Crossing the Threshold: Moving Toward a Sustainably Digitalised Future

by DesignIntelligence

DesignIntelligence talked to Simon Carter, founder of corporate sustainability strategy practice Morphosis about sustainable digitalisation and his recent report, “Crossing the Threshold — A Primer for Sustainable Digitalisation in Real Estate and Cities.”

DesignIntelligence (DI): Tell us about how “Crossing the Threshold” came to be.

Simon Carter (SC): In 2014, a client asked me to map the digital space — from AI and augmented reality to autonomous vehicles, big data, etc.— for cities, real estate and their global property business. On laying out this enormous jigsaw puzzle, I realized that I had not appreciated the extent of the impact of digitalisation, nor was I seeing industry, government or society doing so. It clearly had serious implications for sustainability — taking a broad definition beyond just environmental sustainability — and this was getting very little attention.

In 2016, I commenced a self-funded project to put an environmental, social and governance (ESG) lens on digitalisation in real estate in cities. After two years of research it boiled down to 24 digitalisation-driven ESG issues for built environment stakeholders, both opportunities and risks.

In 2018, I published “Crossing the Threshold” with the Royal Institute of Chartered Surveyors (RICS), with the endorsement of key industry bodies; the Property Council of Australia (PCA), Green Building Council of Australia (GBCA), Infrastructure Sustainability Council of Australia (ISCA) and the Global Real Estate Sustainability Benchmark (GRESB). I coined the term sustainable digitalisation: “sustainable” because it’s ultimately about long-term prosperity and “digitalisation,” referring to the application of digital technologies. The longer version is responsible, ethical and sustainable digitalisation.

DI: What are the errors you see in our current path to digitalisation?

SC: Digitalisation is a mega-trend, alongside globalization, urbanization, climate change and others that is re-shaping our world. Day-to-day, we focus on microcosms of this, such as proptech, smart cities, digital disruption, or cyber security, but we are missing the big picture. There is a structural change occurring for humankind that needs to be carefully navigated.

Our species has evolved for one world. Let’s call it the real world, although Buddhists and quantum physicists may well debate this. Suddenly, we’re creating a second world, an unreal world, a digital world; augmented, virtual. We’re effectively conducting a very radical experiment on ourselves. In a minute moment in our history, we are throwing ourselves into this new digital world and it is very unclear how our species will be able to straddle the two, particularly with regards to mental well-being. Will we be able to tell the difference between the real and the digital?

And we’re addicted to it. We are so consumed within digitalisation that it is hard for us to have visibility of the cumulative affect it is having. Technology should be our tool, and shouldn’t be deployed for technology’s sake, which is how it’s likely to be used when we don’t have sufficient strategic oversight or mindfulness.

I see a lot of flipped-ness around the use of technology and the risks this presents. For example, people assume we’ve given our privacy away. But this is false. While we have forfeited a lot, we still have plenty of agency over much of it. It’s just a conversation the community is yet to have in a meaningful way. But it’s coming to a boil, such as we have been seeing recently around Facebook and social media.

Security is another big concern. We deploy IoT technology in our buildings to make them more environmentally efficient, healthier, or to provide better amenity to users, but the flipside of this can be increased security risk. One European hotel I read about was held for ransom by cyber criminals who locked all the room doors so people couldn’t leave or enter. The cyber-world leaks like a sieve and our exposure to this in the built environment is growing rapidly as more technology is deployed.

Digitalisation is ultimately a double-edged sword, with both opportunities, but also serious risks. Sustainable digitalisation means leveraging opportunities for social, environmental and governance benefits, while also mitigating the risks presented, which is currently not happening well.

Importantly, this is not a conversation about whether we digitalise or not. We must do so for many reasons — from health and science to environmental sustainability — and it is in our very nature as Homo sapiens to embrace technology. It is a question of how we go about it, and this must be done much more wisely. It must be responsible, ethical and sustainable.

DI: Do we need an agreed-upon philosophy for how humans engage with technology?

SC: Absolutely. We need regulation and standards, but underpinning that, we need a real philosophy, an ethical basis grounded on shared values. Of course, the values in Australia might be different from those in America or China, so that’s an interesting challenge.

Digital technologies employ billions of algorithms, and every algorithm inherently has an ethical framework based on certain values and purposes — often developed by people not trained in ethics. We need to better design them to ensure that the technology operates ethically and responsibly.

DI: Let’s talk about cities now. As the world population urbanizes at an unprecedented rate, how is digitalisation likely to shape our cities?

SC: There’s no end of opportunities for improving our cities, as we are seeing emerging in the smart cities space. For example, in Australia, and other parts of the world, city administrations are using technology to become much better service-based organization — more transparent, accessible, and responsive to their constituents.

