Abstract
In recent years, information technology (IT) has become a major value-adding factor both for individuals and corporate entities. The existing academic literature identifies multiple benefits of its implementation by organizations, including positive impacts on environmental sustainability and improvements in corporate social responsibility (CSR) programs. However, the existing evidence is inconclusive, and the information is mostly speculative in nature. In order to improve the situation, it is recommended to focus on developing a framework that could produce relevant and accessible data which then could be used to inform the stakeholders of the comprehensive effects of It on sustainability and communicate the importance of proactive stance on the matter.
Introduction
In recent years, information technology (IT) has become a major value-adding factor both for individuals and corporate entities. The existing academic literature identifies multiple benefits of its implementation by organizations, including positive impacts on environmental sustainability and improvements in corporate social responsibility (CSR) programs. However, the existing evidence is inconclusive, and the information is mostly speculative in nature. The aim of this research paper is to analyze the available literature in order to obtain the information on the possible effects of IT on environmental sustainability and corporate social responsibility, determine its validity, locate the possible weaknesses and gaps in understanding, and outline the direction for future research on the matter.
Relevant Literature
The influence of information technology on both environmental sustainability and, by extension, corporate social responsibility, becomes gradually more visible in the academic literature. This trend can largely be attributed to the fact that the IT segment proved to be among the most influential aspects of economic, social, and cultural change occurring since its introduction and persisting to this day (Vickery 2012). However, it should be acknowledged that while the issue is being explored theoretically with the use of models and assertions, there is a notable lack of reliable and focused studies confirming the suggestions.
Relationship between Information Technology and Environmental Sustainability
The most evident link to environmental sustainability pointed out in the literature is derived from the physical characteristics of IT performance. The initial assertion is that the diminishingly short time required for the transfer of information plays a definitive role in the efficiency of many, if not the majority, of human activities (Srivastava et al. 2012). At the same time, the involvement of resources necessary for its functioning is considerably smaller than any of the alternatives. Therefore, it is reasonable to conclude that the net effect of informational technology implementation by the organizations includes energy savings and the overall decrease in expenses. It is also worth mentioning that the current consensus holds information as one of the intangible entities responsible for value generation in the global economy. With the gradual shift towards the described values, it is reasonable to recognize the growing importance of the issue, as was denoted by the scholars exploring the topic (Chaudhri & Wang 2007). Recently, several systemic inquiries were made to substantiate these assertions, yielding somewhat more modest results, but the overall approach has remained largely the same.
In order to systematize the effects of information technology on environmental sustainability, several frameworks were suggested. The most popular one disaggregates the effects into three categories, namely the direct impacts, enabling impact, and systemic impacts (Vickery 2012). The first category, direct impacts (also known as first-order impacts) deal with the environmental imprints directly caused by the functioning of the IT industry.
Broadly speaking, any product or service designed to improve the environmental sustainability, such as technology used for monitoring the level of pollution, platforms for statistical analysis used to improve the understanding of the situation, and the communication channels devised for better transparency of sustainable practices account for the positive effect of IT industry. In addition, any activity directly influencing the environment (e.g. transportation, logistics, and construction) and benefitting from It-related augmentations can be considered a direct impact. On the other hand, it should be acknowledged that the said effects are not necessarily positive. The manufacture, production, utilization, and disposal of products necessary for the industry are expected to produce emissions and generate carbon imprint similar to those of other industries.
The easiest example is the manufacturing of equipment for data transfer, although it also includes the installation of communication channels and transportation-related emissions. It should be noted that the estimated negative impact does not exceed the expected norm while the positive effects show significant potential for improvement and have inherent characteristics (e.g. longevity and customizability of the equipment) that make it fundamentally beneficial for the sustainable activities (Williams 2011).
Enabling impacts, also known as second-order impacts, include effects that can be derived from Its implementation by other industries but not necessarily aimed at increased sustainability. Enabling impacts are the ones that are most widely recognized and popularly attributed to informational technologies in the literature. The brightest example is the optimization capabilities offered by IT-related tools and technologies. The improvements in logistics, optimization of resource distribution patterns, and automated systems responsible for “smart” activities are usually implemented by various organizations in order to enhance financial performance and minimize waste of resources.
