When Does Digitalization Drive Sustainability?
This question matters beyond academia. It shapes how business leaders make investment decisions, how policymakers design regulations, and how organizations pursue innovation and achieve climate goals. In this Research in a Minute video, postdoc Alicia Minnerup takes a closer look at this question, drawing on empirical evidence from her research to shed light on when and how digitalization can lead to better environmental outcomes.
Digitalization pays off under the right conditions
Analyzing a large sample of U.S. firms, the study examines the strength of their digitalization orientation and its implications for their environmental performance. The findings suggest that firms with a stronger orientation toward digitalization achieve better environmental outcomes. For example, they tend to use resources more efficiently, emit less, and invest more in environmentally friendly innovation. However, these advantages do not emerge by default. They materialize only when firms have clear sustainable governance in place, such as a sustainability board or ESG-linked compensation.
The key message? Digital technologies can drive sustainability, but only when governance and strategy are aligned. When firms align digital initiatives with ESG priorities, ecological improvements become measurable and meaningful.
Further Readings
