How Iot Is Revolutionizing The Twin Transition: A Game-Changer For Environmental Sustainability

The digital age has ushered in a profound societal shift, redefining the foundations upon which modern life is based and pushing us towards a visionary societal model called "Society 5.0" (Carayannis et al., 2023). This model, conceived in Japan, represents a vision of an advanced society in which digital technologies are harmoniously integrated to meet social and environmental needs, creating an inclusive and sustainable environment (Deguchi et al., 2020). Among the key technologies driving this change are technologies such as artificial intelligence (AI), big data, robotics, augmented reality, and virtual reality. These technologies leverage an enabling technology such as IoT not only for its direct applications but, more importantly, for its ability to collect data in a way that enhances sophisticated analytical and predictive capabilities (Lee et al., 2015). In fact, IoT, which plays a central role in this study, is considered a network of connected smart devices that collects and transmits real-time data, supporting resource optimization and continuous process monitoring (Ahmad et al., 2021). Given its characteristics, IoT represents also a key tool for addressing global sustainability challenges. Indeed, as stated by Nižetić et al. (2020), IoT facilitates a continuous and dynamic interaction between the physical world and digital environments, enabling innovative solutions to promote environmental sustainability. Tracing the steps that have led to this Society 5.0, it is evident that the input came from digital transformation, a process that has been evolving since the early 2000s, marked by the widespread adoption of digital technologies and their integration into every aspect of business operations (Hanelt et al., 2021). This transformation has become a pillar of contemporary organizational strategy, fundamentally altering the way companies operate and compete in the modern economy (Nadkarni et al., 2021). The term digital transformation refers to the adoption and integration of digital technologies across all aspects of an organization, enhancing efficiency and promoting innovation, resulting in increased value creation (Vial, 2021). However, digital transformation also implies a profound change in business processes, business models, and organizational culture. Consequently, adopting a digital approach requires flexibility, as companies must be ready to continuously review their processes, adapt their operational strategies, and promote a culture of continuous innovation (Warner et al., 2019). This flexibility also contributes to the development of new revenue streams, the improvement of operational resilience, and the rapid adaptation to market changes, fostering greater agility and proactive responses to emerging challenges (Li et al., 2021). Leadership plays a crucial role in this process, as it must drive change, encourage experimentation, and support a long-term vision for digital adoption (Westerman, 2014; Hanelt et al., 2017). Indeed, without a cultural hange, digital technologies risk being underutilized and failing to reach their full transformative potential (Westerman, 2014). To illustrate some changes that are recently taking place within companies thanks to digital transformation, we can observe that AI is providing predictive analysis tools that enable companies to make data-driven decisions more quickly and accurately (Bohnsack et al., 2022). Blockchain, with its security and transparency features, is revolutionizing supply chain management and increasing trust in transactional processes, while 5G is bringing advanced connectivity that allows for more sophisticated real-time industrial and IoT applications (Reuter, 2021). Thus, the challenge lies in strategically integrating these technologies to create a more efficient operational environment capable of enhancing customer interaction and product quality (Porter et al., 2015). Furthermore, digital transformation fosters cross-sector collaboration and dynamic skills management, enabling organizations to better adapt and innovate. This phenomenon allows companies to adapt more efficiently to new market demands and foster an innovative environment (Wibowo, 2023). Indeed, digital platforms enable unprecedented knowledge and resource sharing, enhancing open innovation and co-creation with external partners (Trabucchi et al., 2023). Several companies are developing digital ecosystems involving startups, suppliers, and customers to accelerate the development of new technological solutions and address common challenges such as environmental sustainability and energy efficiency (European Commission, 2022). This collaborative approach is essential for remaining competitive in an increasingly complex and rapidly evolving global context. After carefully analyzing how digital transformation reshapes business processes and strategic objectives, it is important to comprehend how these changes fit into a broader sustainability framework, in line with the United Nations Sustainable Development Goals (SDGs). Specifically, the SDGs are a set of 17 global goals adopted by the United Nations in 2015, designed to address major global challenges, including poverty, inequality, climate change, peace, and justice. These goals provide a common framework for promoting a sustainable future for all, encouraging countries, organizations, and individuals to contribute to social, economic, and environmental progress. In this regard, when discussing sustainability, it is important to specify that it involves the interaction of three fundamental dimensions: environmental, economic, and social sustainability (UN 2015). Environmental sustainability emphasizes the responsible management of natural resources to ensure their availability for future generations while minimizing negative impacts such as pollution and biodiversity loss (Cabezas et al., 2003). Economic sustainability aims to ensure long-term economic growth without negatively affecting environmental or social aspects (Foy, 1990). Social sustainability, meanwhile, focuses on improving the quality of life for individuals and communities, ensuring equitable resource distribution, and promoting social