The fourth Industrial Revolution (Industry 4.0) has been marked by unprecedented leaps in technology, moving from virtual reality to cloud computing and artificial intelligence in a few short years.
While industries are scrambling to keep up with this ever-evolving landscape, a new uprising is hot on their heels: the dawn of Industry 5.0. A movement placing individual and environmental well-being at the focus of industrial activity is fast approaching.
Single-minded pursuits of profit, productivity and growth are falling out of favour with modern consumers who, now more than ever, are facing a planet in crisis. Hopes for a smarter, more sustainable future thus are also firmly connected to the world of innovation and scientific research.
In this challenging environment, businesses will have to adapt or even reinvent their business model to successfully navigate the green and digital twin transition. While regulatory compliance with upcoming sustainability reporting requirements is certainly a core driver for some entities, there are several other incentives for businesses to invest in this effort beyond the obvious benefits of more sustainable business models to people and planet.
Non-sustainable endeavours will clearly run an increased risk of accessing finance while sustainable companies will be able to secure preferential rates. In their transition from niche to mainstream, green investments additionally provide unique opportunities to tap into new, undeveloped markets having little to no competitors.
Another advantage is improved brand perception. A growing majority of consumers favour brands that are actively implementing, promoting and transparently reporting on their sustainability measures. Higher rates of employee retention are also expected when work policies reflect good labour standards, minimising disruptions to workflow and reducing recruitment and training costs.
Perhaps no other factor will prove quite as instrumental to the green transition as the massive uptake in data acquisition. Across all sectors of industry and the benign activities of day-to-day life, large volumes of information are being collected both actively and passively, contributing to an impressive data pool of potential knowledge and resources. Comprehensive data strategies, robust forward-looking data architecture and good data governance will unleash the full potential of such data and enable novel use cases.
Complex global supply chains often pose specific challenges when it comes to due diligence or tracking certain legal requirements including in the sustainability sphere. Blockchain technology can accurately track the carbon emissions of highly complex items like cars, containing hundreds of components with decentralised processes, simplifying the reporting process.
One must recognise the transformative potential of technology and utilise it to inform better decision-making
Harnessing the power of artificial intelligence (AI) can be a viable solution for the improved energy management of buildings. Digital twinning technology uses a computer-generated duplicate of a building managed by artificial intelligence. Sophisticated algorithms continuously collect and process data from different inputs (like environmental conditions, energy use, occupant information, and building layout), identify anomalies and opportunities for improvement, and deliver active data-backed solutions to increase energy efficiency and carbon intervention measures. The collateral here is improved financial performance and a guaranteed return on investment, as inefficient systems are resolved and thus energy costs are dropped.
Similar technologies are also at the disposal of the mobility sector, a major source of pollution globally as well as locally. Systems that collect and process road data develop highly efficient routes for public transportation, accounting for surges in demand at peak hours and enacting appropriate countermeasures. Access to live data can also develop alternative routes on a dynamic basis in the case of road closures or traffic congestion, thereby increasing service efficiency.
Predictive models of fleet operation under different traffic conditions provide users with better time estimates, increasing trust in public transportation and an uptake in its use. Automated and autonomous driving systems are even further advantageous with regards to their fuel use, mitigating unnecessary human-led fluctuations in driving speed to optimise fuel consumption.
AI has also been harnessed in sustainable food production, particularly for maintaining water quality levels in aquaponic plants and for enacting watering and fertilising routines in precision farming.
These systems reduce human error, mitigate threats from weather and biological pests, limit water waste and ensure maximal product yields.
Waste of food and resources is thus avoided, a point of crucial importance given threats of food scarcity among a growing population.
While the possibilities and applications of data and information technology to support sustainable development are sheer endless, historical trends have made clear that an abundance of data alone is insufficient to spur the necessary action. One must recognise its transformative potential and utilise it to inform better decision-making.
Chris Meilak (partner) and Jeanelle Arpa (senior) are part of EY’s Malta Sustainability practice.
Technology and its applications in ESG will be discussed during EY Engage happening on June 1 at the Westin Dragonara Resort, St Julian’s. The event is sponsored by SG Solutions, BMIT Technologies, Tech Mahindra, Microsoft, GO, Exigy, ICT Solutions, AIVHY Ltd., Smart Cloud, eSkills and MDIA. For more information and to register, click here: www.ey.com/en_mt/events/engage-2023.