Sensing the way towards Digital Circularity

Today more than ever, we need to pay attention to the environmental and societal impact of our actions, both as citizens within our own homes, and as leaders within our businesses. In this regard, Environmental and Social Governance (ESG) has gained greater reputation among investors, policymakers, and other key stakeholders as a useful framework to orientate companies in the journey towards sustainability through innovation.

Getting there brings about momentous decisions for companies. In the future, it will not be enough for businesses to just do different – they will need to be different. And it was that premise that inspired the Strategic Foresight team to consider a new way of framing these challenges, looking not just at the ultimate goal of sustainability, but at the key business practice that will unlock reaching it: responsible business behaviour.

The Strategic Foresight team looked at seven different cross-validated areas (PESTLE trends, Consumer & Cultural Trends, Regulatory trends, start-up and technology trends, internal and external expert interviews) to define the future of responsible corporate behaviour, scanning for individual signals of change and bigger innovation patterns and trends. The result was a framework that captured the evolving Future Codes of Responsible Business Behaviour in terms of corporate duty, culture, governance&strategy, and operations.

This roadmap was used to think boldly and differently about the challenges our clients will face and how we might more holistically support them over the coming decade, capitalizing on our expertise around innovation, digitization and technology. These forces, and the way they intertwine, can really make an impact on the attitude of companies towards sustainability.

That’s why, through interactive, ideation workshops, Deloitte has identified ‘Digital Circularity’ - i.e. the application of the circular economy framework to a company’s digital ecosystem, and, more generally, to the production and commercialization of digital products - as a symbol of corporate responsibility, and one of the most promising white spaces where to investigate innovative solutions against climate change.

Digital technology can indeed accelerate, simplify, and improve our transition to greener economies and healthier lifestyles, acting as a catalyst for responsible business improvement and green compliance. However, it can also produce negative spillovers on the environment: digital activity, in fact, accounts for up to 4% of global carbon emissions and is predicted to reach 8% by 2030, when it will pollute just as much as cars do today. For instance, 2 hours of virtual meetings every day for a year produce the same amount of CO2 as 3000 miles driven by car. Even dormant digital pollution, as in the case of current global e-mail storage, requires enormous amounts of energy resources, equal to that of five nuclear plants, and it is only going to increase: storage sizing and new data generation rates are doubling each year, preparing the ground for a true data explosion. The digital transition can really act as a powerful climate change mitigator, but it needs to be undertaken consciously.

Hence, as part of the responsible company’s innovation strategy, it has become pivotal to adopt a new perspective on Information Communication Technology, that takes into account its carbon footprint and overall impacts on the environment. Is it possible to ‘recycle’ digital assets? How can we avoid wasting the efforts of developing software? What is our clients’ expertise in terms of Green IT? Can digital recycling improve our client’s attitude towards sustainability? These, among others, were the questions uncovered by the Strategic Foresight team and that are now being further investigated in by the Venture Design team. After weeks of cross-disciplinary workshops aimed at mapping the most relevant technologies, identifying the right partners and channels, and developing feasibility studies, the Venture Design team is now working on a proof of concept, that will eventually result in a proposition around Digital Circularity.

Tackling innovation and sustainability issues is a battle on many fronts, which can sometimes turn challenging. Approaches to future and present challenges shall include holistic, long-term perspectives. Deloitte is committed to supporting clients in reframing present and future objectives, while developing more comprehensive and innovative solutions for the prosperity of our planet, people, and clients. By combining sustainability and technology with responsible behavior, we can uncover incredible opportunities, and support companies in their journey towards a green sustainable transition, powered by innovation. In this regard, Digital Circularity opens unprecedented possibilities to address sustainable innovation, the magnitude of which is yet to be fully assessed. It represents in fact one of the most promising areas of ESG applications, one where immediate action is necessary. Deloitte stands with its clients at the forefront of this unprecedented frontier – and is ready to take up the green digital innovation challenge.