However, these advancements often involve resource savings and decreased environmental impact, either directly (e.g. through economizing the amount of fuel through automated consumption cycle) or indirectly (e.g. by reallocating resources and thus reducing redundancy). Dematerialization is another enabling factor that is prominent throughout the modern world, with lower reliance on the physical representation of products and services. For example, digital means of information storage are already almost ubiquitous while their physical counterparts are considered obsolete, impractical, and generally less valuable. However, similarly to the direct impacts, the enabling ones can have negative effects on sustainable practices.
For instance, some of the technological advancements necessitated by the developments in the information technology industry require either materials of superior quality or of a specific variety, thus putting additional pressure on the suppliers of raw materials and the supply chain. Besides, many products that incorporate IT pose an additional challenge for maintenance, disposal, and utilization. The easiest example is the growing presence of rechargeable energy sources in consumer electronics that require a complex set of utilization procedures with a combined negative effect on the environment (Williams 2011). While manageable, these requirements undermine the sustainability effects of information technology. As is apparent from the information above, evaluation of the net effect with instruments such as the life cycle analysis is the most viable approach to determining the overall effect of the enabling impacts.
Finally, the systemic, or third-order impacts, are caused by changes in the behavior of stakeholders associated with the presence of information technology in the professional and personal environment. The easiest example is the communication opportunities offered by the Internet for publishing information related to sustainable practices. This aspect visibly relates to one of the direct impacts described above (the equipment and tools that make the publication possible). However, it should be understood that the presence of the opportunity changes the expectations of the stakeholders (e.g. the customers or the general public) and eventually necessitates the implementation of disclosure of environmental information by all the actors in a given field. Another observable effect is the shift in consumer preferences driven by the onset of the IT. Specifically, the perceived superiority of digital media stimulates consumer decisions in support of sustainable and environmentally-friendly technologies and their eventual adoption by corporations. It also facilitates a more dynamic adjustment of pricing models that allow for better coordination of resource consumption and prompt end-users to resort to sustainable behavior (Vickery 2012).
However, similarly to the cases discussed above, the systemic effects are not limited to positive instances. In some cases, the net effect may be far less optimistic due to the deterioration of efficiency with each subsequent stage of implementation, where the cumulative effect of the energy consumption necessary to supply all the devices can decrease, or, in certain instances, negate the positive impact of IT-related savings. Similarly to the enabling impacts, the systemic ones need to be evaluated comprehensively and with attention to details in order to locate all possible shortcomings and gaps. However, the multitude of the involved factors and the complexity of some of the involved metrics make it an extremely challenging task, for which reason no definitive information is available which would conclusively assess the effect.
Assessment Issues
As was outlined above, the presence of the positive effects does not constitute the existence of definitive improvement. In at least some instances, the expected positive outcome is compromised by poor implementation of IT tools and methods. In other cases, the inadequate prediction models devised for assessment of unfamiliar and unique software or hardware result in serious discrepancies between the expected improvements and the actual results. The effect is more prominent with each subsequent order of impact. For the first-order impacts, the benchmarks and evaluation methods of related industries are largely applicable since they deal with very similar inventories and processes (Williams 2011).
For example, the process of manufacturing a monitor or a sensor can be definitively assessed with the precise calculations of associated emissions. For the second-order impacts, however, the assessment is more challenging. For example, the implementation of a certain statistical tool for processing the data may result in the alteration of the organizational policy after the retrieval of the updated results, but such development can only see limited use in prediction of the large-scale effects, and the estimates of different analyses usually vary due to the difficulties of disaggregating the influence of informational technology in each specific case (Malaquias, Malaquias & Hwang 2016).
Finally, for the third-order impacts, which involve behavioral alternations of a large number of stakeholders, the complexity of involved factors is such that all current attempts can be described as selectively acknowledging the most significant factors and assigning weight to them based on the existing data. For instance, the installation of a sensor-based detection device may result in the detection and/or prevention of environmental violations by the entity, which constitutes direct, or first-order, impact. However, the potential impact on the future behavior of the involved actors resides in the domain of the systemic (third-order) impacts and is mostly modeled rather than definitively and quantitatively assessed on most occasions.
