Digital sustainability: why business should take an ‘ecosystem approach’

The metaphor of a biological ecosystem can help businesses navigate complex, interconnected networks to drive digital sustainability, says UNSW Business School’s Barney Tan

Technology and the global shift towards sustainable business models are becoming increasingly linked, necessitating organisations to form a comprehensive strategy that leverages technology to propel sustainability initiatives forward. To help them achieve this, one expert has called on business leaders to take an “ecosystem approach” to digital sustainability, a concept inspired by the intricate dynamics of biological ecosystems.

In a recent talk at the World Business Forum in Sydney, Professor Barney Tan, Head of School and a Professor at the School of Information Systems and Technology Management (ISTM) at UNSW Business School, shared insights into the crucial realm of digital sustainability. As a leading expert in the field, Professor Tan provided a unique perspective on the intersection of technology and sustainability, emphasising the need for a collective approach in the digital ecosystem.

Business ‘networks’: what role does your organisation play?

First of all, what is digital sustainability? According to Professor Tan, the concept revolves around leveraging the potential of digital technologies to enhance the efficiency and effectiveness of achieving sustainability goals. It means using technology to support sustainability efforts, considering economic, environmental, and social aspects.

It’s no secret that the pursuit towards the global sustainability goals set by the United Nations in 2015 has been slower than anticipated. And so, one might understandably question the term “digital sustainability” as it may initially appear contradictory. However, as defined by Professor Tan, digital sustainability revolves around using technology to ensure the success of sustainability initiatives. This broad concept aligns with economic, environmental, and social sustainability principles.

Read more: Building a greener future: how Lendlease manages sustainability

Of course, digital technologies have environmental consequences. And in a world where technology plays an ever-increasing role, it becomes imperative to consider its impact on sustainability. A quick Google search reveals how information and communication tech contribute to 2.1 to 3.9 per cent of global greenhouse gas emissions, for example – highlighting the environmental impact of technology.

But as the global call for environmental stewardship intensifies, organisations are being called on to adopt innovative strategies beyond mere compliance, emphasising the imperative of a concerted effort towards sustainable technological advancement. To achieve this, Professor Tan emphasised the importance of adopting an ecosystem perspective in the context of digital sustainability.

“We all know nowadays that business competition is not firm versus firm. It's typically networks versus networks… so if you want your entities within your business network to work towards digital sustainability, you need to treat them as if they are entities within an ecosystem,” explained Professor Tan. “The ecosystem perspective acknowledges that entities within a network may not always act rationally or coherently, and their self-interest needs to be considered in promoting collective action for digital sustainability."

What does an ecosystem approach look like in the business context?

Taking the network strategic framework places a premium on collaboration, adaptability, and creating shared value within business networks. Recognising the urgency of integrating sustainability initiatives at the organisational level, Professor Tan explained this approach advocates for a holistic perspective that addresses environmental concerns and fosters a symbiotic relationship between technology and sustainable practices.

Crucial to adopting the ecosystem effectively is to understand your organisation’s role (and your own role) in the context of the wider business ecosystem. “Your roles are fluid. Sometimes, you have to provide for the entities within your ecosystem. At other times, you may need to be a predator that weeds out the undesirable elements in your ecosystem,” explained Professor Tan.

“Within the ecosystem, you must understand that roles are fluid, even if you're a keystone entity. Whether you're an engineer, a mutualist, a predator, or prey, you need to look at what the conditions are within the ecosystem and take on the appropriate role given the contextual conditions.”

So, if you want the digital sustainability initiative to work, are committed to digital sustainability and would like to channel your network towards digital sustainability, then you need to look for ways to identify your role and become a “keystone” entity within their business ecosystems.

Learn more: A data-driven system that optimises sustainability initiatives and investments

Professor Tan explained that a “keystone” in a business ecosystem is simply a central player with a significant impact. A keystone species plays a crucial role in balancing a biological ecosystem in ecology. Similarly, in business, a keystone organisation greatly influences the overall health and success of the ecosystem, explained Professor Tan. So, organisations should strive to become keystones by taking on essential roles like “engineers, mutualists, predators, or prey” contributing to the ecosystem's sustainability and success.

Professor Tan reiterated that to be successful, businesses must shift from a traditional competitive mindset to a network-oriented approach to ensure digital sustainability, where the idea of an ‘ecosystem’ comes into play.

“Metaphors are very powerful because they inspire action. And why is the ecosystem metaphor here important in the context of digital sustainability? Because we're trying to underscore that we're all in this together,” he said.

“So that metaphor sort of sensitises us to looking at our business network in a certain way, to inspire action.”

Overcoming challenges to digital sustainability calls for collective action

In essence, digital sustainability aims to use technology for societal benefit without compromising the needs of future generations. Professor Tan emphasised, “Digital sustainability is about unleashing the power of technology to generate social good.” While acknowledging the negative aspects of technology, he highlighted its potential for enhancing sustainability efforts.

Professor Tan shared real-world applications of digital sustainability, emphasising climate risk management and initiatives at UNSW, Sydney. Technologies like smart grids and IoT-driven solutions contribute to informed decision-making in various sectors.

Addressing cost concerns, Professor Tan stressed that technology is the key to sustainable practices. Tools like drones and artificial intelligence enable a comprehensive understanding of environmental issues, with the challenge lying in ineffective data interpretation for targeted investments.

Contrary to the belief that sustainability is “costly”, Professor Tan urged companies to embrace technology. In an era of valuing social responsibility, sustainable practices align with ethics and offer reputational advantages.

Subscribe to BusinessThink for the latest research, analysis and insights from UNSW Business School

Sustainability, he asserted, should be viewed as an investment rather than an isolated expense. Drawing on his own and past research, Professor Tan identified successful companies as those engaging in sustainability with the ability to adapt. He acknowledged social media's role in spreading awareness but cautioned against its potential to polarise views.

Stressing the importance of collective action in digital sustainability, he encouraged a nuanced understanding of ecosystem dynamics, where organisations adapt to the interests of their partners. His talk concluded with a call to action, urging individuals, business leaders, and organisations to come together for a sustainable digital future.

Professor Tan said: “Sustainability problems are all wicked problems that no single entity, organisation, or country can solve in isolation. We need the ecosystem perspective because we're all in this together, and must work closely to solve these problems."

The World Business Forum was held at the ICC Sydney Sydney from 11 to 12 October 2023. UNSW Business School was an academic partner for The World Business Forum in Sydney.

The UNSW Digital Sustainability Knowledge Hub provides research solutions in digital sustainability to assist organisations in improving ESG outcomes and communities in deploying future-ready digital technologies. For more information, please contact Professor Shan Pan.