AMPLIFY  VOL. 37, NO. 10
  

The climate transition of the global economy requires entire sectors to digitally transform their value chains. This shift is crucial since data and digital systems are vital for measuring and reducing emissions, increasing transparency, and ultimately driving sustainable practices. Corporate investments in emerging technologies are a starting point, but they don’t guarantee lasting environmental or commercial impact. Amid discussions around human capital, responsible deployment of sustainable products/services, and growing evidence of bias, addressing the digital talent gap has become a priority.

Without a blueprint, companies are experimenting with setting attainable goals for their increasingly digital recruits. As climate innovations reach the market, they face scrutiny from multiple stakeholders — from reporting requirements to environmental and social due diligence by suppliers and customers.

By intentionally transforming these stakeholder networks into learning laboratories, organizations can gain invaluable experience. This approach can activate digital talent and ultimately turn collaborative experimentation into scalable digital solutions for climate action.

Digital Talent’s Relevance for Climate Action

There is no single roadmap for closing the digital talent gap across sectors. Instead, climate goals receive a reality check via verification set out in regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD), Germany’s Supply Chain Due Diligence Act, and the US Inflation Reduction Act’s greenhouse gas corporate reporting requirements.

Foundational skills and competencies are ballooning for a digital talent pool that can sustain the timely deployment of technology solutions across an organization while adhering to sustainability standards and balancing the consumption and regeneration of natural resources. With rapid advances in cloud-focused platforms and AI applications, the definition of digital transformation (DX) is moving beyond the continuous deployment of technology at scale. From operational efficiencies brought by digital automation to the creation of new ways of working, DX is set to reshape the organizational design of companies across economic sectors.

This is even more critical as organizations increase their DX investments while aiming to reduce the environmental footprint of their products and operations.¹ The concept of “own it first, centralize second,” embraced by industrial technology giants like Schneider Electric captures the early incentives DX initiatives need to create internally to find commercial and environmental success externally. Building trust in the transformative power of technology hinges on owning the cross-team experiences it creates, tracking its impact on job satisfaction, and acknowledging the talent-retention gains it must generate before smarter business decisions can be realized.

An own-it-first mindset suggests that an organization must clearly define success and its role in delivering environmental sustainability as an outcome that aligns with its business strategy and the way it generates value. This may entail establishing internal operational targets, including product and process specifications that enable environmentally sustainable value delivery to customers.

Core to an own-it-first DX is owning the upside as much as the downside of each business decision. One example is Amazon’s efforts to embrace the circularity of packaging materials as a tangible efficiency goal of its shipping platform by creating a playbook for suppliers to follow, starting with those contributing more than 50% of its supply chain emissions.² Although strong-arm tactics may draw the attention of Amazon’s suppliers, creating positive outcomes across the entire procurement cycle will require educational resources and digital literacy, starting with connecting the shared experiences of customers and suppliers across its global marketplace.

A network of shared experiences is a necessary step in breaking the organizational inertia that threatens to keep digital talent from designing solutions to the global problems posed by climate change. For example, what may have started with internal champions and dedicated efforts led by a transformation officer is now the responsibility of virtually everyone in the firm.

In highly matrixed organizations, centralization may dilute the desire to ensure localized knowledge and practices are used to address local issues. However, the ability to recover localized know-how is even more relevant when it comes to mapping the environmental sustainability of the entire procurement cycle, especially for hard-to-abate industries.

Examples include industries with energy-intensive production that releases CO2 as a byproduct, including aviation, construction, chemical manufacturing, and shipping. Therefore, the ability of high-carbon-emitting industries to join the 90+ countries that have set net zero emission targets so far may be highly dependent on removing the information divide by depositing local knowledge about environmentally harmful disruptions to a central intelligence network accessible across industries.³

Growing the Right Talent Pool

Digital literacy and responsible technology use are prevailing topics in talent discussions for senior leaders, but many believe building sustainable practices that consider the environmental impacts of digital innovation is, inevitably, a trade-off. That trade-off is often left to hyperscalers (the so-called Magnificent 7⁴ that have taken center stage in global financial markets for developing exceptionally sophisticated technology infrastructure at scale) to resolve.

