Dual Transformation Create Breakthroughs for Businesses

Jul 16, 2024
Dual transformation has been mentioned by many countries and is an inevitable trend of the future. VertZéro will explain how these intertwined trends bring solutions to issues such as resource efficiency, supply chain risks, and the need for innovation in an ever-changing world.

What is Dual Transformation? 

Dual transformation refers to the integration of digital transformation to drive green transformation, using technology and data to promote sustainable development goals. This is a synergistic relationship, where digital transformation serves as a means to achieve green transformation goals.

The Vietnamese government is committed to net-zero emissions by 2050. Alongside this, businesses need to align digital transformation with green transformation to create dual transformation.

Green Transformation and Digital Transformation are two sides of a common trend:
  • Green Transformation focuses on changing business operations and fostering an environmentally friendly lifestyle. Key goals include reducing carbon emissions, promoting renewable energy, and adopting resource optimization and pollution reduction activities.
  • Digital Transformation involves integrating digital technologies across all aspects of business, such as data analytics, artificial intelligence, automation, and cloud computing. Conversely, ESG goals in green transformation help shape standards, procedures, regulations, and agreements for implementing digital transformation.

The role of green transformation and digital transformation 

Currently, businesses face increasing pressure to balance environmental responsibility with economic growth. Traditional models are challenged by climate concerns, new regulations, and changing consumer demands.

Green Transformation and Digital Transformation offer a robust strategy, helping businesses directly confront challenges, ensuring potential for sustainable growth while making positive contributions to the environment.

Estimated Contributions:

  • The IT industry is expected to contribute 20% to all activities aimed at green transformation.
  • Digital technology will accelerate progress towards Sustainable Development Goals by an additional 22%.

Examples in Manufacturing:

  • Technology helps businesses achieve emission reduction goals through resource optimization.
  • Innovating product design technology without generating waste during the testing process.
Dual transformation combines digital and green transformation

Understanding green transformation and digital transformation 

To operate effectively in the complex context of sustainable development and innovation, businesses need to understand the nature of both Green Transformation and Digital Transformation. These two trends, though distinct, are increasingly interconnected as businesses recognize their strong mutual support potential.

Green and digital transformations support each other

3.1. Green Transformation: Changing the Focus 

Green Transformation represents a fundamental shift in business goals and operations towards environmentally sustainable models.

Key Points Include:

  • Carbon Neutrality: Achieving net-zero emissions by reducing greenhouse gases and offsetting remaining emissions.
  • Circular Economy: Shifting from a linear "extract-produce-dispose" model to circular systems to minimize waste.

Examples of Green Transformation:

  • Renewable Energy: Transitioning to solar, wind, and geothermal power to reduce fossil fuel dependence.
  • Efficiency: Optimizing processes and technology to reduce energy use and resource waste.
  • Sustainable Product Design: Creating durable, repairable, and recyclable products to minimize environmental impact.

3.2. Digital Transformation: Harnessing Technology 

Digital Transformation involves the widespread adoption of digital technologies across all business operations, requiring integration of the following elements:

Technology:

  • Artificial Intelligence (AI): Foundation for smart automation, data analysis, and forecasting.
  • Cloud Computing: Transitioning data storage and processing to scalable, accessible cloud platforms.
  • Automation: Implementing systems using robots and software to enhance efficiency and streamline processes.

Examples of Digital Transformation:

  • AI: Enabling predictive maintenance and optimal energy management.
  • Cloud Computing: Facilitating remote work and supply chain tracking.
  • Automation: Precision agriculture and paperless office operations.

Green transformation, focused on sustainability, and digital transformation, driven by technological innovation, are becoming increasingly intertwined. Understanding their intersection is crucial for businesses seeking to enhance their competitive edge.

4. How the world applies dual transformation 

4.1. Smart Grids 

Digital transformation drives the development of smart grids, allowing seamless integration of renewable energy. AI-based optimization helps balance energy supply and demand flexibly, reducing fossil fuel dependence and minimizing emissions.

Benefits of Smart Grids:

  • Efficiency: Minimizes energy waste and optimizes resource use.
  • Resilience: Enhances system robustness against failures and disruptions.
  • Sustainability: Integrates renewable energy and promotes clean energy use.
  • Control: Provides consumers better information and control over their energy use.
Dual transformation in the energy sector

4.2. Agricultural Automation Precision agriculture is a modern farming method using data and technology to optimize resource use and increase productivity.

Benefits of Precision Agriculture:

  • Increased Productivity: Optimizes use of fertilizers, pesticides, and water, boosting crop yields.
  • Cost Reduction: Efficient resource use reduces production costs for farmers.
  • Sustainability: Protects the environment by minimizing resource waste and pollution.
  • Traceability: Ensures product quality and food safety.
Dual transformation in agriculture – Smart Farm application

4.3. Smart Buildings 

Integrating digital sensors, automation systems, and AI-based data analytics enables smart control of lighting, heating/cooling, and ventilation in commercial buildings.

Benefits of Smart Buildings:

  • Energy Efficiency: Optimizes use of amenities, leading to intentional energy use and cost savings.
  • Enhanced Experience: Creates a comfortable environment and increases convenience for building users.
  • Sustainability: Supports business sustainability goals, reducing carbon footprint.
  • Commercial Appeal: Increases competitiveness, attracting partners and tenants prioritizing environmental responsibility.
Dual transformation in construction – Application of Laplace

4.4. Manufacturing Transformation 

Businesses can design durable and easily reproducible products, reducing waste and creating new revenue streams.

