices and incorporating environmental and social responsibility into their business models, these brands have been able to differentiate themselves in the market and appeal to a growing base of environmentally conscious consumers. They have also attracted and retained top talent, as many employees are increasingly seeking out companies that align with their values. By demonstrating a commitment to sustainability, these brands have built trust and loyalty among their customer base, ultimately driving long-term success and growth.

Overall, sustainability has proven to be a powerful tool for these brands to gain a competitive edge in their respective industries.

Providing a unique value proposition

Competitive advantage is tightly correlated with providing long-term customer benefits, called a unique value proposition in sales and marketing terminology. By implementing best practices of digital sustainability, we can create a unique value that sets us apart from our competitors.

The care about the planet today is also one of the biggest concerns of conscious customers. More and more people prefer companies that care about social and environmental issues. According to Forbes, 88% of consumers would stick with a company supporting such causes. And it's not just about loyalty; 81% of people also plan to buy more eco-friendly products in the next five years, as found by Accenture.

Brands with good sustainability records are winning hearts, with 83% of consumers choosing them, says Wunderman Thompson. Additionally, according to Accenture, 83% of people believe it's essential for companies to make products that can be reused or recycled. These precise numbers show that people want businesses to be environmentally friendly and make choices based on that.

The urgency of addressing climate change resonates strongly with Gen Zs and millennials, with nearly 75% from both generations expressing that climate change contributes to their feelings of anxiety or stress, as highlighted by Deloitte. And that's not the secret. The youngest people feel the most that the problem will not impact their children or grandchildren, but it is much closer, as they experience the harmful causes of global warming and climate change during their lives.

By incorporating these practices into our business model, we can offer customers the peace of mind that comes with knowing they are supporting a company committed to environmental sustainability. This can attract environmentally conscious consumers who prioritize sustainability and are willing to choose our products or services over those of our competitors.

In addition to attracting environmentally conscious consumers, implementing best practices of digital sustainability can also lead to cost savings and operational efficiencies, which can be passed on to our customers through competitive pricing and better value for their money. This can further enhance our unique value proposition and give us a competitive advantage in the marketplace.

Ultimately, by prioritizing digital sustainability and incorporating it into our unique value proposition, we can differentiate ourselves from our competitors, attract and retain environmentally conscious customers, and create long-term customer benefits that contribute to our sustainable competitive advantage.

Managing costs, finding savings, and boosting revenue

Money, money, money... Leading a successful company is not only about profits, but savvy executives and business owners recognize the importance of managing costs, finding savings, and boosting revenue. Sustainable digital solutions play a crucial role in achieving these goals. Sustainable development in the digital realm ensures that technology enhances performance, efficiency, and overall digital maturity while also addressing environmental concerns by reducing the company's carbon footprint.

Focusing on improving productivity and efficiency in using digital technologies also positively affects the company budget and business growth. For example, companies can reduce expenses by optimizing website performance, choosing a low-carbon strategy in design and coding, and green hosting.

The financial benefits of sustainable practices are well-supported by various studies. According to the Harvard Business Review, a review of 200 studies on sustainability initiatives and corporate performance reveals that 90% of them conclude good ESG (Environmental, Social, and Governance) standards lower the cost of capital. Furthermore, 88% of these studies show that incorporating good ESG practices into business strategies leads to better operational performance. Stock price performance is also positively correlated with sustainable business practices, with 80% of the studies demonstrating this connection.

In addition, companies that blend high levels of innovation with a focus on 'sustainability and trust' outperform their industry peers, yielding 3.1% higher operating profits and greater returns for shareholders, as noted by Accenture. McKinsey's research emphasizes the significant correlation between a company's resource efficiency and the strength of its financial performance. By reducing resource costs, a company can improve operating profits by up to 60%.

Real-world examples further underscore the financial gains of sustainability. Walmart, by improving fuel efficiency by approximately 87% between 2005 and 2014, avoided 15,000 metric tons of CO2 emissions and saved nearly $11 million in a single year. Similarly, General Electric (GE) achieved substantial savings by reducing greenhouse gas emissions by 32% and water use by 45% between 2004 and 2013, totaling $300 million. This convergence of sustainability and financial success illustrates that embracing environmentally conscious practices is good for the planet and the bottom line.

Better User Experience = Better Visibility And SEO

Focus on sustainability and positive digital transformation may also improve customer experience on our website and, thus, our visibility in search engines. It is about more than having an attractive and functional website, application, or well-crafted digital marketing strategy. Improving UX and SEO and being higher ranked in the SERP are additional benefits of a well-optimized website and application.

Google, the most popular search engine, especially likes when websites are fast, well-optimized, user-friendly, mobile-friendly, and accessible, providing high-quality content. Of course, it is not the magic recipe for becoming highly recognized by users and getting on the top of the best sites in search rankings. Still, it can definitely improve online visibility on the market.

One of the most important factors here is speeding up the website and optimizing the flow of it. In a natural way, sustainable websites are better optimized in terms of their code, content, and total weight. This means that they are becoming super-fast. Users love the fast and smooth experience offered by web creators. Their time is valuable, so they want to get what they search for quickly during the most pleasant customer journey.

We lose nothing even if we decide not to use sustainability for our company value creation. Furthermore, we can gain a lot, as best practices for sustainable digital products will work in the same profitable way, no matter if they are part of our strategy.

However, by successfully integrating sustainability best practices into digital products, we show that we are committed not only to reducing the environmental impact but also to putting the user at the center of our digital strategy and designed experience.