It’s no surprise that the race to establish carbon markets and deliver financial incentives for companies to offset their carbon production has followed the wide accessibility of IT infrastructure. This includes mechanisms such as carbon taxes, access to carbon-trading systems, and the availability of carbon offsets as tradable rights linked to funding projects that reduce or remove an equivalent amount of CO2 from the atmosphere.⁵

However, there’s more to the conversation than the role played by large technology innovators. Global communities of digital natives are entering the workforce, providing valuable insights as early adopters of those solutions, and there are generations of consumers who were not “born” digital but don’t want to feel left behind.⁶ Research shows that tech-savvy employees are most likely to adopt an eco-friendly lifestyle, champion the earth’s environmental well-being, and have the ability to influence sustainability-first buying decisions.⁷

First Steps

What can organizations do to develop and retain a talent pool equipped for a sustainable DX led by climate technologies without alienating industry veterans and pockets of their consumer base? First, they should identify the skills and capabilities specific to their organization that directly address the climate-resilience needs of their internal ecosystem and their external marketplace.

Beyond the immediate reward of dissolving internal silos of specialized knowledge, the rollout of a digital-native capability toolkit can enhance an organization’s innovation roadmap while helping to develop a community of digital learners.

The international research community agrees.⁸ The deployment of open, collaborative databases and global climate simulators like En-ROADS is already informing decision-making about optimal land use, carbon-neutral transportation routing, renewable energy consumption, and the impacts of rising temperatures on natural ecosystems.⁹

Beyond gaining functional experience in business roles, coupled with personal and professional alignment with the organization’s mission, the right talent pool must be able to navigate both digital and ecological disruptions. The design of digital communities enhanced by pilot projects for faster learning and detection of key operational trends can streamline internal processes. This includes document analysis, previews of calculation methodologies like testing environmental assessment reports, configuring carbon-emission models with specific corporate inputs, and offering specialized dashboards for external dissemination.

For example, a pilot launched by Microsoft earlier this year aims to streamline and expedite the sustainability lifecycle of the company’s products and support the creation of value chain–specific solutions for its customers across various economic sectors.¹⁰

Beyond the immediate learning and training advantages that generative AI pilot projects and autonomous agents could directly transfer to suppliers as they align their talent, products, and operations with climate priorities specific to Microsoft and its peers, there is the potential for longer-term feedback gathering and knowledge transfer. This feedback can be applied to new domains to further advance climate R&D (see sidebar “Best Practices to Grow the Right Talent Pools for Digital Climate Transformation”).

Stakeholder Networks for Climate Innovation 

One important question to consider is: beyond environmental purpose and mission, are open innovation ecosystems all about maximizing productivity gains for a digital talent pool that prioritizes automation of existing processes and infrastructure instead of innovating? Not quite.

The importance of stakeholder collaboration in holistically addressing climate challenges is a focal point of attention for executive leaders in the private sector, as the financial community and the general public continue to ponder the legitimacy of environmental claims and challenge those corporate advocacy initiatives favoring conflicting business priorities (see sidebar “Best Practices to Build and Leverage Stakeholder Networks for Digital Talent”).

It is worth looking at what researchers call “living laboratories”: communities of knowledge advancing climate literacy and innovation through continuous user engagement.¹¹ These include companies, governments, nongovernmental organizations, and academic institutions experimenting with environmental solutions and advancing equitable economic transitions. Living laboratories have been established in several major cities, providing a testbed for participative research and leading to individualized strategy development for companies looking to explore specific environmental challenges in an urban area.