The life-cycle assessment (LCA) is commonly used in the assessment of the environmental impacts of the first and second orders. In the majority of instances, it can be successfully adopted for evaluation of the influence of information technology (Williams 2011). However, in some cases, the LCA assessment cannot cover the entire process since the complex supply chains contain elements that do not produce meaningful data. To address these shortcomings, the LCA can be modified to include all available factors. However, doing this requires aggregation of multiple outcomes into a single dataset, with the potential mixing of otherwise incompatible data (Williams 2011). Currently, several attempts have been made to adjust the LCA approach and minimize the error caused by aggregation, but no definitive solution has been developed to date.
The third level, which involves decisions and behaviors of diverse audiences, requires an even more encompassing approach. For this reason, the assessment methodologies that deal with this level often incorporate environmental sociology to account for large-scale factors. It is important to understand that while this adds to the inclusiveness of the assessment, it also compromises the precision of the resulting measurements as a result of including models of a high degree of uncertainty (Vickery 2012). Therefore, it should be acknowledged that the overall assessment techniques do not offer definitive results and have several limitations that are not conclusively addressed.
Link to Corporate Social Responsibility
By definition, corporate social responsibility (CSR) aims at increasing the accountability of the organization and promoting value-adding activities that reach beyond the compliance with the existing laws and regulations (Malaquias, Malaquias & Hwang 2016). In addition to the well-being of employees and society in general, CSR programs often target the environmental domain that is visibly related to the social responsibilities of a business entity. It is important to note that the direct link between corporate social responsibility and information technology is not firmly established in the academic literature. However, the overview of the best-represented elements of CSR programs combined with the impact of IT solutions on environmental sustainability detailed above can establish a superficial link sufficient for further inquiry.
The diminishing role of the government-based environmental regulations and the disillusionment in their efficiency resulted in the eventual relocation of responsibilities to the organization-based CSR programs. One of the most significant drivers of CSR is the increasing demand for transparency of organizations’ activities, including the disclosure of information pertinent to the environmental imprint (Malaquias, Malaquias & Hwang 2016). This aspect of CSR can be definitively linked to the usage of IT-based communication since it is reasonable to expect from the companies to seek the least resource- and time-consuming options of delivering information to the stakeholders. In addition, the demand for disclosure modifies the expectations of the public and thus falls within the category of the third-order impacts of the IT.
Another issue that is common to the CSR field is the changing criteria by which investors evaluate the performance of organizations. Aside from the inclusion of ethical considerations, the most evident shift is towards a more reliable and comprehensive data, which also requires the involvement of tools for statistical analysis and, by extension, depends on the presence of information technology. The allocation of resources to environmentally oriented goals also necessitates a comprehensive understanding of the most perspective areas, which can be enhanced through the use of its equipment. Next, minimizing direct environmental impact is one of the identified goals of many CSR programs.
While this objective can be achieved through many different means, the It-related evaluation and monitoring tools are playing an increasingly greater role in this process. Therefore, a definite link can be identified as the direct (first-order) impacts. Finally, the broadening scope of public attention leads to the attempts by the companies that rely on supply chains to seek responsible social practices in the policies of their suppliers (Vickery 2012). This effect can mostly be attributed to the third-order impacts, since the growing popularity and presence of the Internet as a source of information altered the consumer behavior towards better-researched and informed choices. This behavior, by extension, created the need for greater responsibility and provided greater opportunity to sustain customer loyalty. Therefore, the information technology, in this case, is indirectly involved as a driving force behind CSR. Therefore, we can conclude that in most cases, the influence of information technology on environmental sustainability will lead to the subsequent effect on the respective area of corporate social responsibility of the organization.
Relevant Evidence
As was detailed above, the exact impact of information technology is difficult to identify due to the inherent diversity of its influence. Therefore, the research includes a wide variety of evidence that satisfies the following criteria:
- The described case is either directly aimed at environmental improvement or results in it.
- The case either explicitly identifies the involvement of information technology as a defining factor or such involvement can be implied.
Based on these criteria, several cases were identified and summarized.
