The future of business is digital and sustainable. Here's why

The next era of industrial transformation, enabled by technology and data, will impact all sectors and reshape the way we operate, interact, and consume. It will present an opportunity for business leaders to transform their business models and value chains in a sustainable way. This will involve navigating numerous risks and navigating a complicated context.

We need to undergo two major transformations in parallel: digital transformation and sustainability transformation. Digital can not only make business more efficient and profitable but also more agile and smarter, adjusting to consumer needs and changing market conditions. The advent of smart products will give consumers a much stronger ability to take control based on accurate insights for their everyday lives.

At the same time, business leaders need to play their part in our collective decarbonization and transition to a more sustainable economy. The move to a low-carbon economy will heavily rely on technological innovations such as green hydrogen and carbon capture, as well as battery evolution. However, transitioning to renewable energy will not allow us to achieve carbon reductions of the magnitude needed: products and services account for about 45% of global greenhouse gas emissions, with energy use accounting for the remaining 55%. We need to rethink how we design and produce both, in order to do business in new and better ways.

At Capgemini, we are working on immersive experiences, which can allow you to visit a historic monument without the need to travel across the globe, use the latest technology to scale green innovation across the industry, regenerate products with a sustainable design approach and decarbonize supply chains. AI can be used to protect ocean biodiversity or track spatial data to monitor the impact of droughts on forests.

Data, Cloud, Artificial Intelligence (AI), as well as the Internet of Things (IoT), 5G and Edge computing have the potential to transform our economies and societies. They bring more efficiency and profitability but also more agility and intelligence to adjust to consumer needs. Businesses can use digital technology for everything from product development to manufacturing and operations, making use of vast amounts of data.

This will be amplified by the new generation of technologies such as synthetic biology and quantum computing, which will allow us to find answers to problems like never before. But this transformation towards a digital economy implies several risks such as cybersecurity, privacy, ethics and digital inclusion. Companies must integrate these into their transformation plan to avoid a loss of trust.

To design, build and scale products, operations and services that are more intelligent, more efficient, more sustainable, and more resilient, business leaders need to rethink their entire business models and value chains by embedding digital and sustainability into everything they do. 80% of the environmental impacts of a product are linked with decisions made at the design stage. Sustainable product design or circular practices, for example, not only reduce a product’s environmental footprint, but they also improve cost and resource use efficiency, making manufacturers more resilient to supply chain shortages.

Today, many business leaders are still not clear on the business case for sustainability. But tomorrow’s economy will need to be one which decouples growth from resource consumption. To thrive in these conditions, companies need to prioritize sustainability now, and make it a competitive lever.

Understanding the ESG performance of supply chains remains a key challenge for companies dedicated to addressing sustainability effectively. Data generates actionable insights, especially when aiming for a net zero target. However, 45% of organizations with net zero targets use emissions data only for mandatory reporting and do not embed it in decision-making.

Companies can use data to understand and predict their impact. This will range from actively managing climate risk exposure, to reporting on regulatory compliance and meeting new growth ambitions. Building an end-to-end data system that addresses environmental, social and governance indicators is key for this endeavour.

Today, businesses have the means to design, build, and scale products, operations and services which are more intelligent, more efficient, more sustainable, and more resilient. The challenge will be how fast these transformations are achieved and scaled. To become a truly sustainable business requires not only an enterprise-level transformation and a fundamental redesign of operating models and business processes but also a broad mobilization of these organizations’ ecosystems.