Sustainable business through the responsible use of data
Ongoing crises such as climate change and the loss of biodiversity have brought environmental issues to the fore of corporate responsibility, and with good reason. The global pandemic also creates unprecedented pressure on the economy and plays a part in the way companies operate. At a time when we are looking to the digital transformation as a solution to many of these challenges, there is surprisingly little talk about the responsible use of data.
Until now, the debate around social responsibility has barely touched on data – the by-product and raw material of digitalisation – or how it is processed and refined into information. However, the use of data has an immense impact on society, organisations and the environment. For example, there has been little analysis of the environmental footprint of digitalisation, despite an estimate by the European Commission that the ICT sector accounts for between 5% and 9% of the world’s electricity consumption and more than 2% of all emissions. The use of data in organisations should be viewed from both an environmental and social standpoint.
New demands for corporate responsibility – data ethics as part of governance
While environmental awareness challenges businesses to continuously improve, it is safe to assume that the same will also happen in terms of consumers’ data awareness. Consumers are becoming increasingly conscious of the use of their personal data and are now demanding better privacy protection and transparency from businesses that exploit their data. Companies must be able to prove to authorities and individuals that their use of collected data is sustainable. With the advent of the European General Data Protection Regulation, the emphasis in corporate responsibility has shifted from mere compliance to also include accountability.
Although there has been research into information and communications technology from an ethical perspective, the field is still in its infancy and data ethics is a relatively new concept. Still, organisations would do well to pause and reflect upon their actions from time to time, both in terms of compliance with legal requirements and from an ethical standpoint. How well does a company adhere to its principles, and what kind of relationship does it have with its community?
In the research collaboration between the Sitra IHAN project and the University of Turku, issues of data ethics are applied in an insightful way in the work of the IHAN project rulebook working group.
The working group has discussed the ethical framework of data networks from three viewpoints focusing on the intent, consequences and the development of the nature of the network or its members. The viewpoints are also useful when studying the motives of various types of actors in broader contexts.
- From a deontological perspective, an action is not ethical if it is not intended to do good to others. In the context of data networks, members have a duty to act in an ethically sustainable way towards one another. Each member has intrinsic value, and the network strives for a common good.
- According to consequentialist ethics, which emphasise the end result, an act is unethical if it does not achieve good. Those in a data network must act in a way that achieves an end result that produces as much good as possible to all parties. The mere pursuit of self-interest cannot be regarded as an ethical motivation. Instead, members must seek an equal benefit for all involved parties.
- Virtue ethics focus on the virtuous nature of a person or organisation. And since being virtuous means doing things for the common good, an ethical organisation must develop in an increasingly virtuous way. How does the organisation respect the network’s members and how is its customers’ data processed? In an organisation that follows the principles of virtue ethics, rules and policies should help employees develop to become more virtuous. In other words, the organisation must provide its employees with the necessary means for self-development.
As a subset of human economic activity, the data economy is a newcomer, and its many impacts on society are only starting to become apparent. In developing and analysing the data economy, a useful approach would be one based on inclusion and discussion founded upon ethical analysis. In order to create a functioning framework for the data economy, the various parties involved must engage in a discussion on values. This discussion must be ongoing and must keep up with the times. Researchers such as Koskinen et al. (2019) recommend discourse ethics as the basis for the discussion over values. According to discourse ethics, freedom, equality and justice are prerequisites for all successful communication.
A responsible company listens to consumers’ demands for data security
In analysing the results of the qualitative citizen survey carried out by Sitra in 2018, researchers at the University of Turku identified six key themes related to values:
- the individual’s control over data and how it is processed
- transparency and communication
- security, trust and fairness
- compensation or benefit to the user
- oversight and rules
- negative attitude towards data collection and the data economy.
In defining a new, fair data economy, the values of individuals and their ability to act and protect their personal data must be taken into consideration. European citizens responding to the survey also appeared to value oversight and rules. The responses suggest that data responsibility should be more clearly a part of a company’s corporate responsibility and transparency of operations. Achieving this will require developing the processes for reporting and oversight.
With the EU General Data Protection Regulation (GDPR) Regulation (EU) 2016/679, the European Union’s ("EU") new General Data Protection Regulation ("GDPR"), regulates the processing by an individual, a company or an organisation of personal data relating to individuals in the EU. , issues related to data protection have emerged as part of the strategic planning of pioneering companies, and data has become a core element of companies’ production.
The Confederation of Finnish Industries (EK) identifies corporate responsibility as an important part of the business expertise (link in Finnish) of successful companies. A responsible company acts in a manner that is as sustainable as possible and reconciles the goals and expectations of the company and its stakeholders. According to EK, the best results are achieved when the company commits to strengthening its social responsibility as part of developing its own operations.
Each company is at a different stage of maturity in terms of how it uses data and handles data protection. It is important that organisations form an understanding of their current state of operations in order to highlight shortcomings. For the purposes of planning, it would be helpful to discuss the most appropriate methods and tools for implementing companies’ data governance and carrying out their legal obligations. At the same time, the role of data responsibility as part of the whole and its relationship with data ethics can be assessed. Useful tools for understanding and developing the use of data in business operations include a data strategy and corporate social responsibility reporting. Customer feedback should also be an integral part of developing data practices.
Development of these areas may be challenging, but all the more important for being so. The ways in which new digital solutions and the approaches related to them are designed will have far-reaching impacts on all of our lives.
In this series of articles, we highlight perspectives that our experts feel deserve further research and practical testing in order to bring humans to the fore of the prevailing data economy model.