Many organizations have accelerated their digital transformation initiatives since 2020. But how many leaders have managed to create a sustainable digital pace focusing on being a force for good, putting people and the planet at the core of their digital transformation strategy? 

It’s common sense that digital leadership tends to think of digital transformation in terms of the technology stack, business outcomes, automatizing processes, and impact on customers. But I think that they often overlook the incredible disruption they can have regarding their impact on society and the planet! To make this clear, by leadership impact I mean redirecting CAPEX and OPEX toward sustainable projects, aligning digital transformation strategy with purpose, and a new leadership “impact for good” mentality. Because a better future needs better leaders, not only governments incentivizing sustainable activities, customers showing a preference for sustainable products and services, or employees demanding better work-life balance.

My take is that leaders need to align their digital transformation and sustainability objectives, and their decisions need to be based on a shift towards regenerative “fitted for the future” ecosystems because, in the sustainability and digital revolutions, no company will be left unchanged. Who could envisioned a few years ago that there would be a large demand for plant-based burgers? Or that electric vehicles would disrupt the automotive industry? Unlike the last major world economic crisis, in which many predicted that companies would deprioritize sustainability as a nonessential component, we are living in the era of socially conscious and environmentally friendly impact. Sure, that the pace for disruptiveness will be different for each industry, but there’s no way back! Consumers, employees, and governments demand more action from leaders and their corporate strategies.

According to McKinsey, it’s estimated that the value unlocked by AI in helping design out the waste for food could be up to $127 billion a year in 2030 when used as a tool to accelerate Circular Economy processes. AI can indeed be used to solve some of society’s toughest problems. Can help us make do several things better, decisions faster, reach more people with the information they need. It can also give us the insights we need to predict, prevent, or minimize the impact of some of the worst things from happening. During this pandemic, companies have been forced to digitize their business to protect employees and serve customers facing mobility restrictions. Millions of people altered their social and economic habits, shifting many activities and buying behavior to online. 

As artificial intelligence plays a more central role in business and society, should not be viewed strictly as a defensive maneuver, but also as a source of value. By incorporating AI at an organization’s authentic purpose, companies can build trust, improve customer loyalty, and enhance revenues. Why? Because customers are increasingly choosing to do business with companies whose demonstrated values align with their own. Companies with a strong sense of purpose are more than twice as likely to generate above-average shareholder returns, as BCGs research shows. 

This rapid migration to the digital world will fast-forward the deployment of AI, for sure. But until now, AI applications for industries and their adaptation for sustainability purposes have been relatively limited (optimizing existing processes such as minimizing energy use, time, and similar optimization strategies). Better than nothing, I agree. Using AI at the core of a digital transformation strategy can transform industries well beyond process optimization and radically disrupt markets! 

Companies are investing in digital transformation initiatives to invent new business models and drive efficiencies in their business. But is it enough doing this? Is it not, more or less, the same old equation that is focused on customers, and/or investors, but ignores, at its core, the Planet and the unavoidable necessity for companies to be a force for good? 

I believe digital transformation is an extraordinary enabler in changing our world, aligning with the UN’s 17 SDGs. I also believe leaders need to develop frameworks that can bring to life AI-based solutions for the SDGs, applying AI to innovations in their industries, impacting all links in the value chain. But above all, the world truly expects leaders to create an inclusive sustainability culture with empathy (and a true sense of responsibility), addressing and developing new economic opportunities that are inclusive of all social classes without exception and doing this to empower a sustainable future for all. As the UN Secretary-General recently said, "our Planet is not in a good position, and we need to take action!”. 

A purposeful and lasting action, I would add, because although relevant, digital transformation alone is not sufficient for stakeholders’ value creation. Leaders in all companies need to demonstrate adaptive skills, think faster, react socially in the context of their surroundings, collaborate beyond organizational and geographic boundaries, identifying partnerships enabled by digital tools that leverage their sustainability impact and extend their sociality!

I’ll end as I’ve started: if digital transformations of today must be purpose-led, delivering success for all stakeholders as a requisite, how many leaders do you know that have changed themselves and managed to create sustainable digital pace focusing on being a force for good, putting people and the planet at the core of their digital transformation strategy?!

Have a great and impactful week!

Nuno Neto 
Executive-In-Residence 
Center for Responsible Business and Leadership

This article refers to edition #107 of the "Have a Great and Impactful Week" Newsletter.
Subscribe here to receive the weekly newsletter