Rethinking digitalization and climate: don’t predict, mitigate

Digitalization is a core component of the green transition. Today’s focus is on quantifying and predicting the climate effects of digitalization through various life-cycle assessments and baseline scenario methodologies. Here we argue that this is a mistake. Most attempts at prediction are based on three implicit assumptions: (a) the digital carbon footprint can be quantified, (b) business-as-usual with episodic change leading to a new era of stability, and (c) investments in digitalization will be delivered within the cost, timeframe, and benefits described in their business cases. We problematize each assumption within the context of digitalization and argue that the digital carbon footprint is inherently unpredictable. We build on uncertainty literature to show that even if you cannot predict, you can still mitigate. On that basis, we propose to rethink practice on the digital carbon footprint from prediction to mitigation

Opportunities and Risks of Digitalization for Climate Protection in Switzerland

Information and Communication Technology (ICT) is an important enabler for a low-carbon economy in Switzerland. ICT has the potential to avoid up to 3.37 times more greenhouse gas (GHG) emissions than the amount of emissions caused by the production, operation and disposal of ICT devices and infrastructures used in Switzerland in 2025. In absolute terms, ICT will enable the Swiss economy to save up to 6.99 Mt CO2-equivalents (CO2e) per year, with an own carbon footprint of 2.08 Mt CO2e per year. This opportunity for the ICT sector to contribute to climate protection, however, can only be realized under optimistic assumptions. In particular, it is necessary that the existing technological and economic potentials are systematically exploited by taking ambitious and targeted actions. Such actions can be especially effective in the transportation, building and energy sectors, which have the highest potential for ICT-enabled (“smart”) solutions to reduce GHG emissions. At the same time, the carbon footprint of the ICT sector itself must be reduced by 17%, which is technologically and economically feasible due to efficiency gains

How to turn “less bad” into good without limit : to measure companies’ positive climate impact

Climate change is an urgent problem threatening life as we know it. To combat the problem there is a high need to reduce this generation’s human-induced Greenhouse Gasses (GHGs). Today’s societies consist of complex networks of actors, and solving the problems of climate change will require contributions from all types of actors, not least from companies. At the same time as the expectations and the demands on companies’ environmental responsibility are getting higher, measuring and reporting climate impact has become more and more common among companies. The currently most common approach for companies’ climate impact is focused on doing less harm by lowering the company’s emissions as close to zero as possible. The best possible outcome from a scenario where all companies stick to working within their own company’s boundaries, using the ”less bad” approach, is that some companies reach net zero. With the current degree of environmental harm, however, that would not be long-term sustainable. Instead, more companies need to raise their sights and also start looking beyond their own boundaries to see what more can be done. With such a shift, the focus does not only switch from guilt and burdens to opportunities but also removes the limit for how much positive climate impact a company can have. There are businesses, like the digitalization consultancy sector, that have opportunities for achieving a positive climate impact since their own climate impact is vanishingly small in comparison to the climate improvements they can achieve through their operations. By working with reducing other companies’ emissions, digitalization consultants can overcompensate for their own emissions, making it possible for them to achieve a net positive climate impact in comparison to a Business As Usual (BAU) scenario. For solution providers, such as digitalization consultants to become profitable and get the distribution they need, there is a need for them to be able to measure and demon-strate their generated positive effect. In this thesis, ways in which positive climate impact can be measured and demonstrated by digitalization consultancy companies are investigated. The findings show that there are at least five terms in the industry, used synonymously to describe this positive effect, Scope 4, Avoided emissions, Enabling effect, Carbon handprint, and Comparative emissions. Findings also show that there are existing frameworks and methods available, that theoretically are capable of quantifying this positive effect. The thesis suggests three frameworks that seem to be most suitable for digitalization consultants, and among these, the most comprehensive is the Avoided Emission Framework (AEF) provided by Mission Innovation. All of the founded frame-works do, however, come with practical challenges, for instance, related to the required data, the measurement techniques, and the need of making future predictions. Further, since one of the main purposes of the assessments is to enable comparisons based on the climate capacity of different alternatives, the lack of real applications makes the contextual field missing, making any given outcome from current methods difficult to use and hard to interpret. This dilemma raises the question of whether it is best to start using a framework that contains challenges and unsolved problems or wait until the perfect framework has evolved. This gets answered with the suggestion that companies preferable should continue exploring the field of Scope 4 by adopting a transparent approach, and keep testing out the methods to contribute to their further development

Essays on digitalization among small and medium-sized firms : Complementary and contingent approaches