In addition, businesses prioritizing sustainability and digital transformation strategies will likely engage in ethical and transparent practices, which can also contribute to their online reputation and visibility. As we already mentioned, consumers are increasingly seeking out brands that align with their values, and businesses that showcase their commitment to sustainability and positive digital transformation are likely to attract and retain a loyal customer base.

To sum up, sustainable practices and successful digital transformation will allow businesses to maximize their impact on the environment and society and enhance their online visibility, reputation, and success in the digital age.

Following Governmental Regulations

Dealing with government rules can be challenging for companies trying to be more sustainable. It's an extra pressure for them to improve their environmental practices. Ideally, we wouldn't need them, and everyone would feel responsible for including ecological action in the strategy. But we are not there yet, unfortunately. A report by Deloitte in 2023 revealed that 65% of Chief Experience Officers (CxOs) said that changes in the rules made their organizations do more for the environment in the last year. This shows that regulations have a significant impact on how companies act and can lead to positive changes for the environment.

However, it's crucial to know that these rules exist for a reason — to protect the environment, public health, and worker safety. We can treat them as complications, but it is better to see them as opportunities as they will surely remain with us and grow over time. Following these rules might mean companies adapt to new realities, invest in new technologies, change how they do things, or make new policies. Even though it can be challenging in the short term, these changes can bring good things for the company, the community, and the planet in the long run.

What are the current and future regulations related to business and their environmental impact? The most important are the EU Regulations on Sustainability and the EU's greenwashing regulations. The Due Diligence Corporate Sustainability Directive, coming into effect in 2024, obliges big companies with their headquarters in the EU to make regular analyses of the social and environmental impact of their operations in the form of ESG reports. Moreover, The EU's green claims directive and other regulations aim to combat greenwashing, with potential penalties of up to 4% of a company's turnover.

Our civilization is increasingly aware of the need to fight climate change together, and governments may introduce additional environmental regulations to encourage businesses to adopt sustainable practices in the near future, such as emission targets or waste management requirements. These regulations could also include incentives for companies that invest in renewable energy sources, minimize their carbon footprint, or implement eco-friendly production processes. Moreover, businesses may be required to provide transparency in their environmental impact by reporting and disclosing their sustainability efforts.

Furthermore, progressive environmental regulations may also entail penalties or fines for companies that fail to comply with these standards. This approach ensures businesses prioritize sustainability and take full responsibility for their environmental impact.

Governments may also offer financial assistance and technical support to businesses willing to adopt sustainable practices to support and facilitate the transition to a greener economy. This may include grants, tax incentives, and access to resources for research and development in sustainable technologies.

Ultimately, these measures aim to foster a culture of environmental responsibility within the business community and encourage sustainable growth. By aligning economic incentives with environmental goals, governments can accelerate the shift towards a more sustainable and resilient economy, which is crucial in the fight against climate change.

Becoming future-proofed

By incorporating digital sustainability, we respond to current and future governmental regulations, but this is not the only gain. Digital sustainability plays a crucial role in ensuring long-term business resilience. As Sustainable Web Manifesto states:

Resilient

The products and services we provide will function in the times and places where people need them most.

Sustainable Web Manifesto

This rule benefits not only users of designed technology but also their creators and owners. By embracing sustainable digital practices, companies become better positioned to adapt to evolving consumer expectations and market trends. Imagine that since the beginning of planning, designing, and developing your digital product, you keep in mind that you want to focus on the most critical functionalities, on the design that follows its function to respond to the user needs and make their journey on the website the most pleasant.

The business benefits of digital resilience are multifaceted, resonating through various layers of an organization, from its financial health to its brand image. Finally, we are trying to optimize our products to be achievable for everyone, no matter how weak the internet connections are and how old the devices are.

The digital transformation ultimately enables companies to achieve their sustainability goals by allowing them to monitor and improve resource and operational efficiency. Mainly, thanks to digital sustainability and its practices, we can have the scope to create products and services that are efficient and lower their carbon footprint. Those benefits are not only reserved for the largest players. Also, small and medium-sized businesses (SMEs) can benefit from digital resilience by gaining access to new markets, reducing operational costs, and improving customer engagement.

Another key benefit of digital resilience is adapting and innovating in a rapidly changing environment. Organizations can quickly respond to market changes, customer demands, and new opportunities by utilizing digital technologies. This agility is essential for staying competitive and thriving in today's fast-paced and unpredictable business landscape.

Moreover, digital resilience can also enhance data security and privacy in data analytics, protecting sensitive information from cyber threats and potential breaches. This is crucial for maintaining trust with customers and stakeholders and adhering to regulatory requirements.

Overall, digital resilience offers many benefits, from financial and operational advantages to environmental sustainability and security. Embracing digital transformation and building resilience into business practices can lead to long-term success and growth for organizations of all sizes and industries.

Sustainable digital transformation - the key to successful long-term business strategy

The journey toward digital sustainability is more than just compliance with governmental regulations and responding to the pressure coming from conscious customers. Regulations and pressure are not the best accelerators of positive change. That's why it is crucial to recognize several business advantages that can keep us motivated in our transformation of business model for more sustainable.

By embracing digital sustainability, companies can navigate the uncertainties of our times, foster innovation, and contribute positively to both their bottom line and the broader well-being of our planet.

As more businesses realize these benefits, sustainable digital transformation becomes not just a smart move but the essential key to long-term success in a world that's always changing.