Nowadays, who respects a company that tramples on workers’ rights and human rights or harms the environment? Companies are now responsible not only for their product but also for creating economic, environmental and social value over the short and long term. In other words, companies have to be sustainable and contribute to the progress of present and future generations.

Far from being a burden, sustainability is a business opportunity, allowing companies to ensure their continuity and positioning and making them more efficient and profitable. Despite the widespread perception, applying sustainable management is much less costly and complex than it was a few years ago.  Technology and innovation are the key.

In the financial sector, the Paraguayan bank Sudameris has been able to adapt the information provided by technological innovation to its business. The financial institution uses the online platform of Global Forest Watch, which offers real-time data to determine whether a fire is threatening one of its investments or if  a lumber client is trading in species from protected areas, information that is highly valuable for its risks management plans.

The new digital technologies’ impact on the economy is clear: over the last three decades every $1 invested in this type of technology added an average of $20 to the gross domestic product (GDP), or 6.7 times more than the investment in non-digital products. However, what is already known as the fourth industrial revolution is still not being utilized to its fullest potential. There is the perception that monitoring sustainability indicators is very costly and complex and requires large investments.

In the agricultural sector, new technologies make possible a more efficient management of areas under cultivation thanks to access to more on-site data regarding crops. In Argentina, for example, there is a platform called La Rotonda that links rural producers and contractors in what some have called an “uberization of the countryside.” This initiative allows a producer to offer or seek agricultural services on a direct and georeferenced basis and to save on middlemen in hiring for each agricultural season.

In addition, sustainable infrastructure can benefit significantly from digital innovation. In transportation, as part of a new collaboration between IDB Invest and Waze, we are working with our client Autopistas Urbanas (AUSA) in Argentina to give it real-time data on accidents and traffic statistics, so as to better understand the impact on road safety.

In many countries, it is the consumers themselves who are promoting the digitization of products and services with an until now unknown demand for transparency in production processes. Citizens want to know what type of product is reaching their tables, which presents challenges for companies in the management of supply chains.

Having access to better sustainability practices in banking, agriculture and infrastructure are precisely three of the aspects that have demanded the most of IDB Invest’s clients. For this reason, these themes were given priority in the design of the Sustainability Week held in Lima between May 7 and May 11.

Latin America and the Caribbean have an enormous responsibility due to their important role as suppliers of raw materials for the world market and each day this requires more sustainability-based policies and actions. The great challenge lies in ensuring that the companies in this region of the world increase the value of their products at the same time as they minimize the impact of their production.

This blog was originally published in El Comercio