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ESG and Sustainability: saving the planet with technology


Enterprises around the world are focusing an increasing amount of attention on sustainability, often as part of a set of formally adopted Environmental, Social and Governance (ESG) goals. This dynamic is driven both by consumers who are increasingly favouring companies that can demonstrate sustainable business practices and the financial community prioritising investment in firms with good ESG credentials.


Environmental considerations are a key part of any ESG framework, with companies often aiming for ‘carbon neutrality’ (or better) and to preserve scarce resources.

Sustainability and digital transformation

Transforma Insights believes that disruptive new technologies, under the umbrella of ‘Digital Transformation’, including Artificial Intelligence (AI), Internet of Things (IoT), Edge Computing, Robotic Process Automation (RPA) and Additive Manufacturing, will be absolutely critical in meeting ESG goals. In particular they have a very strong role to play in reducing CO2 emissions, minimising the consumption of hydrocarbon fuels, lowering energy use, and protecting water resources.

In recent studies, such as the report ‘On balance, IoT is very beneficial from a sustainability perspective’, the Transforma Insights team has closely examined the likely impact of all of these technologies on areas of environmental concern. In total, these new Digital Transformation technologies such as AI and the IoT will save approaching 1.8 PWh of electricity in 2030, and an additional 3.5 PWh of (hydrocarbon) fuel use, resulting in total savings of 5.3 PWh of energy. Offset against this benefit is 653TWh of electricity consumption required to power solutions deployed using new technologies.

For comparison, the total electricity consumption of the global ICT industry is forecast to increase to around 8 PWh by 2030, meaning that together new technologies will generate energy savings equal to around 58% of the total power consumption of the ICT industry.

The ’Clean Dozen’ initiatives that will drive sustainability

Based on an analysis of the sustainability impact of all emerging Digital Transformation use cases, Transforma Insights has identified a ‘Clean Dozen’ solution areas that can help organisations achieve sustainability goals:

  • Fleet Operations, including a range of applications associated with the efficient operation and maintenance of vehicle fleets.
  • Supply Chain includes a range of applications used to improve the working and efficiency of supply chain operations such as sourcing, logistics, transportation, warehousing, manufacturing and production.
  • Smart Cities comprises of wide spectrum of smart city applications ranging from street lighting control to traffic management and parking space monitoring.
  • Smart Public Transport, solutions that enable tracking of buses, assets that are part of sharing schemes (such as bikes, e-scooters, cars).
  • Smart Buildings, technologies used to monitor and control the uses of resources (such as electricity, heating, cooling, water) in a building.
  • Smart Grid, including all aspects of grid operations, energy generation, smart metering, transmission and distribution.
  • Campus Microgrids refers to a network of distributed energy resources (DERs) for managing electricity flow in a campus location.
  • Remote Monitoring & Maintenance includes a range of applications for remote monitoring and maintaining the condition of machines.
  • Smart Healthcare, solutions used to remotely monitor the health of people.
  • Drone-based Solutions, solutions that enable efficient maintenance and monitoring of infrastructure in buildings, wind farms with drone-based inspection.
  • Smart Agriculture includes a range of applications used to make farming methods more efficient while increasing yield.
  • Efficient Operations, other technology use cases that contribute towards sustainability initiatives but that are not related to IoT.

The dozen solution areas account for use cases with significant impact on electricity consumption, (hydrocarbon) fuel consumption, water usage, and CO2 emissions, collectively representing the main measures of sustainability. In addition, we have also analysed the often-extensive benefits that these solution areas can bring to meeting wider ESG goals, as well as the parallel benefits that they might bring in driving a positive business impact.

The full list of solution areas, together with indicative assessments of their impacts in terms of CO2 emissions, (hydrocarbon) fuel savings, electricity savings, water savings and other ESG and business benefits is shown in the figure below.


While the ‘Clean Dozen’ solution areas were defined on the basis of their potential contribution to sustainability goals many of the dozen have wider ESG and business benefits. Wider ESG benefits range from reduced food wastage and reduced pollution through to the use of Supply Chain solutions to establish the provenance of goods in the supply chain to reduce fraud and ensure that, for instance, child labour has not been used anywhere in the supply chain. Many business benefits flow naturally from a reduction in the use of resources (electricity, fuel, and water) but extend to the potential for more efficient operations overall.

