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Brain Circuits

How to become a digital sustainability leader in 5 steps

Published 20 January 2025 in Brain Circuits • 3 min read

Companies that excel in both digital and sustainable transformation attract a stock market premium – but how do you tap into that value? Here’s a five-step guide to outperforming your competitors.

1. Set tangible sustainability goals

We examined the market value performance of 154 firms that were continuously part of the S&P 500 from 2007 to 2021 and linked it to assessments of digitization and sustainability maturity for firms in each given year. Many digital sustainability leaders cited the importance of setting tangible sustainability goals. The key here is to focus organizational energy on searching for innovative solutions, often leveraging digital technologies.

 

2. Communicate progress

Effective communication highlighting achievements and areas for improvement is vital to successful transformation. Calling out achievements during the journey helps build and sustain a high-performance culture that encourages behavior shifts and drives a greater interest in digital and sustainability across the workforce.

 

3. Develop and implement measurement and analytics capabilities

What cannot be measured cannot easily be improved. To guide the prioritization of projects, it’s necessary to understand where the emissions come from. Clear assessments highlight the largest potential environmental gains. Improved measurement also serves as a risk-management tool as it can help organizations avoid reporting errors and being labeled “greenwashers”.

 

4. Establish governance to drive the complementary digitization-sustainability narrative

Transparent governance plays a pivotal role in promoting the understanding that digital transformation and sustainability can coexist and complement each other. To facilitate this, create global teams of leaders in their respective divisions to generate awareness and transparency around how digital and sustainability initiatives are rolled out.

 

5. Put appropriate compensation structures in place

Establishing appropriate compensation structures linked to the success of dual transformation efforts is also key in raising engagement and making the transformation an enterprise-wide undertaking.

 

Key learning

Achieving a position of digital sustainability leadership requires strong and public commitment to sustainability goals, clearly communicated internally and externally. It also needs to be built on a solid foundation of measures, KPIs, and analytics to allow organizations to focus on the right objectives and ensure that progress towards achieving them is tracked.

 

Further reading

Digital sustainability: It pays to be a leader, not a laggard

Use head, heart, and hands to lead sustainable transformation 

From pledge to performance: Using design thinking to achieve sustainability goals

Eliminating roadblocks to sustainable business transformation 

All views expressed herein are those of the authors and have been specifically developed and published in accordance with the principles of academic freedom. As such, such views are not necessarily held or endorsed by TONOMUS or its affiliates.

Authors

Michael Wade - IMD Professor

Michael R. Wade

TONOMUS Professor of Strategy and Digital

Michael R Wade is TONOMUS Professor of Strategy and Digital at IMD and Director of the TONOMUS Global Center for Digital and AI Transformation. He directs a number of open programs such as Leading Digital and AI Transformation, Digital Transformation for Boards, Leading Digital Execution, Digital Transformation Sprint, Digital Transformation in Practice, Business Creativity and Innovation Sprint. He has written 10 books, hundreds of articles, and hosted popular management podcasts including Mike & Amit Talk Tech. In 2021, he was inducted into the Swiss Digital Shapers Hall of Fame.

Evangelos Syrigos

Evangelos Syrigos is an Associate Professor of Strategy, Innovation, and Entrepreneurship in the Department of Strategy, Innovation and Entrepreneurship, at the University of Southampton. He was previously a lecturer at the ZHAW university in Switzerland and an Assistant Professor at Luiss Guido Carli University in Rome, Italy.

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