This dissertation explains how and under what circumstances the operational performance of small and medium-sized (SME) firms is most likely to benefit from digitalization. This topic will be examined by combining the resource-based view (RBV) and contingency theory, that is, using the contingency RBV, which remains relatively rarely used in current research. The perspective permits an examination of the impact of various resources and capabilities in the presence of situational factors. The dissertation consists of five papers dealing with digitalization in SMEs operating in various areas. The research relies on two surveys involving Finnish SMEs from manufacturing industries, the first of which provides cross-sectional data. Together the two datasets provide the longitudinal data informing the dissertation. The research shows that the contingency RBV provides a comprehensive framework that can assist in examining how and in what circumstances SMEs can benefit from digitalization, that benefit being measured from an operational improvement perspective. Previous research on SMEs is limited, so the first result of this thesis involves testing a theoretical framework for SMEs in the context of their digitalization. The research results show that the benefits of digitalization for operational performance arise through two different mechanisms, and digitalization alone does not affect the firm's success. The effect of digitalization on SMEs’ operational performance emerges from the complementarity between digitalization and firms’ organizational attributes, factors, or resources that enhance performance. The second mechanism relates to environmental and situational factors and shows that both the firm's internal and external environment determine the level of the impact of digitalization. Among Finnish SMEs, digitalization produces value in the form of improved operational performance when digitalization, resources, and capabilities bolster each other in internal and external environments conducive to digitalization.Tässä väitöskirjassa selvitetään miten ja missä tilanteessa pienet ja keskisuuret (pk) yritykset pystyvät todennäköisemmin hyötymään digitalisoitumisestaan operatiivisen suorituskyvyn näkökulmasta. Aihetta tarkastellaan yhdistämällä resurssi- ja tilannetekijäteoria eli tässä työssä hyödynnetään tilanteista resurssiteoriaa, joka on nykyisessä tutkimuskentässä vielä varsin rajallisesti käytetty. Näkökulman mukaan erilaisten resurssien ja kyvykkyyksien vaikutusta voidaan tarkastella tilannetekijöiden ollessa läsnä. Väitöskirja muodostuu viidestä artikkelista, joissa käsitellään yritysten digitalisoitumista. Väitöskirjassa käyte¬tään kahta eri kyselytutkimusta, joihin suomalaiset valmistavan teollisuuden pk-yritykset ovat osallistuneet. Ensimmäinen aineisto on poikkileikkausaineisto ja aineistot yhdessä muodostavat toisen, pitkittäisen, aineiston. Tutkimustulokset osoittavat, että tilanteinen resurssiteoria muodostaa kattavan viitekehyksen, jonka perusteella voidaan lähestyä sitä, miten ja missä tilanteissa pk-yritykset pystyvät hyötymään digitalisoitumisesta parantuneen operatiivisen suorituskyvyn näkökulmasta. Aikaisempi pk-yrityksiin keskittynyt tutkimus on ollut vähäistä, joten tämän väitöskirjan ensimmäisenä tuloksena voidaan pitää teoreettisen viitekehyksen testaamista nimenomaan pienillä ja keskisuurilla yrityksillä niiden digitalisoitumisen kontekstissa. Tutkimustulokset osoittavat, että digitalisoitumisen hyöty operationaaliseen suoriutumiseen syntyy kahden erilaisen mekanismin kautta eli digitalisoituminen ei yksin vaikuta yrityksen menestymiseen. Ensimmäinen mekanismi muodostuu niin kutsutusta täydentävästä suhteesta, joka tarkoittaa sitä, että yrityksen digitalisoituminen vaikuttaa yrityksen muihin resursseihin ja kyvykkyyksiin vahvistavasti, ja yhdessä digitaaliset tekijät yrityksen resurssien ja kyvykkyyksien kanssa parantavat yrityksen suoriutumista. Toinen mekanismi liittyy kontingenssivaikutukseen, jossa tilannetekijät vaikuttavat yritysten digitalisoitumisesta syntyvään hyötyyn. Tulokset osoittavat, että mikäli yrityksen sisäinen ympäristö on suotuisa yrityksen digitalisoitumiseen, sillä on positiivisia vaikutuksia digitalisoitumisesta saatavaan hyötyyn. Tulosten mukaan myös ulkoinen ympäristö vaikuttaa yrityksen digitalisoitumisesta saatavaan hyötyyn. Suomalaisten pk-yritysten digitalisoituminen tuottaa yrityksille arvoa parantuneena operatiivisena suorituskykynä silloin, kun yritysten digitalisoituminen ja resurssit sekä kyvykkyydet vahvistavat toisiaan digitalisoitumiselle suotuisassa sisäisessä ja ulkoisessa ympäristössä.fi=vertaisarvioitu|en=peerReviewed

A systemic perspective on socioeconomic transformation in the digital age

Digitalization has set the stage for a stream of radical innovations that have the potential to trigger a new technological revolution and cause deep structural changes throughout the economy, affecting not only the technology base, but also the facilitating structure (including production, infrastructure and markets), public policy, and the environment. Focusing on these building blocks, we combine network analysis and composite indicators into a novel framework to investigate a country’s socioeconomic system both across its components and over time. Its empirical application to a set of Western and Asian countries over 10 years gives insights into their socioeconomic performance and development, as well as their capability to absorb technological change. A structural decomposition analysis further allows investigating the evolution of countries’ structural transformation over time and shows the impact of digitalization and Industry 4.0 in this regard

Addressing uncertainty and normativity in agricultural sustainability assessment: the example of agricultural digitalization