Technologies like the internet of things, big data, etc., can be deployed across the city for environmental improvements in areas like transportation, waste and safety. With autonomous vehicles, we could begin to correct the deep problems of the 20th-century automobile-driven city, or, if they are not used responsibly, we could make it much worse. If we deploy new transportation models based on privately-owned autonomous vehicles, we could see more vehicles on the roads, greater congestion and increased pollution, and miss out on the opportunity to make our cities much more livable, equitable, healthy and environmentally sustainable.

The preferred solution using autonomous vehicles is a “diverse mobility system” where app-based platforms wrap up mobility as a service (MAAS). It connects modes of transport to get us where we need to go as effectively as possible: public transport, autonomous taxis, shared vehicles, bikes, walking and more. We’ll get more value out of public transport infrastructure and free up space used by cars, such as on the roads or parking. The quality of our streets will greatly improve, with many potential commercial benefits such as real estate uplift.

Now’s the time to decide between two very interesting paths, as the policies and planning and legal frameworks are developed for AVs and our future mobility systems. We won’t see enormous amounts of AVs in the next 10 years, but it’ll be ramping up.

DI: For those in A/E/C, how will their responsibilities change as digitalisation progresses?

SC: In many ways. They’ll have increasing responsibility and also a lot of new design and construction possibilities. Design and construction is no longer just about the physical building. We’re moving toward digital twins, so every property or piece of infrastructure in the real world will eventually also exist in the virtual world. That brings up some interesting questions about ownership. Another example, as architects, we deliver workplaces and then we walk away. With sensor technologies and analytics, we have extended responsibility now, because we can see how a building is performing.

Another responsibility is improving health, comfort and safety in the built environment, using available technologies such as sensoring.

DI: In your report, in a section called “Framework for Action,” you have some recommendations for organizations to embrace sustainable digitalisation. Can you tell us about them?

SC: Yes. It’s a simple framework to help organizations make a start. The first five actions are for any organization.

1. Digital literacy. Understanding the technologies, both the benefits and risks, all across the organization, including the board.
2. Strategy. Expanding sustainability, corporate responsibility or other such strategy to address the types of ESG issues   in the report, from personal privacy to electronic waste, health and more.
3. Ethics. The heart of the matter given the double-edge sword nature of digitalisation and need to work with difficult trade-offs. Develop a culture of ethical decision-making and be prepared to disclose how decisions are made.
4. Trustworthiness. We need the deep trust of our communities and other stakeholders for initiatives such as smart developments, but also as ESG issues associated with our organizations are exposed in an increasingly transparent business environment.
5. Prioritize mindfulness. An antidote to digitalisation, allowing us to get better visibility on If we can do this, these technologies will become the tools in our hands as they should be. It is also critical for mental well-being.

The last three are for organizations who want to provide leadership

1. Champion sustainable digitalisation. Being a voice and demanding that the use of digital technologies is responsible, ethical and sustainable, and supporting a mature and inclusive discussion on this.
2. Shared vision. Having a vision for our society to which we put technology to service. Technology must be a tool for the betterment of our lives.
3. Policy. Setting the right policies and legal and planning frameworks now, to best set us up for a sustainable future with digitalisation.

DI: This is so complex, yet these issues of our digitalised future seem urgent.

SC: Absolutely. We’re crossing the threshold into a digitalised future right now. The technologies have reached a critical point of maturity and are integrating. There is an enormous amount of acceptance, I often think complacency, and money is flooding into the space. There are very strong drivers pushing technology forward. Now is the time to make big choices about our digitalised future as we are unlikely to get the chance to do it right later on.

In Australia, we’re convening roundtables of people who get the nexus between sustainability and digitalisation to help plot a path for the real estate and infrastructure sectors with sustainable digitalisation: technologists, sustainability leaders, designers, landlords, developers, ethicists etc. Ultimately it must be a big discussion point for the community as it is   their future that is being shaped, currently with little voice from them.

What gives me hope is the journey we have had with climate change. Although it is by no means solved and we are already exposed to a lot of climate-induced damage, we have gone through the process with a highly complex global issue and learnt a lot about how to navigate that, especially where there are powerful interests vested in avoiding change.

Another thing that gives me hope is that people are already connecting the dots in their personal lives. They’re beginning to consider what it means to have smart listening devices in their homes, discussing ethical dilemmas such as whether the autonomous vehicle should kill the pedestrian or the passenger, or observing what is happening with the likes of Facebook. Technology is more personal than climate change, so it’ll be easier to bring it home to the individual.

So yes. It’s a big, exciting, and sometimes frightening challenge.

Simon Carter, founder of sustainability strategy practice Morphosis is a corporate sustainability and responsible investment consultant based in Sydney, Australia, and working internationally. He is the author of “Crossing the Threshold: A Primer for Sustainable Digitalisation in Real Estate and Cities,” available for free from www.morphosis.com.au