The Amsterdam Institute for Advanced Metropolitan Solutions (AMS) created a living lab for logistics companies looking to gain insights about a circular economy network.¹² Launched early this year, LogiCELL is a two-year pilot for corporate participants. By enabling a digital ecosystem through the lived experience of a field lab with a digital backdrop that involves employees, customers, suppliers, and the public sector, digitally delivered experiential learning has the potential for faster scale-up and more effective resource allocation through business model innovations that resemble entrepreneurial clusters.¹³

Another benefit of active stakeholder networks like living laboratories is their ability to address bias in the assumptions underpinning climate scenarios at early development stages. Conducting both impact and risk assessments as part of a stakeholder network encourages diverse perspectives while improving the reach that climate innovations can achieve and mitigating potential biases.

This is particularly relevant in the context of cooperative climate initiatives, in which private and public sector participants (along with investors and civil society representatives) have shown tangible progress in regulating each other’s contributions.¹⁴ This includes designing actionable climate policies (mitigation or adaptation) and benchmarking individual and network-level progress, such as:

• Climate targets — energy efficiency, emission reduction, renewable energy projects

• Business-level targets — market share gained, revenues per scale of adoption of products or solutions

• Investment returns of pooled financial resources mobilized to meet climate and business targets — direct technology investments, funds mobilized in partnerships, funds raised as a result of increased customer demand

Collaborative climate initiatives may prioritize compliance with antitrust laws and intellectual property protection of any potential innovation generated by a stakeholder network, but the organizational value of developing digital talent through such initiatives far exceeds the enormous risk of tackling it alone.

Conclusion

In the fight to address climate change, developing an effective digital talent pool and fostering active stakeholder engagement go hand in hand (see Figure 1). Corporate leaders seeking to scale up their digital innovation efforts need to rethink the way digital talent generates value.

We can all agree that developing a deep digital talent bench does not guarantee that digital innovation will succeed in the face of sudden climate threats. However, increasing critical digital talent capabilities by establishing collaborative stakeholder networks can help industries and markets build resilience to climate disruptions within the core of each organizational function.

References

¹ Blumberg, Deborah. “5 Steps to Power Your Company’s Sustainable Digital Transformation.” Forbes, 28 March 2024.

² Clancy, Heather. “Amazon to Suppliers: We Will ‘Prioritize’ Those Who Tell Us Their Emission Reduction Plans.” Trellis, 11 July 2024.

³ Schumer, Clea, Cynthia Elliott, and Rebecca Gasper. “5 Countries Taking Action to Reach Net-Zero Targets.” World Resources Institute, 6 July 2023.

⁴ Duggan, Wayne. “Magnificent 7 Stocks: What Are They and How They Dominate the Market.” US News & World Report, 6 September 2024.

⁵ Gurgel, Angelo. “Carbon Offsets.” Massachusetts Institute of Technology (MIT) Climate Portal, 8 November 2022.

⁶ “Digital Natives.” Berkman Klein Center for Internet and Society at Harvard University, 6 February 2024.

⁷ Wood, Johnny. “Gen Z Cares About Sustainability More Than Anyone Else —and Is Starting to Make Others Feel the Same.” World Economic Forum, 18 March 2022.

⁸ Broca, Sébastien, et al. “Digital Commons for the Ecological Transition: Promises, Practices and Policies.” University of Canberra, 7 June 2023.

⁹ “The En-ROADS Climate Solutions Simulator.” Climate Interactive, accessed October 2024.

¹⁰ “Overview of Copilot in Microsoft Sustainability Manager.” Microsoft, 24 May 2024.

¹¹ Compagnucci, Lorenzo, et al. “Living Labs and User Engagement for Innovation and Sustainability.” Journal of Cleaner Production, Vol. 289, March 2021.

¹² “LogiCELL: Living Lab for Logistics in the Circular Economy.” Amsterdam Institute for Advanced Metropolitan Solutions (AMS), accessed October 2024.

¹³ Falsarone, Alessia. The Impact Challenge: Reframing Sustainability for Businesses. Taylor & Francis Group, 2022.

¹⁴ “Cooperative Climate Initiative Tracking.” Global Climate Action, accessed October 2024.