BigTech and FinTech Befriending Circular Economy

IES Charles Rudd Distinguished Public Lectures: CIRCULAR AND DIGITAL ECONOMY

Mother earth is a best example of circular economy.  In nature, there is no waste, because the nature recycles all in its ecosystem. Waste is an inevitable by-product of human activity, and it has been associated with the concept of disposal.  However, this is changing in recent years.  Waste is seen as a resource with growing awareness of waste caused risks to the environment and human health, and depletion of limited natural resources.  Intensive attention is being given to the environmental, social, and governance, ESG pillars of sustainability. For example, all the listed companies on Singapore stock exchange are required to report on their ESG progress.  Nations as well as industries pledging zero carbon emissions by 2050 could learn from the circularity of various systems of nature.  More than half of carbon emissions come from resources extraction and processing, and subsequent waste management.  In other words, the zero carbon emission pledges and circular economy vision are symbiotic.  A conscious shift towards circular economy dramatically reduces waste and pollution, and also transforms our toxic relationship with the ever-depleting natural resources into one of renewal.

Digital technologies as well as green technological progress are crucial in opening up newer opportunities for businesses and individuals alike.  BigTech is now fostering FinTech to capitalize on market opportunities in the zero carbon and circular economy ambit, and also to respond and adapt to new frameworks, regulations and standards of sustainability.

An example of interplay between FinTech and circular economy is the impending plans of European Commission to introduce a “digital product passport” early next year that would contain information about the composition of goods on the European market to help boost their chances of being reused and recycled.  FinTech can enable circular economy by enhancing financial/transaction data with product information such as material composition, emissions along supply chain, instructions for disassembly/recycling, product profile/pics for resale/share economy. Adviser for circular economy at the European Commission, William Neale said that ‘we really need to make sure that the products that are put on our markets are designed to be durable, repairable, and so on’.  Furthermore, the FinTech innovations will facilitate data disclosures, risk assessments, finance and investor-matching, and insurance.  They in turn accelerate a system-wide transition towards circular economy and carbon neutrality.  Recently, about 500 global financial institutions representing USD130 trillion in assets pledged to a net-zero emissions by 2050 thus embarking on their sustainability journey.  Verifiable data, ESG ratings, and global standards facilitated by FinTech will avoid the pit falls of greenwashing and greenflation.  Open data is a necessary means to promote trust, investments, and innovations. Data is the lifeblood of the digital future and circular economy.  Robust and quality data improves the decision-making and operational efficiencies while detecting and preventing fraud, scams and unethical behaviors.  BigTech thrives on data management, and the need for storing data is growing exponentially.  For example, an average internet user needs 1.5GB data storage, a smart hospital requires 3,000GB, autonomous driving takes up 4,000 GB, a flying plane generates 40,000 GB, and smart factory requires 1M GB. Digitalization of sustainability also involves cashless transactions, digital currencies, banks, and insurers, and multitude of digital assets.  Data Centers are the hearts of BigTech, and running them requires energy. Data centers accounted for seven per cent of total electricity consumption in Singapore in 2020.  And Singapore committed to halving carbon emissions by 2050.  In other words, Singapore is balancing sustainability and economic needs and growth. BigTech heavyweight, Meta and the Singapore government recently invested twenty-three million dollars to design a world-class sustainable tropical data center testbed and cite at the National University of Singapore.

Renewed engineering innovations are also critical for sustainability. In recent years, digitalization and industry 4.0 technologies are engendering engineering innovations.  Hence, going digital is more than a matter of embracing the trends for GreenTech solutions to deliver on carbon neutral, circular economy.  GreenTech innovations are economy-wide involving diverse sectors such as food and nutrition, energy, water, manufacturing, buildings and infrastructure, transportation, and lifestyle products and services. Shipping, the backbone of the world economy, is undergoing a digital transformation thus saving on carbon emissions and improving on circularity.  Technology innovations facilitate unique identification, tracing and tracking to ensure food security, nutrition, and circularity.  Furthermore, they enable mobilization of alternative finance and social finance such as equity crowd funding, philanthropy, and donations in building a socially and economically resilient society.  In other words, an effective, impactful and sustainable alternative and social finances.   

With the rapid growth of FinTech, BigTech and GreenTech, gig economy is poised to grow.  In addition to their domain expertise, freelancers also often offer perspectives from diverse markets and cultures. Hence, companies are engaging them for an edge and cost savings.  According to the Ministry of Manpower, the number of freelancers in Singapore in 2019 is 211,000, which translates to 10 per cent of all employed residents.  The world of work is rapidly evolving and the need for reskilling and upskilling particularly pronounced.  Creating digital and sustainable future-ready talent is often a complex challenge, requiring a holistic value chain of ecosystem actors.  Hence, social innovations in addition to the engineering innovations are necessary to generate economic development while advancing environmental and social well-being. All of them to contribute to realize the seventeen UN sustainable development goals, which are aimed at the welfare of humans and more importantly vulnerable groups such as minorities, children, seniors, and women.

In celebration of World Engineering Day for Sustainable Development on 17 February, the Institution of Engineers Singapore is hosting prestigious Charles Rudd Distinguished Public Lecture series themed circular and digital economy.  Her Excellency Ms Iwona Piorko, Ambassador of European Union, Professor Cheong Koon Hean, Chairman of Center for Liveable Cities, Ministry of National Development, Ms Sheila Remes, Vice-Present of Environmental Sustainability, the Boeing Company, Ms Susanna Kass, Data Center Advisor to the UNSDG, and Dr Darian McBain, Chief Sustainability Officer, Monetary Authority of Singapore will delve into digitalization as an enabler to circular economy hence boosting the full potential of circular businesses and industries for a sustainable and resilient future.  Insights into the future of sustainable flight, green data centers, financing the green revolution, integrated action towards climate compatible development, reimagined jobs in the digital and circular economy, reskilling workforce for circular economy, and getting serious about sustainability topics are directly relevant to Singaporeans.  Deliberations to be aimed at future Singapore - a global city state in harmony with nature. 

BigTech as well as FinTech have grown by leaps and bounds since their early years. Sustainability journey is filled with promises, yet fraught with unpredictability.  Climate effects are indiscriminate, and the underprivileged groups suffer the most.  BigTech, FinTech and GreenTech to ensure that these groups are not only protected from the climate effects but can also be uplifted towards a more equitable future. FinTech and GreenTech provide opportunities for new entrants, and their creativity enables them to compete with the incumbent established players and long-entrenched privileges. Furthermore, they disrupt socio-economic stratification.  

Sustainable, climate resilient, and healthy planet is taking center stage of daily life and world economy.  Serendipitously, this may herald the largest opportunity of our time to reset the societies and economies.


Find out more about the IES Charles Rudd Distinguished Public Lectures.

Comments

Go to the profile of Wayne Hu
4 months ago

I'm recently focusing on the digital technologies in re-manufacturing which contribute to the Zero Carbon Emission.   Look forward to more ideas at industries!