Published on the 29/04/2022 | Written by Heather Wright

But A/NZ is lagging behind…

Company executives are leaning into increased use of digital to drive sustainability outcomes and provide a competitive advantage for their businesses, but despite an apparently strong belief that digital sustainability is the way to go, there’s a lot of work to be done in A/NZ. 

“Never has the impact of technology on the community and sustainable innovation been more relevant and more necessary.”

The Asia Pacific Digital Sustainability Index, developed by the University of Auckland Business School’s Centre of Digital Enterprise working with Tata Consulting Services, shows 87 percent of company executives surveyed believe digital sustainability – the creation, usage and governance of digital resources to maximise value for business, the environment and society – will deliver a competitive advantage for their business. So sold are they that 88 percent of those surveyed anticipate an increased use of digital resources, systems and platforms to drive sustainability outcomes in the next three years. 

“Never has the impact of technology on the community and sustainable innovation been more relevant and more necessary,” says Ilan Oshri, co-author of the report and director of the Centre of Digital Enterprise.

The Digital Sustainability Index highlights the digital transformation undergone during Covid and how it has enabled businesses to continue operating in ways that wouldn’t have been possible even a decade ago. 

“Digital also gives us enormous potential to deliver solutions to address systemic societal and environmental challenges at scale.

“Digital sustainability means that this same digital core that is helping transform operational cost optimisation, customer centricity and differentiation is becoming a key enabler to organisations meeting their sustainability goals and targets. And so, we have digital applications enabling financial inclusion, digital tools supporting conservation, digital platforms and data driving more sustainable agriculture, digital communities supporting the under-served with health access, and many more.”

It cites examples including one of the largest consumer packaged goods companies deploying a greenhouse performance system for better tracking and management of its supply chain carbon emissions to meet its climate pledge and reduce operational expenses around offsets and carbon taxes; and an industrial manufacturer’s blockchain-based B2B marketplace for re-manufactured parts providing the foundation for a circular economy. 

But while Thailand and Vietnam are leading the region in adoption and deployment of digital sustainability tools, New Zealand and Australia are lagging, with Kiwi enterprises in particular falling behind many of their APAC counterparts in utilising the digital assets needed to solve current and future sustainability challenges. 

In the 14 month long study which surveyed 195 company executives in companies with revenue of US$25 million+, across 10 APAC countries, not a single Kiwi company was classified as one of the 53 market leaders – the top 27 percent of companies in the survey. Around 15 percent of Australian companies were in the leader bracket, with a further 60 percent classed as ‘strategic players’ – a category where New Zealand got in on the act with 55 percent of companies deemed strategic players.

Nearly 40 percent of Kiwi companies were in the ‘explorer’ category, with nearly 10 percent languishing as ‘experimenters’.

Oshri says that poor showing puts New Zealand ‘at an international disadvantage’.

He says there is a clear need for the government to coordinate a strategy that harnesses digital assets to achieve societal and environmental sustainability objectives. That strategy should be formulated in conjunction with professional bodies, enterprises and education institutions, he adds. 

Budget limitations were cited by Australian and New Zealand company executives as a key inhibitor for the adoption of digital sustainability.

Globally 70 percent perceive a lack of in-house knowledge is holding them back on digital sustainability pursuits, with 80 percent saying a clear lack of ROI is an inhibitor.

The drivers though are there. Along with the belief that digital sustainability can deliver a clear competitive advantage is increasing demand from boards, regulators and investors and improvements in transparency, decision making, employee communication and proactiveness towards change are expected to accelerate the adoption of sustainable practices, according to respondents in Australia. 

Reputational impact figures high too: A full 80 percent said their reputation in the market has improved as a result of digital sustainability initiatives. 

When it comes to the top sustainability goals, the divergence between Australia and New Zealand was clear: While efficiency gain and cost savings topped the list for Australia, New Zealand’s key focus, interestingly, was employee health and safety incidents. 

Sustainable/social procurement/sourcing, the reduction of resource consumption and then employee health and safety rounded out Australia’s listing, while in New Zealand it’s reduction of resource consumption, efficiency gains and cost savings and reduction of greenhouse emissions.

“There are companies throughout Asia Pacific that are already embracing and leveraging digital technologies, platforms and tools as enablers to deliver measurable results – not just in terms of social and environmental benefits, but also economic,” the index says.

“But there is a lot more to be done. We need future focused leadership to harness digital sustainability across businesses and use purpose and technology to push the boundaries and create new paradigms.”