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Leveraging tech for Environmental and Social Responsibility

By Lianne Stewart

Published June 13, 2024 • 4 Min Read

Embracing innovation is a path forward for companies to move the needle on their ESR plans.

A recent PWC survey highlights a stark reality: Canada is lagging behind our global counterparts. The 2022 survey reveals that only 12% of Canadian CEOs have committed to reducing their greenhouse gases to net-zero, ten points lower than global respondents. Additionally, StatsCan figures reveal that only about one-third of Canadian businesses engaged in environmental management practices in 2019.

To explore opportunities for Canadian businesses, and shed light on the challenges of implementing environmental and social responsibility (ESR) initiativies, we spoke with Professor Ghaddar, an Associate Professor of Management Science at Western University’s Ivey Business School.

“ESR is a competitive differentiator in today’s vast changing landscape,” she says. ”Sustainable practices can drive innovation, attract like-minded investors and employees, and foster stronger community relations.”

She offers that embracing innovation is a path forward for companies to move the needle on their ESR plans. “Various companies in Canada ranging from small startups to big companies are already using technology for sustainability.”

Pioneering a Future for ESR

For example, Professor Ghaddar cites Ribbit, a company that recently announced its plans to use autonomous airplanes, leveraging aviation and technology, to help rural Canadian families cut waste. “Reducing food spoilage caused by supply chain issues in hard-to-reach regions like northern Canada, [will] lead to better outcomes for people and the environment,” she says.

Overcoming Challenges with Tech

So, what’s holding many companies back? Compliance with environmental regulations is often cited as a barrier to ESR, and Professor Ghaddar acknowledges these difficulties. She cites high upfront costs for equipment upgrades, navigating complex regional regulations, and extensive reporting can be burdensome.

“These factors complicate long-term planning and increase operational restrictions,” she says. “Additionally, extensive documentation, continuous monitoring, and the requirement for detailed reporting add administrative burdens to the company.”

Fortunately, she says technology can transform these hurdles into stepping stones. Professor Ghaddar sees potential for businesses to apply artificial intelligence technology to support their environmental and social goals. She suggests AI can optimize operations and reduce environmental footprints by streamlining resource allocation, minimizing waste, and enhancing operational efficiency.

She also says AI can be used for data-driven ESR decisions. By analyzing and reporting large swaths of ESR data, she says AI can not only save time, but surface valuable insights for transparent and reliable reporting to stakeholders on environmental and social performance.

Beyond AI, she says there are other ways to find new technologies to move further into environmental and social responsibility. She says “engaging with start-ups, participating in industry collaborations and conferences, and investing in research and development” will help businesses uncover new innovations that could integrate ESR into their operations.

Professor Ghaddar adds that internal initiatives can also be empowered by tech. She recommends developing ESR-focused programs that leverage technology, such as digital learning platforms or sustainability dashboards, to empower the workforce as champions of environmental and social responsibility. She believes technology, like digital collaboration and  ideation platforms, can encourage employee-led initiatives, as well.

Tech as an ESR double edged sword

While she says technology can offer immense potential to advance sustainability, she warns there are notable instances where it has failed, noting ambitious smart city projects that she believes failed due to their underestimation of urban complexity, among other concerns.

Technology also can fail to deliver in situations where an effort to improve efficiency or reduce resource consumption leads to an increase in overall consumption. “In certain instances, technology presents solutions for sustainability challenges, but it can also introduce new problems, such as the rebound effect, so careful implementation and continuous evaluation is key,” she warns.

The Technological Arsenal for a Brighter Tomorrow

Looking ahead, Professor Ghaddar highlights innovative advancements poised to accelerate progress on environmental and social fronts, which can help Canadian businesses meet their ESR goals.

  • Enhanced solar panels and offshore wind turbines powered by AI will make clean energy more accessible and efficient.

  • Battery technology breakthroughs will ensure a more dependable supply of renewable energy.

  • AI-driven energy management systems and smart grids will optimize resource allocation and reduce energy consumption, leading to a smaller environmental footprint.

  • Advancements in electric and autonomous vehicles offer cleaner and more efficient urban mobility solutions.

ESR is a long-term opportunity

By exploring innovative technologies and integrating ESR into their core values, Professor Ghaddar believes companies can achieve long-term success while contributing to a healthier planet and a more equitable society. She concludes, “Incorporating a sustainable business strategy is not only good for the environment but can also have a positive impact on the organization’s bottom line.”

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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