AMPLIFY  VOL. 37, NO. 10
  

While the world is undergoing widespread digital and AI transformation, it is also facing the urgent challenge of climate change, which threatens the foundations of a functioning economy. Economic activities from industrial processes and increasingly energy-intensive data centers produce greenhouse gases that raise global temperatures.

To avoid the worst consequences of climate change, the Paris Agreement lays out a commitment to limit the increase of global surface temperature to 1.5 degrees Celsius. Although governments and companies are increasingly setting targets to achieve net zero emissions by 2050, progress has been extremely limited.

With the exponential development of digital innovations such as AI, blockchain, and the Metaverse, new opportunities arise to turn climate ambition into climate action. However, policymakers and managers alike seem to struggle with both their digital and their net zero transition. Given digital innovation’s potential to significantly facilitate or hinder progress in the fight against climate change, it seems imperative to combine digital and climate efforts, focusing on a “twin transition.” Yet so far, neither research nor practice provide much guidance for managing this transition.

In a recent article for the Academy of Management Perspectives, my colleagues Ann-Kristin Zobel, Youngjin Yoo, Christopher Tucci, and I began laying out digital sustainability strategies that challenge managers and policymakers to think about digital sustainability as an opportunity to innovate, rather than a way to comply with regulations.¹ We challenged digital sustainability researchers and practitioners to go beyond mitigation and reduction to consider carbon removal and nature regeneration. Importantly, we introduced digitally enabled and digital-first innovation as pathways to implement governmental and corporate net zero strategies.

At the same time, recent work by René Bohnsack, Christina Bidmon, and Jonatan Pinkse (all contributors to this issue of Amplify) highlight that digital sustainability can lead to unintended consequences.² Recent examples include the staggering emissions from blockchain mining and the data centers powering AI applications.

Given the potential for digital innovation to facilitate progress on the global economy’s net zero transition and the vast risks of a digital sustainability approach, we need clear, actionable advice for managers and policymakers.

This issue of Amplify, Part I in a two-part series, offers a set of insightful articles from leading researchers and practitioners working on digital innovation for climate action. They share a common message: digital innovation can be the key to accelerated climate action if managed correctly. Of course, it will lead us directly to climate disaster if used irresponsibly. Applying the carefully crafted frameworks presented in this issue can help us avoid the latter and enable the former.

In This Issue

We start with a fascinating overview of priorities for the twin transition presented by the special interest group Digitalization & AI for Sustainability (DAISY) at the Copernicus Institute for Sustainability Development at Utrecht University, the Netherlands. Christina Bidmon, Laura Piscicelli, and Iryna Susha, along with Devin Diran, Francesca Ciulli, and Albert Meijer provide four core messages. First, that a successful twin transition requires rigorous conceptual and empirical research that provides us with the tools and insights to help navigate the complexities of the transition. Remarkably, the second core message entails a warning to stay clear of tech optimism, which speaks directly to issues related to unintended consequences. Digital innovation can be the key to sustainability but will not solve all our problems — often, other approaches and nature-based solutions should be prioritized. Third, Bidmon et al. highlight the need to understand the factors that facilitate or prevent collaboration for digital sustainability. Finally, the authors point out that neither policies nor businesses can achieve the twin transition alone; rather, comprehensive policies are needed to provide smart incentives for businesses to engage responsibly.

Our second piece highlights an insightful example of such a policy from a high-profile team of researchers at the KIN Center for Digital Innovation at Vrije Universiteit Amsterdam, the Netherlands. Damla Diriker and Amanda J. Porter teamed up with Ilse Hellemans from the Netherlands Organization for Applied Scientific Research (TNO). Their article shows how we can use digital innovation for mission-oriented innovation policies. Based on several years of research and practice, they present crowdsourcing as a vehicle for mission-oriented policies. The ability of digital innovation to leverage the “wisdom of the crowd” facilitates policy agenda-setting because it allows initial broad exploration and refinement into sub-challenges. It also promotes solution development through targeted experimentation and broadens the scope of experimentation. Finally, it facilitates policy implementation by collecting local insights on planned interventions and testing and gathering feedback on implementing interventions.

