How Leaders Can Leverage Digital Technology to Drive Sustainability

In this article featuring insights from Bissan Ghaddar, Associate Professor of Management Science and Sustainability at Ivey Business School, we explore how digital technologies, such as AI and Machine Learning, can help organizations meet strategic environmental and sustainability goals.

Artificial intelligence (AI) and machine learning are developing at warp speed, impacting almost every aspect of modern life. From the face ID that opens our mobile phones to the algorithms that help keep our bank transactions safe, AI is already seamlessly integrated into our daily routine.

Further, the explosive popularity of ChatGPT and other generative AI applications over the past year has sparked greater public awareness and increased discussions around AI technology’s potential across different industries, leading many individuals to consider innovative ways that they can leverage AI and machine learning against complex challenges. 

What is AI and Machine Learning?

AI mimics human intelligence by processing and analyzing enormous amounts of data to look for correlations and patterns that can improve predictive models.

AI and machine learning offer almost every industry the opportunity to transform processes and products through capabilities like predictive analysis, speech recognition and natural language learning, image and video processing, and recommendation engines.

While some experts fear that AI could be used for malicious purposes and have called for global regulation and a pause on development, others argue that digital technologies can play a vital role in tackling complex global challenges.

Sustainability as a competitive advantage

Dr. Bissan Ghaddar, Associate Professor of Management Science and Sustainability at the Ivey Business School, works on problems at the intersection of machine learning and optimization models. When it comes to business, she says that emerging digital technologies can help leaders boost performance while achieving their organization’s strategic environmental and sustainability goals.

“Today, it’s not sufficient to only look at the financial aspects from a leadership perspective,” says Ghaddar. “Leaders also need to look at the environment as well as the social impact. Having these three pillars interplay together is very important for the success of any business.”

In addition to facing regulatory issues, Ghaddar says organizations that fail to integrate sustainability into their day-to-day operations risk losing customer market share, investment opportunities, and the ability to attract purpose-driven, high-quality talent. “Talented employees want to work on things that will make an impact,” she says. “They will challenge some of the traditional aspects of your business and bring new innovative ideas.”

Using AI to Drive Sustainability Initiatives

AI and technology-driven approaches can help organizations use resources more efficiently, reduce waste, optimize planning and investments, and maximize energy efficiency. Digital technologies can also help collect, analyze, and drive insight into a company’s Environmental, Social, and Governance KPIs. “This information is becoming very important to board members and other stakeholders,” Ghaddar notes.

“From small businesses and startups to big corporations, more and more companies are incorporating sustainability into their day-to-day operations,” she says. “And the opportunities to use digital technology to support sustainable initiatives are almost endless.”

As one example, Ghaddar cites the city of Berlin where AI is being used to improve tree irrigation. “They are trying to predict when trees need watering, and how much water they require,” she explains. Not only will the initiative conserve water, it will also improve the health of the city’s trees, providing a greener urban environment for everyone to enjoy.

Other examples include global giants IKEA and Amazon. Both are using optimization and AI to support the shift of their last-mile delivery fleet to electric vehicles. When it comes to mitigating the impact of climate change, Ghaddar says that IBM and the Weather Network have formed a partnership to predict how extreme weather may impact industries as an example of how AI and other technology tools can be used to have resilient and robust operations.   

AI is already being used widely across the manufacturing sector to improve efficiency and reduce waste, Ghaddar notes. “AI can identify when a product is defective early in the process so you don’t waste materials on something that is not going to be a viable product,” she explains. “It is also being used for predictive maintenance so things can be repaired before they break down. The applications are endless.”

Leadership for a Sustainable Future  

When it comes to introducing technology-driven sustainability initiatives, Ghaddar says that leaders should ensure that all stakeholders are on board. “If it’s going to work, you need to involve everybody from the investors, to the customers, to the municipalities. You really need to collaborate and think about it as a collective thing.”

Having a long-term vision is key. “Some companies focus on the immediate benefit, such as increasing profits in the next quarter,” she notes. “When you start incorporating environmental, societal, and financial variables, it will help you see the big picture and think more about the long-term implications of sustainability and technology.”

And finally, any sustainability or environmental initiative needs a structured plan. “Having a strategic vision with strong leadership and stakeholder commitment is key to creating a more resilient, sustainable business with improved outcomes.”

Of course, most business leaders are not AI experts. But Ghaddar says they don’t need to be in order to implement technology-driven change. “Leaders need to be willing to take risks in an informed way,” she says. “They should have some understanding of the types of AI applications out there, and understand the pros and cons of applying a given technology.”

When it comes to introducing disruptive technologies, she suggests taking a good look at what others in your industry are doing and then deciding which approach makes the most sense for your organization.    

Ghaddar suggests starting with one small project, such as a technology-driven solution to reduce energy consumption, or a more sustainable way to deliver goods. “You can change and iterate as you go, but you have to start somewhere,” she says. “Once you see the impact on your customers, on society, and on your bottom line, you can take it one step further.”

She speaks further to the cost of inaction for leaders who are hesitant to embrace innovation.

“In order for companies to have a competitive advantage, it’s really important for leaders to think about technology and sustainability in the business,” she notes. “It’s something you can’t afford to ignore.” 

This article was written by Nicole Laidler. Nicole is a Western University graduate, BA '03, MA Journalism '04, and an award-winning journalist and content creator. To see what else she’s been writing lately visit www.spilledink.ca.

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