Digital Green Revolution: Transforming Sustainability to a Low Carbon Future

It was in September of 2021 when the U.S. Securities and Exchange Commission (SEC) proposed a rule wherein companies need to disclose certain climate-related information, ranging from greenhouse gas emissions to extended climate risks to transition plans. The proposed rule may come into effect this Fall. These regulations fall under the broader Environmental, Social, and Governance (ESG) disclosure requirements category. This proposal suggests that a low-carbon economy is an urgent need. A low-carbon economy strives to minimize carbon emissions and the environmental impact across all sectors, including energy, transportation, manufacturing, and agriculture while fostering sustainable economic growth.

In the last few years, digital transformation has emerged as a potent tool capable of accelerating the transition to a low-carbon economy. Implementing advanced technological solutions is estimated to lower emissions by over 15 percent of the necessary 50 percent carbon reduction target by 2030. Digital transformation encompasses the integration of advanced technologies, such as data analytics, automation, 5G, cloud, artificial intelligence (AI), big data, machine learning (ML), blockchain, and Internet of Things (IoT), to revolutionize industries, optimize processes, and drive innovation. Adopting smart grids, increased use of renewable energy, autonomous/electric vehicles, and eliminating wasteful practices are sustainable solutions to usher in a low-carbon economy.

Approximately 30-35% of the total greenhouse gas emissions come from the energy supply sector, which includes electricity, heat, and other forms of energy. Industry holds the largest share in the contribution of global emissions.  Digital solutions, such as a smart grid, can help reduce costs and lower the environmental impact. A smart grid is an electricity network that uses IoT sensors and real-time data analytics to monitor and manage energy distribution efficiently. The technology facilitates load balancing, renewable energy integration, and predictive maintenance, which reduces energy waste and emissions. 

Is the adaptation of Digital technology to achieve low-carbon emissions fast enough?

While many companies are leveraging digital technologies to reduce carbon emissions and achieve sustainability goals, there are several reasons why some companies may need to be faster to adopt these digital technologies. Some of these reasons are – Lack of Awareness, complexity, costs, and their inability to integrate Legacy systems with newer digital technologies. Some companies have regulatory barriers, data security, and privacy concerns. Companies often focus on short-term profitability and are less inclined to invest in digital technologies. Also, organizational resistance to change sometimes slows down digital transformation efforts. It is also seen that there are data silos within organizations that can hinder the effective use of digital technologies for carbon reduction.

Despite all the challenges, it is essential to note that many companies are actively working on digital transformation initiatives to reduce carbon emissions. The growing awareness of climate change and the potential for regulatory changes, coupled with the benefits of sustainability in terms of cost savings and customer demand, are driving more companies to explore and implement digital solutions for achieving low carbon emissions. The pace of adoption is slower, with the target of achieving 50% carbon reduction by 2030.  The advancement of technology, increased funding for sustainable initiatives, and evolving industry standards are helping to increase the pace of digital solutions adoption in sustainability.