CDR – What next?!

10 September 2019

Corporate Digital Responsibility – what is it, and as a New Zealand manufacturer, do I have to worry about it? You may feel that there are just enough ‘responsibilities’ for you to worry about already, but the reality is that when it comes to purchasing decisions, what might have been considered to be ‘extraneous’ considerations in the past, are playing an increasingly important role, even in business-to-business transactions. And in a constrained labour market where highly qualified people have a choice, they may well apply the same ‘extraneous’ criteria when choosing where to work.

CDR – as the name suggests – is a demand that your company acts responsibly in the application and use of digital technologies. The first and obvious consideration is around people– your employees, and your customers - and data privacy. How do you use the information you hold about people, how do you keep it secure, whom (if anyone) do you give access to the data you hold, and are you being transparent about your practices? That may not be a big issue (yet), but as manufacturers begin to use digital technologies to monitor processes in real time (smart factory), or remain digitally connected with their products once they leave the factory (smart products), data issues become more prominent, and it is a good idea to consider these issues right from the planning stage.

The second area is the use of Artificial Intelligence (AI) and bots. Again, you may think “not (yet) for us”, but at the current rate of expansion the use of AI in analysing factory performance data, for example, will be not far away. It would go far beyond the scope of this article to even list all the ethical issues raised by the use of AI and bots. But again, we need to prepare. A recent survey of 5,310 participants (1,103 employers + 4,207 employees) from six countries (USA, Germany, the UK, Japan, Australia and New Zealand) found that only 23% of employers currently have a written policy on the ethical use of AI/bots, but 40% of employers without a written policy, and 54% of their employees, said they believe their companies should have one.

Last, but not least, CDR is about digital products and services. Rapid product development cycles carry an inherent risk of longer-term issues, such as e-waste management, being given insufficient consideration. Likewise, excitement about break-through digital technologies may lead to social or environmental concerns being pushed aside. Take e-cigarettes as an example, leaving a waste product combining toxic (nicotine) and e-waste with complicated and expensive processing requirements. Or take blockchain technology. According to recent estimates by the International Energy Agency, Bitcoin mining has consumed about 46TWh of electricity in 2018 – that’s almost 3.7 times New Zealand’s domestic electricity consumption in 2017.

We have seen a ‘division of labour’ arising between producers/manufacturers and customers, with the latter applying environmental criteria when making purchasing decisions where the vendor is perceived to be failing to do so. Take plastic packaging as an example. In the case of highly complex digital products and services, however, it is often far more difficult for the consumer to appreciate the full life-cycle consequences of what they buy, leaving the manufacturer or service provider with a strong incentive to care in order to sustain an enduring business model.