8 minute read 22 Mar 2023
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The sustainable tech transformation: Paving the way for a greener future

Authors
Martin Ceccon

Partner, Strategy | EY Parthenon Switzerland

Martin is passionate to drive strategies for growth and portfolios, as well as sustainability and digital strategies for companies.

Mark Veser

Partner, Head Climate Change and Sustainability Services | EY Switzerland

Leads EY Switzerland’s Climate Change and Sustainability Services team.

8 minute read 22 Mar 2023
Related topics Sustainability

There are various challenges that must be addressed by the economic players when seeking sustainable technological transformation.

In brief
  • 3 action areas to promote green growth: creating guidelines and frameworks, supporting technological innovation, promoting responsible technology usage
  • Bringing together business and public sectors, academic and government institutions is critical to co-create sustainable benefits enabled by technology
  • Sustainable technological transformation is necessary for green growth, and technology plays a pivotal role in achieving the CO2 targets for Switzerland

The green economy is a different vision for growth and development, one that may provide economic progress while also increasing environmental and social well-being. Promoting the development and implementation of sustainable technology is an essential component of a green transformation strategy. There are various challenges that must be addressed by the industry, private and public decision-makers and experts when seeking sustainable technological transformation.

Switzerland's performance in the global economy is increasingly dependent on data-driven value creation and new income streams from digital products and services. Data and processing it to actionable insights will accelerate digital transformation to produce sustainable economic and social progress and provide the fundamental foundation for green change. This is a great chance for Switzerland since it can build on a strong business sector with numerous technology and digital pioneers, and in addition to that, sustainability is very well ingrained in the country’s DNA.

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Green Growth Paper

The coming years will be decisive for the path to Green Growth which means to foster economic growth and development in a sustainable way. The potential of digital technology and the cloud as the innovation platform of the 21st century will be crucial for green transformation.

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The green economy transition and sustainable technological change

Humanity faces many environmental concerns today, including global warming, air pollution, water pollution, and deforestation. In this context, the “green transformation” employs environmental and digital technology to transform enterprises and society to tackle environmental concerns while simultaneously attaining green economic development. The basic concept behind the green transformation is to create a sustainable society by going beyond previous initiatives and taking the next step by using technologies to change the systems that community and industrial structures are built on.

As a result of this global trend, companies, individuals, and governments are called upon to step up their efforts to address climate change.  For this reason, the UN Global Compact Network Switzerland and Liechtenstein, Microsoft Switzerland, and EY Switzerland built the Tech for Sustainability Circle. The Circle intends to unite organizations to share knowledge, boost transparency and measurement, and nurture dialogue between the private and public sectors, academia, and governmental organizations. In its white paper “Green Growth” the Circle identified the following topics as crucial points and formulated calls for action: 

  • Green Growth
  • Responsible Artificial Intelligence (AI)
  • Impact Measurement

The promise of green growth

The following years will be critical for the route to green growth, which implies fostering long-term economic growth and development. To achieve green growth in Switzerland, governments, corporations, civil society actors, academics, and others must all work together; in short, we are all responsible. To achieve such a monumental task ahead of us, a collaborative mindset to co-create the needed solutions is the most promising way forward.

Even if Switzerland's negative environmental impact per person has fallen by around 20% in the previous 20 years, consumption, and manufacturing patterns are still unsustainable. Under current conditions, Switzerland's CO2 reduction target of 2030 is unlikely to be met. As a result, technology is already playing and will continue to play a pivotal role in achieving our Swiss CO2 targets. Moreover, Switzerland developed a “2030 Sustainable Development Strategy” and a referring action plan to address the three main objectives:

  1. sustainable consumption and production 
  2. climate, energy, and biodiversity 
  3. equal opportunities and social cohesion

The country's “Digital Switzerland” strategy provides a framework for leveraging digital technologies to address ESG-related challenges. As a result, a sophisticated ecosystem that focuses on leveraging breakthrough technology to address critical challenges is already in place, aided by the recently formed Swiss Innovation Fund to promote start-ups.

The “Digital Switzerland” strategy emphasizes the convergence of the digital and green transitions. To promote green growth facilitated by technology, the Tech for Sustainability Circle perceives a call to action in three areas:

  • Switzerland creates guidelines, frameworks, and assistance for key players from the public, corporate, and academic sectors focusing on the role of technology in achieving the specified 2030 and 2050 green growth sustainability targets
  • Switzerland should stimulate and support technological innovation creation and implementation, as well as the exchange of best practices, to expedite positive sustainability effects and assure the attainment of the 2030 and 2050 sustainability targets
  • Switzerland will develop guidelines, frame conditions, and provide support to promote responsible technology usage, including reducing one's personal environmental footprint and considering and mitigating social impacts

Empowering impactful responsible AI

By combining Switzerland’s 2030 Sustainable Development Strategy with its Digital Strategy, the goal is to use advanced technology to tackle tomorrow's challenges. AI is one of the potential technological categories that is attaining this goal. Unleashing the potential of data and AI opens up an infinite number of economical options, eventually improving the quality of our lives.

As business models become increasingly digitized, human lives are impacted significantly by design choices of algorithm creators. Companies are on the verge of integrating their sustainability plans into their digital, data, and (AI) strategies and governance. All aspects of social and environmental responsibility need to be weaved into AI developments. In short: We require “Responsible AI”, which enables the design, development and deployment of systems and solutions based on models of fairness and responsibility. To ensure responsible use, governments must take steps to make responsible AI the standard in their respective countries. Switzerland should explore enacting standards for trusted AI comparable to the European Commission's AI Law. This strategy should be included in a global education and knowledge exchange approach.

