NEW RESEARCH | Digitalization as a tool for sustainability – the role of management in the “twin transition”

Digitalization and sustainability are often treated as two separate issues. But for smaller manufacturing companies, it is important that they are seen together if technology is to be an engine for making businesses more sustainable.

– When companies implement digital technology, they must simultaneously consider the various aspects of sustainability – environmental, social and economic. We cannot separate digitalization and sustainability, they must be seen as an integrated strategy – a so-called twin transition, says Hossein Rahnama, Luleå University of Technology.

Cooperation in the value chain

In his doctoral thesis, he studied the collaboration between mainly small and medium-sized technology suppliers and their customers, which are manufacturing companies. Both parties face several challenges, the research shows – ranging from high costs for the right skills and lack of management commitment, to low demand for sustainable solutions due to costs.

– My proposal is to create a value constellation, where the two parties develop tailor-made solutions together. In this way, they can overcome market barriers, as well as financial and organizational difficulties.

A framework for sustainability work

Hossein Rahnama has also developed a sustainability framework based on the PDCA (Plan-Do-Check-Act) cycle. It provides companies with a step-by-step tool to combine digitalization and sustainability:

• Plan: define strategy, resources and sustainability objectives.
• Do: implement solutions in practice, for example through eco-design and carbon measurement.
• Check: follow up and analyze results.
• Act: improve and innovate based on data.

Research shows that digital technologies are most useful in the Do phase, where they can optimize production, reduce resource use and measure environmental impact.

– I have focused on the leadership perspective. It’s not about which technology is best, but about how both management and the rest of the organization can use digital solutions to control, follow up and improve sustainability work.

Cost – the big challenge

When Hossein Rahnama interviewed technology providers three years ago, there was a lack of customer interest in sustainable solutions. Two years later, demand has increased, but cost remains the biggest challenge.

– Many companies focus on surviving in an uncertain world, rather than investing in sustainability solutions.

Long-term thinking for competitiveness

Despite the challenges, he sees great benefits for companies that dare to invest in the long term:

– Twin transition is not just about following rules. It is a chance to build resilience, attract customers and create new market opportunities. Companies need to think long-term, he emphasizes.

Contact hossein.rahnama@ltu.se