Everyone thinking about sustainable digitization

Digitization can contribute to a sustainable world. Examples include working online, with less commuting and decreasing CO2 emissions as a result. But the use of robots, artificial intelligence and online services also has its drawbacks, such as job losses or energy-guzzling data centers. Sustainable digitization is possible, but only if government, businesses and (pension) investors work together.

This was the conclusion of an online event organized by ABP and APG, entitled 'Making investments in SDGs work: sustainable digitization'. Digital technology is claiming an increasingly important place in the investments that APG makes for its pension fund clients. Not least because digital solutions can help with the major challenges faced by people and the environment, such as climate change or the COVID-19 pandemic.

For example, on behalf of its pension fund clients, APG invests in Moderna, a producer of a vaccine against COVID-19. "This biotechnology company had a vaccine design ready within a few days using digital design methods," says Ronald Wuijster, board member of APG and CEO of APG Asset Management. "Another example of an investment in digital solutions is Remote, in which we invest through private equity firm Inkef. This platform makes it possible for employees all over the world to work together and it handles the associated administrative matters for the company."

Downsides

But there is another side of the coin. Robotization is accompanied by job losses and the need for retraining. Data centers gulp energy - they are expected to account for 80% of the global energy demand within 20 years. The raw materials for computers, chips and other hardware are often extracted under difficult circumstances. Half of all cobalt, an indispensable raw material for batteries and accumulators for electric cars, comes from the Democratic Republic of the Congo. There are many instances of human rights violations and child labor in that country. Closer to home, the position of power of major platforms such as Facebook, Twitter and Google raises questions about data privacy.

In 1986, the Dutch government set up an institute to investigate the impact of technology on our lives: the Rathenau Institute. Among other things, this institute conducts research into how you can match the supply of and demand for energy with the help of digital technology. Melanie Peters, director of the Rathenau Institute: "Energy from sources such as wind, water and combined heat and power is generated locally. We want to find out how to match this supply as closely as possible to the demand of people and businesses, with as little waste as possible."

Control over your own energy

Major platform companies in the United States and China are already measuring people's energy needs through their thermostats. This way, they can predict when energy demand will peak and respond to this. "Convenient," says Peters, "but you don't want large businesses or other countries to determine when the energy supply in the Netherlands is switched on or off. This means you shouldn't only invest in the large technology companies, but also in smaller, innovative companies in the Netherlands or Europe. And talk to them about control."
Maurice van Tilburg is familiar with these kinds of start-ups. He is a director at Techleap.nl, an interest group for Dutch start-ups. "One of those start-ups, for example, has designed a smart tool that can save a lot of energy," says Van Tilburg. "With the help of their software, which uses artificial intelligence, among other things, you can plan better and therefore energy consumption in logistics can be drastically reduced."

All hands on deck

Digitizing in a way that contributes to sustainability is a complex issue for which there is no single solution. "Collaboration is crucial," says Van Tilburg. "For example, it is still often cheapest for businesses to throw away goods that they no longer use. Circular entrepreneurship must pay off and digitization can play a role in this. For example, the government can factor in the costs of waste processing. But there is also an important role for pension investors such as APG and its pension fund clients. Investors who are able to hold out for a long time, who think along with a business. International cooperation is essential in this respect, so that we do not all invent the wheel individually."

"ABP is already taking steps with investments in start-ups via the ABP Netherlands Energy Transition Fund (ANET) and Inkef," says ABP CEO Corien Wortmann. "But we want to do more. I call on the government to create more opportunities for public-private partnerships, so that government and (pension) investors can pool their money and expertise to make sustainable digitization possible."