Pure Air Lovers Society
Suzlon Group is an India-based company that manufactures wind turbines. As their products are associated with sustainability, the decision was made to expand the scope of their philosophy of sustainable development to include a wider group of stakeholders. The P.A.L.S. (Pure Air Lovers Society) campaign was launched that targeted two objectives: to raise awareness of the threat of environmental pollution and to create the community united by the common goal of improving the quality of air in any meaningful way (Mishra 2012). The main challenge of the campaign was the necessary shift in focus from the commercial perspective towards a more encompassing approach that would attract as diverse an audience as possible. The online website was chosen as a platform due to its accessibility and the ability to benchmark the success of the campaign through traffic measurements. The campaign also implemented a range of tools, all of which were IT-related, including the carbon calculator (a web-based tool offering an estimation of the emitted carbon dioxide), Air Quality Index (a real-time monitor of the air quality level in different regions of the country), Pollution Under Control Reminder (tool which tracks the validity of the PUC card), and a variety of information sources and initiatives. The campaign was a success and is currently considered the most successful and best-recognized one in India. Four months after the launch, the number of daily registration on the website exceeded 8000 entries (Mishra 2012).
Tata Steel
Tata Steel is the part of Tata Group, an Indian enterprise involved in manufacturing of a wide variety of products. Since the recognition of the accumulation of resources in the hands of large powerhouses, Tata Steel, one of the Tata Group’s companies, decided to exemplify socially responsible practices by implementing a range of programs covering adult literacy, education of the population, improvement in healthcare, and rehabilitation of handicapped individuals (Srivastava et al. 2012). Currently, from five to seven percent of the company’s revenues are allocated for the said programs. Some of the most notable achievements were made in the field of healthcare, where the company-funded AIDS awareness program resulted in the dramatic improvement in the reported awareness among the general population (Srivastava et al. 2012).
In addition, the company was responsible for improvements in coordination of blood donation process and assisted with the establishing of the infrastructure for the screening of tuberculosis. While the financial assistance was doubtlessly the key factor responsible for campaign’s success, the resources necessary for robust medical practices included the analytical platform capable of processing a massive amount of patient data. In addition, the initiative aimed at increasing the immunization rate among the population was made possible at least in part by the incorporation of patient data storage tool that would not violate the ethical norms. As a result, all of the individual programs of Tata Group were considered successful, and at least two were awarded TERI award for CSR and a Global Business Coalition Award for spreading awareness about HIV/AIDS (Srivastava et al. 2012). The evidence is consistent with the description of the direct and enabling impacts.
Cisco
Cisco is a global IT company that has a long history of outstanding CSR practices, including the Cisco Networking Academy, a career-building program that provides resources for the organizations around the world, and the Cisco foundation, which seeks partnerships and funding of non-governmental organizations. However, the most evident progress is made in the field of optimization of the supply chain management and the reduction in resource consumption. The latest annual report published by the company lists more than 100 completed projects aimed at increased energy efficiency and renewable energy research (Cisco 2016).
The report also indicates that a significant portion of improvements results from their products (networking equipment and software), which promotes remote collaboration and teleworking, increases office mobility, optimizes the utilization of the organization’s territory, reduces the need to travel, and introduces cloud computing which has greater capacity for energy efficiency. As a result of these developments, the greenhouse gasses (GHG) emissions were reduced by 37 percent, with the designated milestone of 40 percent reduction by FY17 (Cisco 2016). In addition, currently, 77 percent of the energy generated by the company comes from renewable sources (and is expected to increase by 25 percent each year). Finally, the cumulative weight of avoided GHG emissions has exceeded 391,000 tons, with the milestone of a total of 1 million tons by the year 2020 (Cisco 2016). In addition to the impressive overall performance, the company’s success is confirmed by the reception of the Golden Peacock Award for CSR. The described results can be characterized as first- and second-order impacts.
eBay
eBay is an international company that offers an online platform for e-commerce. It is best known as a facilitator of small-scale consumer-to-consumer sales in the form of an auction, although it also provides possibilities for large-scale operations for businesses. In addition to the high level of popularity, convenience, and security, the company was cited as contributing to the overall environmental sustainability through its effect on reusability op material goods. Its services ensure the continuous use of a given product by the interested stakeholders, allegedly prolong the items’ life span and, by extension, decrease environmental impact associated with the manufacturing process (Munshi 2012).
