BlogPetteri Kalaoja 29.01.2024

Is your customer data already sustainable?

The sustainability discussion’s focus on customer data revolves around data protection and how organisations transparently handle customer data and respect customers’ privacy. Our Martech strategist, Petteri Kalaoja, believes that responsible data processing is not only about fair and ethical choices but also about doing smart and sustainable business.

Europe leads the way in responsible data processing

Europe has taken an active role in the transition towards a data-driven society. The transition is firmly based on European values. Although the focus is on ethics, fairness, and the use of technology to benefit people and everyone’s fundamental right to privacy, many initiatives have emerged to promote new and responsible business opportunities, such as data sharing.

So far, the change is most visible in legislation. The EU has introduced several regulations requiring companies and organisations to handle data responsibly. The aim is, in particular, to protect the rights of individuals; we all have the right to know what data is collected about us, who uses this data and for what purpose.

Respect customers’ right to their data

Consumers are increasingly aware of their rights to their own customer data and companies’ obligation to use it fairly and transparently. And that awareness will only grow stronger within the next few years. As a result, companies that already take a responsible and transparent approach to customer data are in a strong position when consumers decide who they want to share their personal data with. This is when we weigh up which companies have built trust. Have customers been told what data is collected about them and how it is used, and have they been offered the opportunity to manage their data?

A concrete way to deal with this whole is consent management. It consists of managing cookies, preferences and privacy. The importance of data received directly from customers will be emphasised when third-party cookies are permanently sunsetted this year.

Environmental responsibility for data

The amount of data will grow exponentially in the coming years. Although data can be used to solve environmental and well-being challenges, growth is not only positive: large amounts of data are also an environmental burden, as data centers consume a lot of energy and natural resources.

It is estimated that by 2030, data centers will account for at least 8% of global energy consumption. Data centers are also cooled with large amounts of water, which poses challenges, especially in areas where access to water is increasingly difficult.

Organisations should strive to reduce the environmental impact of data storage and processing by optimising data management, processing and storage and choosing energy-efficient solutions for data use.

The positive paradox of regulation

Data protection regulations strongly guide what and how data can be used. Companies need to think carefully about how customer data is maintained. This leads to data minimisation and optimised data management, which reduces the amount of data processing. At the same time, savings are generated using environmentally harmful data centers. Mapping your data helps you identify what kind of data is hidden in your company’s caches and ensures that its use complies with data protection and data security.

Data protection regulation is, therefore, not a necessary evil and a curse. It brings benefits related to environmental responsibility but also new business opportunities.

Impacts of data responsibility on business

Responsible data processing also has concrete effects on business. Companies that handle data responsibly win customers’ trust – they get customers to share their data with the company, thus gaining a competitive advantage in the market. The risk of damage to public reputation and, consequently, potential loss of customers is also reduced.

When customer data is processed efficiently and managed centrally, companies know more precisely what data is used to make processes more efficient. Data can also be utilised to develop new energy-efficient and environmentally friendly products and services, thus creating new business opportunities. In the best-case scenario, it will also support consumers in making more environmentally friendly choices.

Sustainable customer data as a key part of data strategy

A good data strategy focuses on centralised data, data management processes and data processing in accordance with regulations. Responsibility in terms of the ethics of customer data processing and environmental impacts is becoming an increasingly important part of the data strategy.

This poses many challenges for those companies for which it is a significant change to their usual ways of working. But since change will inevitably come sooner or later, it is worth taking up the challenge it brings right away.

Sustainable data is a new imperative

Responsible data processing will be a necessity. It’s not just about making fair and ethical choices; it’s also about smart business. When we make more responsible, efficient use of data, we can build a more sustainable and prosperous future.

In Finland, the first companies have already incorporated customer data into their responsibility programmes; what is your company’s future?

If this topic resonates with you, don’t hesitate to contact me, and let’s talk more!

WRITTEN BY

Petteri Kalaoja

On longer leave

petteri.kalaoja@dagmar.fi

+358400996507

Petteri has been working with marketing technology for a long time and follows its development tirelessly. In his work, he strives to create a better and multi-channel customer experience. He is also inspired by the aspects of data protection and responsible customer data.