Agriculture's role in meeting global food needs has historically relied on increased productivity and land expansion. However, conventional agriculture, despite its productivity, poses daunting environmental challenges, including biodiversity loss, climate change, and water pollution. Socio-economic issues such as price instability and rural decline further complicate agricultural sustainability. Agricultural systems face repercussions from challenges they contribute to, such as climate change impacts and soil degradation, raising concerns about resource depletion and public perception of farming practices. While technological advancements such as digitalization offer promise for efficiency improvements, they also introduce potential risks. The United Nations Sustainable Development Goals and the European Union’s Green Deal's Farm to Fork Strategy underscore the necessity of adopting innovative and sustainable agricultural practices. However, achieving agricultural sustainability requires collaborative efforts beyond policy initiatives, involving stakeholders such as farmers, researchers, and civil society organizations. In this regard, context-specific approaches and comprehensive sustainability assessment are crucial for advancing agricultural sustainability and aligning with policy objectives. The primary objective of this thesis is to explore how integrative methodologies can enhance the state-of-the-art of agricultural sustainability assessments. To fulfill this objective, in the first study, a review of agricultural sustainability tools and models was conducted, assessing their thematic coverage of integrative sustainability concepts such as ecosystem services and the UN Sustainable Development Goals (SDGs). In the subsequent study, an interdisciplinary approach integrating policy, law, and foresight analysis was utilized to examine agriculturally related policies and laws, discerning their sustainability implications in the realm of digital agriculture under probable future scenarios. In the last study, stakeholder knowledge was integrated through a participatory modeling approach to construct a Bayesian belief network, which assessed the effects of digital agriculture on agricultural sustainability. The findings of this thesis demonstrate that existing tools and methodologies for assessing agricultural sustainability often lack sufficient integration with the ecosystem service framework and the UN SDGs. Additionally, the thesis emphasizes the advantages of an interdisciplinary approach integrating policy, law, and scenario analysis to evaluate the sustainability impacts of digital agriculture, showing that without clear policy and law to guide and regulate agricultural digitalization, that it will most likely not be leveraged toward achieving sustainability. Finally, the thesis showed that engaging stakeholders in participatory modeling can improve the contextual specificity of agricultural sustainability assessments by capturing both implicit and explicit stakeholder knowledge of local conditions. The thesis demonstrates different analytical tools for managing uncertainty in sustainability assessment. It further highlights that enhancing the comprehensiveness of indicators within sustainability assessment methods will enable better capture of site-specific characteristics of ecosystem service supply and use, while standardization of indicators will help operationalize outcomes for higher levels of sustainability assessment necessary for achieving sustainability goals

Aligning digitalization and sustainability: Opportunities and challenges for corporate success and the achievement of sustainable development goals

Digitalization provides valuable benefts for entities and offers unique opportunities to strategically address challenges associated with the United Nations Sustainable Development Goals (SDGs) to ensure a sustainable society. This chapter discusses potential cross-fertilization effects between digitalization and sustainability to catalyze the benefts and challenges of digital transformation on the corporate level and SDGs’ perspective by focusing on sustainable practices. This chapter provides valuable insights for professionals and policymakers on the trends of digitalization and how they can support the SDGs that become a global compass for navigating sustainability challenges

The contribution of digitalisation, channel integration and sustainability to the international performance of industrial SMEs

Purpose - The purpose of this paper is to understand the contribution of digitalisation, channel integration and sustainability to the improvement of industrial small and medium-sized enterprises (SMEs)' international performance. Design/methodology/approach - Based on a reviewof the literature, the authors developed a researchmodel that included six hypotheses about the relationships between the constructs studied: digitalisation, channel integration, sustainability and international performance. The structural equation model was tested with data from a survey answered by 200 exporting industrial SMEs, by means of partial least squares regression. Findings - The digitalisation of SMEs contributes positively to channel integration and sustainability, while channel integration is positively related to their international performance. Although a direct relationship between digitalisation and international performance was not observed, a mediated relationship through channel integration was confirmed. Additionally, the multi-group analysis according to the level of internationalisation revealed that sustainability positively influences the international performance of companies with a high degree of internationalisation. Originality/value - This study is original insofar as it examined the role of digitalisation in the international performance of industrial SMEs, considering the mediating role of sustainability and channel integration

The co-evolutionary relationship between digitalization and organizational agility: Ongoing debates, theoretical developments and future research perspectives

This study is the first to provide a systematic review of the literature focused on the relationship between digitalization and organizational agility (OA). It applies the bibliographic coupling method to 171 peer-reviewed contributions published by 30 June 2021. It uses the digitalization perspective to investigate the enablers, barriers and benefits of processes aimed at providing firms with the agility required to effectively face increasingly turbulent environments. Three different, though interconnected, thematic clusters are discovered and analysed, respectively focusing on big-data analytic capabilities as crucial drivers of OA, the relationship between digitalization and agility at a supply chain level, and the role of information technology capabilities in improving OA. By adopting a dynamic capabilities perspective, this study overcomes the traditional view, which mainly considers digital capabilities enablers of OA, rather than as possible outcomes. Our findings reveal that, in addition to being complex, the relationship between digitalization and OA has a bidirectional character. This study also identifies extant research gaps and develops 13 original research propositions on possible future research pathways and new managerial solutions