Digitize or save the world. Digitize, while saving it.

Regardless of your stand on AI (good vs. evil; costly and unprofitable vs. just looking for a business model, while focusing on growth and reach for now), AI and the whole tech world is consuming more and more of the electricity and resources of the world, with the goal of making reality smarter, monitored to capture relevant data, and with an increasing interaction between physical and digital, if we want to have a true impact. Digitization is urgent, if we want to reap tons of efficiencies and unlock new profit pools.

The same digitization relies on groundwork (LLMs’ training for example, or the construction of lots of new servers’ facilities) that risks destroying the planet, if we look at the magnitude of the energy needed to set up a 4.0 society. With the information that we have today, GenAI queries alone, without anything else (from labs to servers, to training) would need the energy of two new nuclear reactors every single year. Digitizing and making sense of all data in the world, via physical and digital AI, would require the redesign of our global energy strategies and policies.

This is why, as a business, it’s important to understand and map exponential technologies’ consumption, and to prompt the same discussions with suppliers and all IT providers. This needs to be one area of accountability for IT and Procurement Departments in any business.

Caterina Alessia Dibitonto, attorney, author and a member of the Innovation Commission of the Milan Bar Association, helps us understand how to hire the right partners, hit business targets, while having an eye on what the tech that we buy does to our communities and the planet.

“European regulations (such as the CSRD, Corporate Sustainability Reporting Directive) impose ESG reporting obligations throughout the entire supply chain. As a result, businesses are required to demonstrate ESG compliance not only internally but also with their technology partners,” says Dibitonto.

The buyers of tech services should rely on Legal professionals, who need to become more tech and ESG-related topics’ savvy. This approach needs to go beyond compliance. Businesses need to have a point of view on the direction where the world is going, on what consumers will want to see their favorite brands to do and where tech-stacks are headed.

“To better understand this topic, let’s look at some examples related to each element of the ESG acronym. For Environmental (E), clauses might include requirements for ‘green’ data centers, powered by renewable energy, monitoring and reducing the digital carbon footprint, or environmental reporting obligations (such as Power Usage Effectiveness, or PUE). Social (S) clauses can involve protecting personal data and privacy (considered part of ‘digital social rights’), respecting workers’ rights throughout the supply chain, and including DEI criteria (Diversity, Equity, Inclusion) in policies related to personnel within the organization.

Governance (G) clauses may include the obligation to comply with international ESG standards (such as ISO 26000, GRI Standards), the adoption of codes of ethics, and anti-corruption policies. Managing ESG clauses within technology service contracts requires the use of legal tools, such as ESG-SLAs (Service Level Agreements), periodic ESG audits that can also be conducted by third parties, indemnity and compensation clauses for ESG-related reputational damage, and the drafting of smart contracts using blockchain to automate the verification of ESG KPIs,” concludes Dibitonto.

The world has changed, since the advent of a new Presidency in the US and more war conflicts around the world. Sustainability has become less of an urgent item on businesses’ agendas. We tend to manage companies with a ‘perma-crisis’ approach. Sustainability needs to be a part of the way we understand, buy, adopt and roll-out tech-stacks. We need to digitize the world, to make it smarter and more efficient. We need all the brainpower and the machine-power there is to transform our most strategic industries, from mobility to education, from healthcare to finance. If we want to do that, we need a sustainable energy policy.

There was a clash between progress and the environment until very recently. We don’t have the luxury to afford a dilemma or radicalized discussions. We need to save the world, so that we can AI-it, Blockchain-it, and digitize it at the end of the day. Dear CEOs, start talking energy to institutions, to your suppliers, partners, employees and consumers. Share, exchange, ask, search, compare, act. We can digitize and live.

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