Technology services company DXC Technology (NYSE:DXC) has identified five software applications that will accelerate the sustainable transition in the next five years.
- Software is essential for almost every aspect of sustainability and it is expected to play a major part in advancing sustainable development.
- The switch to a circular economy will require the use of new technologies to track products, while AI will be used to manage natural resources.
- The energy transition will also see a move towards innovative solutions across various sectors.
Technology is essential for almost every aspect of sustainability, from increasing productivity, efficiency, and cost savings, to monitoring and modelling progress. As such, it will be crucial to drive sustainable development in the next five years.
“We can all look forward to the day when sustainability is the new standard and software will be at the heart of helping us create a climate-secure and competitive future,” said Henrik Hvid Jensen, chief technology strategist at DXC.
Organisations will adopt circular economy business models
If we continue with the current linear business model, we will need the natural resources of two Earths by 2030. Even though business-as-usual may seem the most profitable option for companies, it is already exposing them to significant market, operational, legal and business risks – which are likely to get worse.
Switching to the ’Rethink, Reduce and Recirculate’ principles not only will deliver cost savings and enhance competitiveness, but will also help businesses achieve their sustainability goals faster.
According to DXC, one of the biggest challenges of moving to a circular economy is collecting and sharing data about a product throughout its entire lifecycle. This can be addressed by using digital product passports (DPPs), which promise to act as a transparent record of a product’s sustainability, environmental and recyclability attributes. The European Union is positioning itself as a first mover in the space and expects most products in the region to be covered by DPP regulation by 2030.
AI will help manage natural resources
AI is expected to become increasingly important for addressing most environmental sustainability issues including biodiversity loss, energy, transportation, and the management of agroecosystems. For example, in the agriculture sector, AI can produce insight and increase automation to improve environmental stewardship and detect diseases and potential infestations before crops or livestock are threatened.
Indeed, the industry is using Internet of Things to support 4.0 agriculture, with the goal of battling waste, optimising production, and helping to protect the environment. These strategies involve tools that reduce the use of chemicals by providing crops with only what they require and when they require it, increase the effectiveness and efficiency of interventions, and preserve the quality and quantity of production.
Moreover, technological innovation not only impacts individual farms’ output, but data generates valuable insights that can positively influence policy decisions at the local or national level.
AI will increase the viability of renewable energy
According to McKinsey, global renewable electricity capacity will rise more than 80% by 2026 from 2020 levels. Europe is expected to add 36 million renewable-class assets – solar panels, electric vehicles (EVs) and energy storage – to the grid in 2025 and 89 million by 2030.
Automation and data analytics can help manage decentralised energy sources, direct excess electricity and flag potential grid weak points before they become significant issues, and help utilities redirect power to where it is needed in real time. This will, however, require legacy utilities companies to update their IT infrastructures and operating models to better manage the data.
There will be a major shift to software-defined EVs in the next decade
The automotive industry accounts for nearly a quarter of global greenhouse emissions and is a major cause of city air pollution. To address this, regulators in the US, Europe and elsewhere are reviewing policy and implementing laws to limit the sale of new gas and diesel cars.
This has pushed 18 of the world’s largest automakers to switch or pledge to switch, either completely or significantly, to EV manufacturing in the coming years. The EVs of the near future will be software-defined vehicles (SDVs) with automated capabilities to manage the car more efficiently with particular attention to environmental sensitivities. SDVs feature smart routing and energy optimisation that can mitigate issues related to charging capacity and range.
According to Deloitte, the automotive industry is now likely to go through a development process that is similar to what happened with smartphones and computers, which gradually reached physical limits pushing industrial transformation from hardware upgrades to software development.
Finance systems will be re-engineered to consume less energy
Transitioning to more environmentally sustainable operations is a top priority for banks and financial services organisations. More sustainable software, more efficient algorithms and better data processing are key to these efforts: in fact, the global green finance market has grown from $5.2 billion in 2012 to more than $540 billion in 2021.
In addition to growing environmentally conscious portfolios, the financial services sector is significantly reducing its energy consumption by enabling efficiencies in data centres. Upgrades include data deduplications and compression which can improve data storage layout and storage efficiency while slashing energy usage. Beyond the traditional financial sector, new approaches are helping to reduce the carbon footprint of cryptocurrency mining.