Each of these solution areas is unpicked in detail in our 112-page ‘Sustainability Enabled by Digital Transformation’ report (published July 2022).

Sustainability and IoT

The vast bulk of the savings that will be achieved through the deployment of new emerging Digitally Transformative technologies are related to IoT-enabled applications, which together account for in excess of 95% of both electricity and fuel saved. This is due to the fact that IoT represents the interface of new technological environments to the ‘real world’, and it is in the real world where most energy is used and most savings can be made.

The relationship between new technology and sustainability is complex, with certain solutions such as (IoT-enabled) televisions supporting on-demand content mostly simply contributing to eWaste and power consumption (for local content engines, remote servers, and connectivity), while other solutions such as road vehicle fleet management and heating, ventilation and air-conditioning (HVAC) systems also have associated benefits in terms of fuel and/or electricity consumption. This relationship, illustrated in the figure below, is, with few exceptions, consistent across all new technology deployments: the net impact of new technologies in manufacturing, distribution, and end-of-life phases is generally negative (with some exceptions, such as shared car schemes reducing the total number of cars manufactured), while many solutions generate a net benefit during live operations.


When viewed from this perspective, the difference between consumer and enterprise becomes quickly apparent, with many consumer solutions such as IoT-enabled Audio-Visual devices generally having a negative impact at every step of the process, while many enterprise solutions will result in significant sustainability benefits during their Operation phase.

In the case of IoT-enabled solutions, the underlying dynamic is that many consumer devices are intended to deliver an enhanced value proposition to consumers, while enterprise solutions are generally deployed based on a business case analysis and expected net economic benefits. Exceptions to this rule include sophisticated HVAC systems, building automation, and smart lighting, which generate sustainability benefits irrespective of whether they are deployed in a consumer or enterprise context. Given these dynamics, it is not surprising that savings from enterprise account for 95% of electricity savings from all IoT solutions.

Beyond energy savings, water scarcity was listed in 2019 by the World Economic Forum as one of the largest global risks in terms of potential impact over the next decade, and a small number of IoT applications (mostly in the agricultural sector) will result in net savings of 230 billion cubic meters of water in 2030.

Sustainability and non-IoT Digital Transformation

The impact of new emerging technology-based solutions that do not include IoT-connected devices is more of a mixed bag than the impact of IoT-enabled solutions. However, two clear groupings emerge when analysing CO2 impact (which combines both electricity and fuel impact into a single measure).

At the Use Case level, it is the most widely adopted, processing intensive, non IoT-enabled applications that are intended to improve compliance or reduce risk that are most costly in terms of net CO2 emissions. Use cases like Fraud detection (accounting for 0.67 megatonnes of net CO2 emissions in 2030), Risk Analysis (0.29 megatonnes), and Threat Detection (0.24 megatonnes), are all valuable from an end-user perspective, but they are processing-intensive and generally achieve little in the way of tangible results (from a sustainability perspective).

Conversely, some applications of (non IoT-enabled) emerging technologies are significantly beneficial in terms of net CO2 impact, with the most beneficial use cases tending to involve interaction with real-world physical processes. For instance ‘x as-a-service’ (accounting for 2.6 megatonnes of net CO2 emissions savings in 2030) includes the proactive and pre-emptive maintenance of assets to ensure that they operate efficiently and do not break down. This saves on remedial maintenance trips, and improved condition monitoring of these assets enables more maintenance to be undertaken during routine service visits. Inventory Management (1.7 megatonnes), Transportation Optimisation (1.1 megatonnes), and Supply Chain Audit (1.0 megatonnes) all include in some way improving the efficiency of physical distribution networks, and so reductions in fuel use.

What is particularly interesting is that investment in new technology tends to result in costs in terms of electricity consumption (to power the solution), often offset by some level of savings in terms of electricity consumption but more significantly savings in terms of (hydrocarbon) fuel consumption. This is an important dynamic, since it is much easier to source electricity from sustainable sources than it is to source (hydrocarbon) fuel from sustainable sources: i.e. the simple substitution of hydrocarbon fuel consumption with electricity consumption is beneficial from a sustainability perspective.

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