Business has been honed and trained for decades to internalize profits and externalize costs to society. Unfortunately, this model is neither responsible nor sustainable.
Tech and business leaders can't just look at the next viable technology innovation and only consider what specific applications will help the company gain a competitive edge, become more efficient or maximize profit for inventors without thinking about potential negative consequences. Today's leaders must be thoughtful and honest about probable consequences -- both the good and bad effects that could potentially accrue to society. And they must take responsibility for both.
An increasing number of executives understand this.
Fifty-two percent of leaders view technology as an emerging sustainability and environmental, social and governance (ESG) risk, according to "C-suite Insights: Sustainability and ESG Trends Index," a 2023 report from EY.
The entire field of sustainability exists because innovations that solved problems for some created problems for others. For example, plastics and fossil fuel energy have contributed to modern life in certain ways but, on the other hand, are negatively affecting the environment and society.
Sustainable innovation asks that creators and leaders grapple with certain issues, such as the resource usage and effects of a new product or service on society and the planet, and decide whether those effects are reasonable and manageable.
Responsible innovation confronts the ethics, equity, justice and intentions of the innovation. The thought process focuses on asking hard -- and, for many, new -- questions about the development process, why innovation is needed and for whom, and whether the innovation should be pursued.
The moral frameworks of influential thinkers and philosophers could guide innovation, and organizational leaders should consider applying those types of frameworks. This requires an intentional mindset shift, where leaders invest in a culture of community and shared responsibility, play out scenarios fully, become honest with the answers and hold each other accountable.
5 questions about responsible innovation
Essentially, responsible innovation requires organizations to contemplate hard questions upfront. Here are five questions tech leaders should ask to steward intentional and responsible innovation.
1. What are we inventing?
Early-stage tech innovation always feels too small to mean anything. People are trying to see if they can create something someone else hasn't created before, and their use case is often a good one.
Almost all emerging technology inventions have a pioneering spirit and embrace the idea that technology is neutral and others are responsible for how they will use it. However, the perception that technology is neutral is a fallacy: Tech leaders can't create something and completely abdicate responsibility for the product's usage. Leaders must consider the ramifications of what they are trying to invent.
2. What are we trying to solve for?
Technology can quickly scale from a proof of concept to something with global reach, making innovation for innovation's sake problematic.
By the time regulators and other external stakeholders understand the innovation and its implications, it might be too late.
Tech leaders need to define what truly successful, responsible innovation should look like and contemplate how the organization is better off because something has been invented, scaled and industrialized -- or not. A business case is incomplete or inadequate if there's no thorough examination of the societal risks and benefits.
3. What good and bad outcomes are likely?
In the early stages of development, tech leaders should anticipate negative outcomes of the innovation and how -- and whether -- they can mitigate those outcomes.
Tech leaders shouldn't pretend that those types of issues don't exist, or that the user is responsible for how the product or technology is used instead of its designer.
Emerging tech needs to be thoughtful about considering not just "what this thing does" but also all the potential ways it could create good and all the ways it could create problems.
In fact, the concept of the precautionary principle, more commonly discussed in Europe than in North America, assumes that innovations will likely have downsides. The creator must demonstrate otherwise, instead of putting off the responsibility to assess and prove any damage.
4. Is the innovation likely to produce negative outcomes?
We know what unbridled innovation can lead to. It's incumbent upon leaders to bend the flashlight around the corner and think about potential negative aspects of the innovation, both at the present and in the future. This doesn't require a crystal ball, but it does require asking the right questions and being honest about all the potential issues that might be easier to ignore.
Tech leaders often talk about how sustainability cleans up the "unintended consequences" of past innovations, but that's a problematic approach. It's disingenuous to still call these consequences unintended. Perhaps the negative effects were unintended and unknown for a very short period, but all too often people have continued doing something even after understanding the consequences.
5. How can innovation affect employees, customers and the world?
Many companies report carbon emissions or waste implications, but very few ask how the product affects society. If a potential business will have negative effects on people and the environment, can leaders eliminate those aspects through product design and business processes?
Tech leaders in the consumer space can ask if the business or product will be accessible and available to all customers, or if the company is overlooking disenfranchised communities. Leaders can build technologies that broaden product access, thereby strengthening equity.
For the most part, leaders are not asking if society is better because the organization exists. Even more rarely do leaders ask themselves if society is worse because of what the organization does and how the organization does it. Very few companies really get to the core of what they do for a living and how that has affected society and disenfranchised communities.
Today's leaders should ask themselves: Are the benefits and risks distributed among society, or will marginalized groups -- in particular or solely -- bear the harm?
For companies whose products and tech cause damage to the environment and to society's well-being and health, would leaders have done things differently if they knew their business model's risks and negative implications? One responsible way to put something disruptive and scalable into the world is by creating an ecosystem where tech leaders, top engineers, civil society, regulators and consumer watchdog groups answer these types of questions. Every board of directors should have a responsible innovation committee or advisory council.
History shows that while organizations are proficient at innovation, companies aren't skilled at responsible innovation. Leaders need to ask themselves: What needs to change?
We don't need to have all the answers, but we need to ask better questions.
The views reflected in this article are the views of the authors and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
About the authors
Bruno Sarda is a sustainability and ESG executive, East Region leader and Energy Transition and Tech-Media-Telecom sector lead in climate change and sustainability at EY. He helps global companies develop and execute sustainability strategies and programs. Sarda is one of the most influential sustainability voices in America, a Top 50 environmental leader and a Top 100 global sustainability influencer.
Karima Zedan is an experienced communications, social impact and business executive, teacher and coach, focused on change initiatives that move the world toward an equitable, sustainable and just future. She is adept at building inclusive and effective teams in both the public and private sectors. Her career reflects her commitment to the notion that today's most complicated societal challenges require bridging differences and multisector collaboration.