Benefits of Dual Transformation and Circular Economy:

  • Optimized Design: Digital twins help simulate product efficiency, optimizing design to save materials and energy.
  • Extended Product Lifecycle: Predicts potential issues and supports effective maintenance, extending product use.
  • Easy Reproduction: Creates detailed digital replicas to guide reproduction, reducing costs and enhancing efficiency.
  • Waste Reduction: Minimizes faulty products and scrap, contributing to environmental protection.
  • New Business Models: Offers recycling, rental, or part replacement services based on digital twin data.
Example of Circular Economy

4.5. Financial Sector Transformation 

Environmental, Social, and Governance (ESG) factors play an increasingly important role in investment decisions. AI-driven platforms now analyze vast sustainability data to guide investment choices, directing resources towards green initiatives.

Benefits of Sustainable Finance:

  • Support Responsible Investment: Helps investors choose companies operating sustainably, benefiting the environment and society.
  • Effective Risk Management: Identifies potential ESG risks and devises suitable investment strategies.
  • Operational Efficiency: Enhances transparency and accountability, promoting improved business performance.
  • Increased Capital Access: Attracts investment from ESG-conscious investors.
Bank perspective on businesses meeting sustainable development standards

4.6. Smart Cities 

Smart cities utilize digital technologies to optimize urban systems, including transportation, waste management, water systems, and public services. Connecting sensors, networks, and data analytics enhances quality of life, attracts businesses and talent, and reduces environmental impact.

Benefits of Smart Cities:

  • Improved Quality of Life: Enhances transportation, security, environment, and efficient public service delivery.
  • Attracts Businesses and Talent: Creates an attractive investment and work environment for businesses and workers.
  • Environmental Impact Reduction: Efficient energy use, resource savings, and environmental protection.
  • Economic Development: Strengthens competitiveness and attracts investment for the city.
Copenhagen (Denmark) – Winner of the World Smart City Award

4.7. Remote Work Trend 

The remote and hybrid work trend, accelerated by the pandemic, offers potential environmental benefits. Cloud-based collaboration tools and video conferencing reduce daily commuting needs, thus limiting emissions.

Benefits of Remote Work and Green Commuting:

  • Environmental Protection: Reduces commuting emissions, contributing to improved air quality and climate change mitigation.
  • Cost Savings: Businesses save on office costs, and employees save on commuting and dining expenses.
  • Increased Productivity: Employees can flexibly arrange work hours, focus better, and increase work efficiency.
  • Talent Attraction: Businesses can attract talent from around the world with flexible work policies.

4.8. Tech Waste Management 

Digital technology plays a crucial role in addressing the growing problem of electronic waste. Platforms supporting repair, resale, and recycling of electronic devices help extend device lifespan and reduce environmental waste.

Benefits of Electronic Waste Management:

  • Environmental Protection: Reduces environmental pollution caused by electronic waste.
  • Resource Savings: Reuses parts and materials from old devices.
  • Social Responsibility: Demonstrates business commitment to the environment and community.
  • New Business Opportunities: Creates new markets for old devices and recycling services.

5. Benefits for businesses beyond profit goals

The strong combination of Green Transformation and Digital Transformation holds tremendous potential, offering benefits far beyond mere compliance with regulations. By strategically adopting sustainable initiatives and leveraging digital technology, businesses can achieve competitive advantages, enhance reputation, and build a stronger future.

5.1. Cost Savings: Efficiency as a Profit Growth Driver 

One of the most direct benefits is cost reduction through improved resource efficiency. Smart grids and building automation systems optimize energy use, cutting utility costs.

Precision agriculture and streamlined logistics through digital tools minimize waste, resulting in significant savings in material and operational costs. Financial benefits from focusing on green operations can significantly improve business profitability.

5.2. Innovation: Gateway to New Opportunities 

Green Transformation and Digital Transformation act as catalysts for innovation. Urgent needs drive the development of new products and services designed for the green economy – from renewable energy technology solutions to sustainable product development.

Process improvements, led by data analysis and automation, pave the way for higher efficiency and new business models, fundamentally changing the way businesses operate.

5.3. Reputation: Building Trust, Attracting Value-Driven Partners 

Consumers and talented employees increasingly prioritize companies with a clear commitment to sustainability. Actively engaging in dual transformation sends a positive signal to customers about a responsible business approach, leading to brand loyalty and higher trust levels.

5.4. Resilience: Ready to Face an Uncertain Future

Climate change and supply chain disruptions pose significant risks to businesses. Digital tools, such as predictive analytics and real-time supply chain monitoring, help businesses build resilience, anticipate, and mitigate supply shocks. Diversifying energy sources and investing in circular activities reduce reliance on potentially scarce future resources. Proactively applying dual transformation prepares businesses better to operate in a volatile environment and adapt to future challenges.

Opportunities for businesses in dual transformation

6. VertZéro – Partnering with businesses in dual transformation

Dual transformation is an inevitable trend as the world faces environmental and climate change issues. As a leading digital transformation consultant and implementer, VertZéro is a reliable partner, accompanying businesses in green transformation and helping them adapt to international market regulations.

We are ready to support businesses with strategic products and ESG reports. These aim to help organizations effectively report greenhouse gas emissions, strategize to mitigate carbon tax risks, and increase revenue by transitioning to "green suppliers" and meeting consumer demand for green products.

Green businesses can also access new capital sources – green bonds, helping reduce capital use costs for enterprises.

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