However, some experts were less optimistic in their speculations and pointed out to the transportation means required for a complete transaction in most cases that may decrease or even negate the positive effect of the reusability. Both the capacity for improvement and the criticisms of inefficient resource use eventually prompted the company to adopt a range of initiatives aimed at reaching consistency in their business practices. One of the improvements was the modification made in the search engine that resulted in the selective display of results based on the available geographical information. This modification essentially restricted the display the listings of certain individually-placed goods that are hard to transport to the customers from the nearby locations to discourage inefficient shipments.
Importantly, the policy only targeted the shipments with poor resource utilization ratio, whereas large-scale shipments remained unaffected. In this way, the activities leading to the greatest carbon imprint were minimized. Another initiative that targeted the gaps in transportation resource utilization included establishing the partnership with United States Postal Services (USPS). The collaboration was meant to improve the logistical issues in deliveries and oversee the details in order to address the least sustainable ones (Munshi 2012). The results of the initiative include the inclusion of the environmentally-friendly priority mail packaging and the introduction of the eBay Box, a durable packaging option that is encouraged for continuous reuse and thus aligns well with the reusability concept discussed above.
To further improve the effect of the campaign, the company collaborated with several non-profit organizations involved in promotion of environmental sustainability, such as WorldOfGood and the Knetgolf initiative, in order to ensure broader coverage and raise awareness. With the exception of the packaging options, all of the described initiatives rely on information technology in order to reach the set objectives. The impacts of the campaign are mixed with the notable dominance of the second- and third-order ones since they mostly regulate the resource use indirectly, through enhanced logistics and consumer behavior modification.
Teys Australia
Teys is one of Australia’s biggest producers of meat that recently partnered with one of the global leaders in the industry, Cargill Beef. Meat processing is among the most energy- and resource-consuming segments of food and beverage industry, which prompted the company to develop and implement the Sustainability Advantage Program following the joint venture. The most prominent direction of the campaign was the upgrades made to the company’s equipment to maximize the efficiency of resource consumption. Since a lot of water is required for technical purposes, the utilization practices were implemented to reuse the wastewater and decrease disposal rates (NSW Government 2012).
Another important aspect is the introduction of consistent monitoring and collection of data on the use of water, natural gas, and other resources and the amount of emitted CO2 (NSW Government 2012). The collected data is then processed and compared to the existing metrics from the preceding periods. This practice expands the scope of the disclosed information and improves the understanding of benchmarking the progress. Finally, the company has made a sustainability-oriented investment of $13 million to install the system for collection of methane gas that would allow cutting down the consumption of natural resources for energy purposes and upgrading the water discharge process in order to expand the list of reusability options.
Finally, the program includes the communication with local authorities that explains the importance of the achieved milestones and raises awareness among other businesses in the segment on the benefits associated with the activities. The results reported by Teys include savings of more than 500,000 megajoules of energy, reduction in demand for natural gas by 10 percent, reduction of carbon dioxide emissions by 27 percent, and the reduction in water consumption per unit of production by 20 percent in a year after the launch of the program (NSW Government 2012). The majority of the achievements are dependent on the use of information technology either directly (through the installation of the monitoring equipment) or indirectly (via the date processing equipment used for analysis and benchmarking). Therefore, the majority of the observed impacts can be characterized as first-order effects.
Google is one of the most well-recognized examples of organizations working in the It segment. Its contribution to the overall performance of the industry is significant enough to attribute many systemic impacts associated with awareness of the population to the capabilities of its seminal search engine. However, the company has taken advantage of its R&D capacity to implement many CSR-related innovations in its corporate policies. The majority of the said innovations are informative and promotional in nature, such as the assistance in organizing farmer markets. The most widely-publicized example is the “green mowing” initiative which employed 200 goats for trimming the grass around the company’s headquarters in Mountain View Campus (Lovreglio, Meddour-Sahar & Leone 2014).