Next, two digital sustainability champions present insights on digital innovation’s potential in the electricity and mobility industry based on their experience in leading climate tech start-ups and scale-ups.

First, Jannis Jehmlich, a senior product manager from 1KOMMA5, the German unicorn that set out to digitally transform the energy industry, provides a deep dive into the load management problem that comes with the integration of renewable energy sources into our energy systems. Because large-scale integration of renewables is probably the most important challenge for emission reductions, digital innovation can play a huge role. Jehmlich walks us through the complex supply and demand dynamics in Germany’s energy systems and introduces the idea of a digital power economy driven by real-time data and a dynamic electricity tariff that can solve the load management problem. However, this envisioned digital power economy depends on comprehensive data gathering through smart meters, enhanced data processing capabilities, and synchronous regulation and process changes in a heavily regulated industry.

Second, Pieter Waller, cofounder and previous chief commercial officer of Chargetrip, a leading start-up in the smart electric vehicle routing space, takes us on a journey to scale e-mobility through digital solutions. Focusing on the electrification of commercial fleets, he unpacks the multitude of constraints that complicate e-mobility scaling. Waller then provides clear managerial guidance on how to manage these constraints. Similar to the challenge in the general electricity system, the task of matching supply and demand through data must be the guiding mantra. Furthermore, companies must design a technology stack that is open to integration and allows for the coordination of multiple actors through APIs. Finally, Waller explains that given the differences in regulations and local conditions across countries and locations, a flexible and bottom-up approach to piloting and scaling smart-charging and routing applications is the key to success.

Together, Jehmlich’s and Waller’s articles give us a clear picture of how digital innovation can be the solution to some of the most pressing and crucial sustainability problems if managed correctly. That brings us to our final two articles, which present frameworks for wisely managing AI and digital transformations.

In a thought-provoking article on the butterfly effect of AI, Jonatan Pinkse, professor of sustainable business and director of the Centre for Sustainable Business at King’s College London, teamed up with René Bohnsack, professor at Católica Lisbon School of Business & Economics, Portugal, where she also heads the Digital+Sustainable Innovation Lab. Since “seemingly harmless” AI applications can have adverse effects on the environment and society at large, they present a comprehensive framework for wisely managing AI for sustainability. Managers must control AI’s training data, the optimization drivers and parameters in AI algorithms, and the decisions taken based on training data and algorithms with potential biases. The authors demonstrate that successfully managing unintended consequences requires continually monitoring, measuring, modeling, and managing AI applications for sustainability.

Finally, Aspen Institute Fellow Alessia Falsarone sheds light on an often-overlooked aspect of digital sustainability: the digital talent needed to manage digital sustainability solutions. Unlocking the benefits of digital sustainability and managing its unintended consequences requires the right digital talent. Falsarone’s best practices for growing the talent pool for digital climate transformations include: (1) identifying climate-resilience skills and capabilities, (2) leveraging collaborative tools and research for learning, and (3) embracing AI and feedback for advancement. Finally, going beyond the perspective of a single firm, she presents best practices for building and leveraging stakeholder networks for digital talent: leveraging living laboratories, fostering diverse networks, and championing collaborative initiatives.

Part I of this two-part series of Amplify presents six articles that advance our understanding of digital innovation for climate action. From priorities and smart policymaking to successful business applications and frameworks for managing AI and digital talent, this issue provides clear insights for managers and policymakers on how to make the twin transition a success.

Part II will dive deeper into mission-driven policies, provide more case studies and success stories on digital sustainability from various industries, and shed light on approaches for managing the increasing energy cost of AI and data centers.

References

¹ Falcke, Lukas, et al. “Digital Sustainability Strategies: Digitally Enabled and Digital-First Innovation for Net Zero.” Academy of Management Perspectives, 18 March 2024.

² Bohnsack, René, Christina M. Bidmon, and Jonatan Pinkse. “Sustainability in the Digital Age: Intended and Unintended Consequences of Digital Technologies for Sustainable Development.” Business Strategy and the Environment, Vol. 31, No. 2, February 2022.