Digitalization and Sustainability
SINGAPORE – There are several views on science and technology to solve the challenges of sustainability. One of them is that the present risk prevention approach finds answer to all aspects of life through science and technology. When such risks are not prevented there are opposite views to it. Similar apprehension is perceived on the digitalization to privacy. Normally with the premise, man has found science and technology to win over nature and human problems but there are risks and challenges in consequence of it. The post-modernism is the discovery of promises and expectations ignoring reality in future. Man learns slowly when the results of science and technology have supervened the essence of human life. This is another pessimism surmounted on the rationality of human behaviour. The success is the mother of denial and failure to prosecute human excellence to prevent risks and failures. It is a continuous process of preservation. This is the positive thinking of human knowledge and skills. Science and technology are the cornerstone of human history as the human evolution is the answer of Darwinism in which the dynamic force is invisible but vibrant. The risks are the consequences of continuity where there is no risk there is no change. The environmental change is the product of growth and development but there are risks which are inbuilt in the process of growth and development. When man denies them, he is surmounted with challenges and risks. Thus, science and technology are the achievements of hard work and continuity of human evolution.
According to the United Nations, it is estimated the population will grow to nine billion in 2050 resulting to the occupation of 50% land surface and oceans. Increased population will further contribute to environmental degradation unless the developmental corridor and welfare to humankind are well managed. While addressing these challenges, among other approaches the concept of the Sustainable Development Goals emerges the most rewarding. In this regard it is considered that the digitalization will contribute to implementation of Sustainable Development Goals and it will support the Sustainability Finance.
Digitalization refers to introducing new solutions based on digital technologies. It defines core concepts of digital transformation, blockchain, tokenization, and Corporate Digital Responsibility. Digitalization is a technical process of converting information into digital format and adopting digital technologies. In finance, it includes online banking to algorithmic trading. Digital Transformation is a strategic change of using digitalization in a company to its business models, processes and culture. In sustainable finance, it begins from digitizing ESG reports to creating entirely new, digitally native sustainable assets and markets. Blockchain refers to distributed ledger technology (DLT) that creates an immutable transparent, cryptographically secure record of transactions. Its key innovation is enabling trust and verification in a digitalized network without a central intermediary. Tokenization is the process of creating a digital representation (a token) of real-world asset on blockchain. Almost any asset, from a ton of captured carbon to a share in a solar farm or a green bond, can be tokenized. This permits fractional ownership, enhanced liquidity, and automated compliance through smart contracts. Corporate Digital Responsibility (CDR) is an extension of traditional Corporate Social Responsibility (CSR) and it includes data privacy and security, algorithmic fairness and bias mitigation, digital well being for employees and customers, and the environmental impact of its digital infrastructure.
CDR is becoming an essential component of the ‘Social’ and ‘governance’ pillars of ESG analysis.
Digitalization demands a vast quantity of energy approximately 2% of the global energy. To minimize the energy consumption, the Green Computing plays a key role. The Green Computing encourages a higher degree of capacity utilization of servers and energy-efficient cooling system. Another important aspect is resource efficiency and recycling. Several components of rare-earth elements are used in the IT devices and these elements are extracted from earth causing damages to soils, groundwater, and wildlife. It increases the challenges of climate change. The principle of sustainability of digitalization is a profound answer to these challenges. The global market economy must address it through defined goals and a remarkable implementation mechanism. Every nation attempts to ensure the sustainability of digitalization. One of them is the principle of sustainable thinking of sharing knowledge and redirecting societies toward sustainable development. The UNESCO Global Action Programme on Education for Sustainable Development is one of best initiatives of digitalization of education through e-learning. Hence the sustainable digitalization is achievable.
Digitalization has influenced all walks of human life even though there are challenges to our fundamental values, constitutional principles, and legal environment. The digitalization has begun already and it has entrenched into all walks of life. Thus, there has to be a continuous effort to find solutions to these challenges consistently. The policy makers have deliberated and are deliberating now too. It is true that every new innovation and development leads to impact and consequences on the balance in the society, economy, and environment. The European Union has achieved digital market through consistent application of legal principles and rules. The establishment of unified frameworks in the field of data protection and telecommunication standards is an attempt toward a sustainable digital environment.
The world economy is the process of recognising the political and regulatory challenges pertaining to sustainable development and data analysis and security resulting to the regulatory requirements for safety and market reality which add to the cost of economy. Another approach is emerging on the reorientation of our values and ethical concepts. There is a need for addressing the strategic management and leadership issues. To day is a digital world and Artificial intelligence has arrived virtually in global market.
Digital transformation is a continues contribution towards sustainable future. Digitalization manifests in all spheres of human activities and business practices. Digitalization needs to become a strong movement for learning, exchanging, empowering business companies, stock markets, SMEs, large companies and institutions, and all other organisations.
Sustainability aims to achieve a long-term balance between competing goals. The “Three Bottom Line” approach integrates them into sustainability finance in terms of profit, planet, and people. The transparency and credibility strengthens digitalization and sustainable finance mutually.
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