Sustainability is the new digital frontier: Bain & Co

Sustainability and digital transformation go hand in hand and can be seen as the "new digital" according to Karsten Fruechtl, digital practice leader and partner at Bain & Co.

Fruechtl told Digital Nation Australia, “We see so many parallels here, quickly disrupting established industries. Both are increasing consumer demand and opening up opportunities for value creation.”

Because of this, he said there is an opportunity to learn from the digital revolution.

“One of these learnings is that many companies that face the digital disruption have applied a two-speed response to the disruption,” Fruechtl said.

“A range of measured and today forward improvements, combined with much more radical future back improvements. An example of the former is making your existing product or service more digital, like connecting today's cars to online services.

“An example of the latter is around completely reimagining your business model to who you are as a company, for example, as a mobility service provider.”

Brian Murphy, digital practice leader for sustainability and responsibility at Bain & Co said sustainability can be used for a wide variety of strategies and value creation.

He said, “Digital plays a role in both defensive or risk-oriented opportunities, as much as it does the value creation opportunities, if not more.

“The foolproof winning strategy, if you're a digital sustainability provider is to be directly enabling the real sustainability swords of your client, as well as the shield. That's where the real leverage for digital is in their sustainability agenda."

When discussing sustainability, Murphy said leaders need to consider social and governance factors as well as environmental factors.

“When we talk about automation, we talk about robotics, we talk about remote work and remote operation that clearly has an impact on jobs. There's a reskilling imperative and there's a community impact for many of our industrial companies in Australia,” Murphy said.

“The notion of a just transition becomes really important when we're talking about accelerating the digital agenda in a sustainability sense.”

There are also governance issues as well, Murphy explained such as data privacy, data security, the ethics and integrity of automation, and AI.

“One of the longer-term trends we're seeing in sustainability is the focus today is around the environment and climate change. But another habit we see in the leaders is they are paying more attention to the people and the impeccable business or governance opportunities.

“We will see more of those risks for digital manifest themselves,” he added.