inclusion (Geissdoerfer, 2017). This thesis focuses particularly on environmental sustainability, emphasizing the responsible management of natural resources to minimize environmental impacts such as pollution, resource depletion, and biodiversity loss (Gallo et al., 2020). As pressures on environmental sustainability increase, companies are increasingly required to adopt practices such as decarbonization, waste reduction, and lean production methods to ensure resilience and adaptability to the challenges of climate change (Beier et al., 2022; Muench et al., 2022). According to the review of Gissi et al., (2021), the average global temperature has increased by approximately 1.1°C since the late 19th century, and greenhouse gas emissions have reached record levels, contributing to the intensification of extreme weather events such as heatwaves, floods, and wildfires (Legg - IPCC, 2021). These climatic disruptions pose significant risks to both ecosystems and economic stability, underlining the urgent need for sustainable practices and technology has the potential to significantly advance sustainability efforts (Minz et al., 2024). Consequently, it is evident that a comprehensive, integrated approach is essential to drive systemic change effectively. This approach is encapsulated by the concept of the twin transition which refers to the concurrent digital and green transformations that are increasingly recognized as a strategic necessity to promote a sustainable and resilient economy. This transition emphasizes the synergy between digital transformation and environmental sustainability, demonstrating that the adoption of digital technologies can effectively promote and accelerate sustainable practices (European Commission, 2022). To move towards the twin transition, leader must balance economic objectives with environmental and social needs by creating integrated strategies (Chen et al., 2023). The twin transition offers industries the chance to improve operational efficiency while reducing their environmental footprint (Costa, 2024). Beyond efficiency gains, it also fosters innovation in business models, such as transitioning from linear to circular economies, where sustainability is central to value creation (Asgari et al., 2021). Effective leadership is key in guiding this transition, cultivating a strategic vision that seamlessly integrates digital and environmental objectives (Mehmood, 2024). Aligning digital and green goals helps organizations meet regulatory standards and achieve a sustainable competitive edge, linking profitability with environmental responsibility (Mäkitie et al., 2023). In fact, adopting digital innovations and sustainable practices allows companies to be better equipped to cope with external shocks, such as those caused by climate change or economic crises (Khurana et al., 2022). At the technological level, IoT, AI, Blockchain, big data, cloud computing, and digital twin are identified among the main components of twin transition and can be leveraged not only to reduce carbon emissions but also to promote more sustainable use of energy resources, thereby improving overall efficiency and environmental impact (Appio et al., 2024). Specifically, IoT was chosen as the focus of this research due to its distinct capability to enable advanced technologies like Big Data and Artificial Intelligence through its real-time data collection and transmission (Plageras et al., 2018). This detection capability makes IoT an essential technology in key sectors for sustainability, such as those related to natural resource management, transport optimization, and carbon emission reduction (Bibri et al., 2024). Indeed, the continuous data stream from IoT devices enables the development of sophisticated analytical and predictive systems, thereby enhancing the effectiveness of digital solutions aimed at promoting environmental sustainability (Ghobakhloo et al., 2022). Although academia extensively explores the potential of digital technologies and their broader applications, it has paid less attention to the specific intersection between these technologies and environmental sustainability. The field tends to analyze the two dimensions—digital innovation and sustainability—more as separate phenomena rather than focusing on their growing integration and synergies (Costa, 2024). This represents a gap in the literature, as a deeper understanding of how digital technologies, such as IoT, can be leveraged to address environmental challenges is essential. It is precisely in this work of analyzing the relationship between IoT and environmental sustainability that several gaps have emerged, which have slowed the full understanding and application of this technology in promoting sustainable practices (Mois et al., 2017). One of the primary challenges lies in identifying the most impactful IoT applications for achieving specific environmental objectives (Alalwan et al., 2024). For instance, while patented technologies for traffic management and energy control have demonstrated a significant contribution to urban sustainability, it remains to be explored how these can be adapted to meet the needs of diverse industrial sectors and specific regional contexts (Gopi et al., 2021). Furthermore, in the context of the manufacturing industry, this challenge is exacerbated by the difficulty in rigorously measuring the impact of IoT technologies on operational efficiency and emission reduction (Acquaye et al., 2017). The lack of standardized metrics and assessment tools that can quantify the ecological benefits of IoT complicates the justification of investments and limits the large-scale adoption of such solutions (Brous et al., 2020). This study aims to address these gaps by exploring the following research questions: the role of digital technologies in achieving environmental sustainability, the most effective applications of these technologies for addressing environmental challenges, and the future innovation trajectories that can contribute to environmental sustainability. The objective is to investigate these questions through a progressive analysis, starting with an examination of corporate perceptions, followed by a review of academic literature, and culminating in a mapping of emerging technological innovations.