Going Digital for the Circular Economy

In a matter of decades, digital technology has transformed how we live, work, and communicate. More than that, widespread digitalization is a critical piece in the transition to a circular economy, in ways both big and small. From sending electronic receipts to streamlining global supply chains, digitalization is a frontier waiting to be further harnessed. 

At first, the two concepts may seem unrelated; we often think of the digital world as making our lives more interconnected and convenient, but not necessarily more sustainable. In truth, even the simple ability to access quality information – and quickly share it – can push sustainable innovation further than we think. 

The OECD (Organisation for Economic Co-operation and Development) has published extensive work on this, stating that various digital technologies, “facilitate the transition to a more resource-efficient and circular economy, by helping to overcome obstacles that stand in the way of the large-scale deployment of greener business models, as well as a more effective delivery of circular economy policies.” The OECD points to things like artificial intelligence, data analytics, and even 3-D printing as being important tools in transitioning from resource-intensive, wasteful production. 

Put simply, the digital world gives us better access to information, and the tools to implement that information in a more efficient manner. In the face of the climate crisis, that’s essential.   

One of the main sites of change lies in making supply chains more circular, something we’re always thinking about at 5REDO. An article from the tech site Technology Review outlines the ways digitalization can help to, “capture, store, and analyze consumption patterns, which in turn helps organizations make better decisions.” They provide the example of material use, which in most sectors, generates about 70% of greenhouse gas emissions (GHG): “If businesses have insights into how full their aircraft, ship, or truck is, they can determine in real time how efficient their delivery will be. This translates to better efficiency, lower fuel costs, shorter delivery cycles, and reduced GHG.” 

With the advanced technology available for data analytics and visualization, companies, governments, and organizations are able to test new models and examine risks in a virtual setting. In the pre-digital era, introducing a new idea or product would require labour and resource-intensive work – and cause more waste. Now, employing sustainable principles can be done in a measured, efficient, and arguably more profitable way. After all, the same digital tools have helped researchers measure and project for climate change – and it’s where solutions can come from, too. An article from the World Economic Forum says it best: “Without a coherent and inclusive global digitalization effort, we will never be able to achieve climate goals in a timely manner.” 

As with other climate change efforts, we have to act now. The consulting agency Deloitte has said there’s a “window of opportunity” to implement the benefits of digitalization, describing it as a “major opportunity for individual companies to re-think their future, their strategy, their value chain, their value creation, and their operations.” 

With all of this considered, we see that there’s much more to the digital world than everyday convenience. A 3-D printer isn’t just a cool gadget; it can radically change global resource use. An open data-sharing platform isn’t just there to help employees communicate; it can be a site for critical sustainability research. Ultimately, it’s important to foster a mindset shift, so we think of digitalization as a foundational tool for social, economic, and environmental change.