Digital ESG: Why Sustainability Should Be a Transformational Goal

“We know exactly what is needed and we have the tools,” said António Guterres, secretary-general of the United Nations, in his recent keynote speech at Economist Impact’s annual Sustainability Week conference. “These transformations are the right thing to do. They're also the smart thing to do. They can drive investment, innovation and foster more sustainable profitability, productivity, employment and growth.”

While few would argue with Guterres over the sentiment of his speech, the challenge facing so many businesses is where and how to prioritize investment. When it comes to sustainability and digital transformation, it can be difficult to know where and how to make the biggest impact. But there’s no doubt that an impact can be made.

A boost for ESG and CSR

The good news is that a lot of businesses now recognize the value of sustainability measures, such as

environmental, social and governance (ESG). According to a new Deltek report, Trends and Insights for Architecture, Engineering and Consulting Firms, three-quarters of organizations now place more importance on ESG than they did at the start of 2022, with 26 percent claiming it is now significantly more important.

Part of the pressure for this is supplier compliance. Deltek says that 57 percent of firms claim they are only planning to do business with socially responsible companies from now on. Interestingly, engineering firms (76 percent) are more likely than consulting firms (65 percent) to have increased the importance of ESG and corporate social responsibility (CSR) issues since last year.

“By tracking trends in KPIs, digital transformation strategies and robust CSR initiatives, firms can be more informed on what is impacting their bottom line, be agile enough to adapt to address any potential threats or seize opportunities and have in place the credentials to future-proof their business,” said Neil Davidson, group vice president for the Professional Services Sector at Deltek, in a company press release.

Clearly one of the most potent areas for any engineering firm to focus on is energy consumption. It’s one of the key drivers in the shift towards cloud computing. Running a data center is becoming an increasingly specialist business with volatile energy pricing, pushing co-location and cloud-based providers into bulk buying energy deals. If you’re still running your own data center, you may recognize the pain.

As Atlantic Ventures suggests in its 2022 report Improving Sustainability in Data Centers, the data center industry has already “delivered significant energy efficiency improvements over the past decades, and it is now one of the most advanced sectors in terms of energy efficiency and decarbonization. Nevertheless, the required energy demand is still very high and results in large amounts of carbon dioxide emissions.” It’s still something of a trade-off, and clearly there is more work to be done—but cloud-based infrastructures and systems are, as Gartner suggests, still accounting for the bulk of digital spend this year.

Getting rid of data waste

For Matt Watts, chief technology evangelist at NetApp, this is tied into the idea of data waste. Engineering firms using a myriad of digital tools may recognize the scenario whereby poor data management is hurting project speed and collaboration.

“From an ecological standpoint and a financial standpoint, the extent of data waste is astonishing,” Watts told engineering.com. “Up to two-fifths (41 percent) of data is unused or unwanted, whether due to being trapped in isolated systems, conflicting formats, or simply serving no purpose beyond its original creation. The repercussion of this unnecessary data is that businesses are spending budget and emissions on storage and energy consumption when they don’t need to.”

Watts says that engineering organizations must actively cultivate their digital presence and assets and “foster a data-driven culture, that they can establish an ecosystem that promotes the effective utilization of digital technology.”

Again, it comes down to prioritization. It’s not really a case of digitally transform and the data will flow, it’s a case of understanding where in the organization there are going to be bottlenecks and where to focus investment to reduce waste, improve performance and at the same time reduce emissions and energy use.

Re-imagining design and production

Christophe Vidal, VP global head of digital manufacturing at Capgemini Engineering, says that for any engineering firm it is about having a clear set of business and sustainability goals and seeing how digital transformation can then deliver on those goals. He talks about life cycle analysis (LCA), digital twins and digital continuity processes, the aim being to identify the technologies and tools to fit the specific needs of the organization through sustainable technologies and sustainable design practices.

“Capgemini is committed to reducing our clients’ CO2 emissions by 10MtCO2 by 2030 through a five-pillar action plan,” Vidal told engineering.com, adding that it’s not just about identifying where energy is being wasted, for example, it’s also about addressing and improve those areas—including in the supply chain—and committing to ongoing measurement of project and product performance. He gives an example of how Capgemini has teamed-up with Intel to improve 5G network energy performance.

Called Project Bose, this venture aims to develop a more sustainable 5G network with machine learning, as data analytics predicts user locations and boosts signals in real-time in that specific location, rather than boosting the signal widely. This, says Vidal, saves energy in the radio access network (RAN), thanks to its efficient optimization of phone signals.

This is an example of what Christina Rebel, co-founder and chief growth officer at collaborative manufacturing platform Wikifactory, would refer to as “reimagining design and production,” although she refers primarily to manufacturing. For Rebel, this is an opportunity for engineering businesses to evolve and grow.

“The transition towards sustainable practices that significantly reduce resource consumption, limit waste, and curtail carbon emissions, goes beyond mere recycling or reusing materials,” Rebel said to engineering.com. “It’s about reimagining design and production for on-demand manufacturing, reassembly, and circularity from the very beginning.”

Rebel adds that “supply chains are a crucial piece of this puzzle,” but the solution is broader than recycling and reuse. Engineers now have the capacity to optimize their designs for smart manufacturing, she says, “potentially leading to a substantial reduction in material use.”

For Rebel, this also means thinking more local where possible, to reduce carbon emissions associated with global transportation. The Wikifactory platform enables this by providing an environment that looks to streamline collaboration and manage complex CAD files across diverse engineering teams. The aim is to enhance productivity while at the same time reducing unnecessary waste of resources.

Sustainability through simulation

Of course, one of the most familiar transformational areas for engineers is simulation. We are growing used to the idea of digital twins, for example. This is shown by firms such as Hexagon, which has built a complete digital twin of Stuttgart in Germany, using sensors to collect data and optimize planning and services to promote sustainability and efficiency. Not only is the digital twin a more sustainable and productive way of designing and managing a project, it can also deliver on sustainable goals for clients.

Another simulation company called DSD uses a variety of modelling and analysis tools to simulate how subsystems perform and interact before clients move too far into the resource and cost intensive prototype manufacturing phase. DSD has entered into a joint operating agreement with Alvier Mechatronics, an engineering service company, to expand its sustainability initiatives, including minimizing dependency upon rare-earth materials.