With its political and historically neutral position in the global community, Switzerland might serve as a cornerstone to organize and drive worldwide collaborative efforts to further develop, nurture, and create notions of “responsible AI,” solutions, and platforms.

Therefore, we conclude the following call for action for organizations, societies, and governments:

  • When implementing AI solutions, consider how to comply with the most recent legislations, such as the European Union's Artificial Intelligence Act and the Ethics Guidelines for Trustworthy AI
  • Consider concepts and methods to build trust and responsibility across the lifespan of your AI portfolio, such as Fairness, Safety & Responsibility, Privacy & Security, Explainability, Inclusiveness, Transparency, and Accountability
  • Because technology and sustainability are interconnected, organizations must place sustainability at the center of their business and technology strategies and technology at the heart of their sustainability journey to survive and grow. Similarly, any policy framework that promotes long-term change must include a digital transformation to accomplish any ambitious climate and environmental goals
  • Regulations such as the EU's Artificial Intelligence Act are already impacting many Swiss enterprises and organizations. While efforts should be taken to guarantee responsible technology and AI, legislation should consider and, in certain circumstances, allow AI-supported adaptation not to restrict technical and societal progress
  • AI regulations should prioritize empowering and safeguarding individuals, while citizens must be better informed on norms and guiding principles, particularly in the context of “Responsible AI” advancements
You can't manage what you can't measure
Antonio Hautle
Executive Director at the UN Global Compact Network Switzerland & Liechtenstein

What we measure determines what we strive for

Impact measurement stands for the process of quantitatively and qualitatively evaluating the impact of an organization. It is the most important tool to ensure businesses reach their goals.

Many attempts have been undertaken to standardize impact assessment and report on organizational impact, resulting in the first reporting standards in the late 1990s. Given the variety of existing reporting standards and frameworks, businesses still need to determine which disclosures to implement. Standard setters such as the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB), the World Economic Forum International Business Council (WEF IBC), the Science Based Targets Initiative, and the European Financial Reporting Advisory Group (EFRAG) are increasingly working in cross-collaborations to define common standards for sustainability reporting. Until these uniform and interoperable standards are established, firms and investors may struggle, for example, when comparing exposures among relevant industry competitors. For this reason, standardized certifications must emerge and be introduced in this area in the future. This will create a comparable basis.

In addition to the plethora of existing rules, many businesses still rely on manual methods to collect data, combine it across business divisions, and compute KPIs. This is not only prone to errors and inaccuracies but can also be time and resource consuming. Companies should harness technology whenever feasible to improve data analytics and automated controls and display the consequences of deviations from raw data input. Big Data facilitates the availability, use, and analysis of data. Furthermore, a robust data foundation may be automatically established to improve internal reporting and hence measure progress toward environmental and social goals.

Technology will be critical in directing us toward a greener future. Green growth, AI, and, in particular, machine- and deep-learning technologies have enormous potential to alleviate climate change and handle effect assessment difficulties. As a result, the private and public sectors must unite and collaborate to bring about the transformation that our society demands.

Therefore, we conclude with the following call to action:  

  • Standardized impact measuring methodologies and common sustainability reporting standards must be adopted as quickly as feasible to enable targeted action and comparison across industries and enterprises
  • Businesses must employ digital technology to more accurately, transparently, and consistently evaluate and share their impact on people and the environment as well as the impact of social and environmental developments on the businesses’ financials and strategic targets
  • Transparency is the first step toward a sustainable future
  • About the Tech for Sustainability Circle

    The UN Global Compact Network Switzerland & Liechtenstein, Microsoft Switzerland and EY Switzerland have decided to build the Tech for Sustainability Circle. The Circle intends to unite organizations to share knowledge, boost transparency and measurement, and nurture dialogue between the private and public sectors, academia, and governmental organizations.

    Since its foundation in 2021, new members have joined constantly to bundle resources, knowledge, know-how, and manpower to drive and shape key themes for technology and sustainability. It now brings together over 15 parties to co-create positive sustainability impact enabled by technology. 

    The current work of the Circle focuses on the three defined themes in its scope, “green growth”, “responsible artificial intelligence (AI)”, and “impact measurement”, and is intended to trigger further discussions and actions for a sustainable Switzerland enabled by technology.

Summary

As part of its commitment to the Tech for Sustainability Circle, EY will continue to bring organizations together to exchange expertise, increase transparency, and foster discussion between the business and public sectors and academic and government institutions. It is critical to co-create good sustainability benefits enabled by technology and to highlight exemplary practices from companies and the government.

Acknowledgement

This Article as well as the Green Growth White Paper was conducted not only by EY but in collaboration with representatives from Microsoft Switzerland and UN Global Compact Network Switzerland & Liechtenstein.

About this article

Authors
Martin Ceccon

Partner, Strategy | EY Parthenon Switzerland

Martin is passionate to drive strategies for growth and portfolios, as well as sustainability and digital strategies for companies.

Mark Veser

Partner, Head Climate Change and Sustainability Services | EY Switzerland

Leads EY Switzerland’s Climate Change and Sustainability Services team.