It should be pointed out that the exact impact of such practice is not well-researched and is of questionable value as a sustainable practice. However, it can be considered a successful way of attracting public attention to the issue of sustainability and visually align its practices with the accessible and attractive imagery. In other words, Google’s campaigns are aimed primarily at changes in consumer behavior and increased understanding of the importance of sustainable practices. Therefore, they can be considered as predominantly as systemic in nature. It should also be acknowledged that the exact effect of such campaign cannot be conclusively measured, although it is reasonable to assume its overwhelming impact considering the company’s scope of influence. In this regard, the high degree of recognition and media coverage can be considered as indirect evidence of its success (Lovreglio, Meddour-Sahar & Leone 2014).
Relevant Empirical Studies
As was detailed above, the assessment of the effects of IT on CSR efficiency is complex and is not accompanied with established frameworks. For this reason, reliable evidence in the academic literature is scarce. Two studies were identified as directly related to the topic of the current research. A study by Chaudhri and Wang (2007) aimed at assessing the extent to which the companies in India rely on communication opportunities offered by the Internet to back their CSR programs. The results indicated that of the 100 studied companies, only a small fraction (30%) presented relevant CSR information on their web resources (Chaudhri & Wang 2007). These results indicate the disparity between the perceived recognition of the importance of sound CSR practices and the readiness for their proactive implementation. However, the study does not provide conclusive evidence of the benefits associated with proper CSR practices for companies that have IT-based CSR in place. In addition, it should be noted that the rate of development of the IT industry demands frequent updates of such data. Therefore, the study is of a marginal relevance of the research.
A recent study by Malaquias, Malaquias, and Hwang, (2016) evaluated the impact of using information technology on CSR effectiveness. By utilizing structural equation modeling, the authors identified a statistically significant positive relationship between use of IT and several categories of CSR (Malaquias, Malaquias & Hwang 2016). To date, this is the most reliable evidence in support of the positive influence of It on CSR. Nevertheless, it should be pointed out that the authors did not distinguish between the sustainability-oriented benefits and other categories. In addition, the study was limited to firms located in Brazil, which limits the scope of the study.
Analysis
The evidence presented in the previous section has two issues that limit the possibilities of the analytical approach. First, all of the case studies are focusing on the positive impacts and either ignore or fail to detect the adverse effects. Since neither of the presented cases contains information that suggests the presence of the negative influence, for the following analysis it will be assumed that the authors accounted for the possibility and factored it in their results. Second, neither of the case studies contains information that is cross-compatible for the quantitative analysis, mostly due to the diversity of the areas which were analyzed and the lack of definitive metrics for many of them, such as changes in behavior. Therefore, the analysis consists of substantiating common allegations of benefits with findings of empirical research, gathering evidence from case studies, summarizing the results, identifying the limitations of the existing data, and outlining the direction for further inquiry.
Of six individual cases, the direct impacts were apparent in three cases, with an apparent link to manufacturing of physical goods, and the systemic impacts were identified in three cases, two of which were associated with services. The enabling impacts were identified in all six cases. Considering the evidence from the study by Malaquias, Malaquias, and Hwang (2016), the positive influence can be asserted in all instances.
Discussion
The findings of the research are largely consistent with the speculations offered by the literature. The cases list only positive impacts and the available research points to the positive relationship between IT-based CSR initiatives and company’s performance. The impacts differ by company, which can be attributed to the organization’s specialization (the first-order impacts) are pertinent to the companies which deal with manufacture and production while the third-order impacts are more common among the companies specializing in services. It should be mentioned that the sample size is relatively small for confirming these suggestions, so further inquiry is needed to substantiate them. The second-order impacts are the most common ones, possibly due to the scope of their definition. Finally, despite the apparent positive effects, only a fraction of organizations practices the implementation of IT in their CSR policies.
The information located during the research lacks cross-compatibility and omits the assessment of the negative factors, which can severely undermine the efficiency of the studied initiatives. Therefore, further research is required to understand the overall impact of the practice.
Conclusion
The existing literature presents multiple evidence of the positive impact of information technology on environmental sustainability and CSR programs for organizations. However, the evidence is predominantly inconclusive and largely not cross-compatible, which prevents us from definitively assessing its value. In addition, there is an observed lack of readiness among organizations to pursue IT incorporation in its CSR practices. In order to improve the situation, it is recommended to focus on developing a framework that could produce relevant and accessible data which then could be used to inform the stakeholders of the comprehensive effects of It on sustainability and communicate the importance of proactive stance on the matter.
Reference List
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