A wave of digital sustainability innovation will sweep through in the next 20 years, but New Zealand is lagging on the uptake and creation of digital sustainability tools, says the University of Auckland Business School’s Ilan Oshri.
New Zealand, according to Ilan Oshri, director of the Centre of Digital Enterprise (CODE) at the University of Auckland’s Business School, is in something of a bind. That the systems that underpin the world of business and enterprise need to change in response to – and mitigation of – a changing climate is in no doubt. And in Aotearoa, Oshri says, where the economic landscape is dominated by small-to-medium-sized enterprises highly reliant on working with each other and with overseas counterparts, that change will need to be underpinned by partnership – something he says is “far more important [here] than in other countries”. “Unfortunately,” he says, “New Zealand companies are not so great when it comes to partnership.”
With the goal of assessing just how ready – or not, as the case may be – New Zealand and its Asia Pacific peers are for the coming challenges, Oshri and CODE, in partnership with Tata Consultancy Services, last year published the Digital Sustainability Index. The concept of digital sustainability, says Oshri, is “a big umbrella… saying that basically any digital asset should be considered as a tool” in the fight for sustainability. The Index itself, based on the responses of 250 organisations around Asia Pacific, is a way to “understand the relative readiness of countries and organisations to marry digital with sustainability”.
And on that front, Oshri says, New Zealand is unfortunately, “lagging when it comes to the analysis that we have done”. Part of what the country can do to redress that lag, will be to get over what Oshri calls “a kind of a Kiwi syndrome” – our propensity to look inwards for solutions and to distrust those from outside or abroad. “We’ll have to accept that there is an opportunity here to take on solutions that exist in the market and adopt them to start doing this properly.” To trust, in other words, in the benefits of partnership.
The country will be guided in its transition by top-down directives, particularly in the case of net zero ambitions, which has been the initial sustainability focus for many companies around the world: 33%, Oshri says, have set up net zero goals. From January 24 next year, around 200 New Zealand entities – banks, insurers, large publicly listed companies – will be legally required by the External Reporting Board (XRB) to report their carbon emissions, including those that come from offshore supply chains. Because of the nature of the New Zealand economy and those it interacts with, this may prove difficult. “Some countries,” he says, “particularly in Asia, we will find it’s going to be a lot more challenging to get accurate reporting on their emissions.” And, as he says, the rational jumping off point for digital sustainability has to be the deployment of digital tools in the measuring of environmental impact. “First of all, measure. Then manage. Then obviously understand what kind of performance you can deduct from that.”
The real change, he says, will need to come from within organisations themselves. “The struggle is always that existing enterprises have to basically accommodate sustainability into a very fixed mindset that has been driven by profit margins on a quarterly basis for many years.” Often sustainability is yet to be organically folded into the processes of business – and in many cases clashes with financial objectives, in which case the tendency is usually to revert to how things have customarily been done. “In most cases,” Oshri says, based on his interviews with the boards of international blue chip companies, “you will try to meet your business KPI and go soft on your sustainability KPI. Hardly any organisation will give you a bonus for meeting your sustainability KPI; you will get a bonus for meeting your business KPI.” Given the scale of the changes needed, Oshri admits that’s “not very promising. It should change and hopefully it will.”
That shift is being seen in companies and sectors across Aotearoa that are beginning to align with more concrete sustainable outcomes – and realising this doesn’t always come in the way of profit. In fact, for innovators in this space, digital sustainability is an industry ripe with opportunities to make large-scale change.
And New Zealand has had huge success with this type of innovation. It’s creating products and services that add to the Internet of Things (IoT), and using emerging tech to solve challenging problems, from the monitoring of livestock to AI that could help flood management efforts.
For New Zealand to truly get on the digital sustainability boat, we need to find the balance between continuing to innovate in this space, and more readily adopting the relevant technology that has already been created overseas.
One of the barriers to the wide scale uptake of these technologies is its current high cost – but Oshri doesn’t think this will stay a barrier forever.
For now, the digital solutions available are what Oshri terms “emerging”. It is just in the last three years that the majority of the world, he says, has begun its journey towards net zero emissions, and the tools that may aid in the fight for sustainability in the future, “AI and so on… it is probably five or six years down the road that we will see those tools coming into effect.” In that longer term, though, Oshri does see cause for optimism. The pandemic years, with its “massive spike” in the digital transformation of businesses as they moved en masse to the cloud, offers something of a roadmap for a future in which digital solutions are applied to the problems of sustainability. “The emergence of clean tech is going to create basically a whole new line of innovations that are in and of themselves technologies that are designed to be clean. And that will basically build a whole wave of innovation that will be dominating the globe, I guess, in the next 20 years or so. Not currently, because currently these are startups, but in 20 years time they’re going to be the next Google or the next Apple.
“That’s where I’m optimistic that we are going to see prosperity coming from sustainability.”
