The report, released by think-tank Forum for the Future, is the product of the year-long Digital Futures inquiry into the effects of e-commerce on society and the environment. The inquiry was launched in February 2000 by e-commerce minister Patricia Hewitt in a bid to understand the social and environmental issues thrown up by businesses using the Internet.
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Findings from a survey of 150 IT and dotcom companies showed that, although 65% said social and environmental issues were important to their companies, 79% did nothing to measure or manage their environmental impact and 83% offered no training on environmental or social issues.
The report - Digital Futures: Living in a Dotcom World - issued a series of recommendations for both the Government and business to promote a sustainable digital economy.
The report urges the Government to invest a share of new economy windfalls, such as revenues from the 3G wireless licence auction, into a fund for Internet-enabled projects to further social cohesion and to put money into the creation of an "ecobot" - a search engine for finding goods and services based on their environmental or ethical performance.
Business has a central role to play and must link closely with government to drive sustainability into every area of the new economy, says the report. Companies should share storage and distribution facilities to reduce demand for warehouse space and should cut back on unnecessary van deliveries.
Speaking at the launch, Hewitt said the findings in the report would be invaluable for formulating government policy, particularly on environmental issues.
"Sustainable development and e-commerce should go hand in hand. E-commerce has the potential to bring great environmental and social benefits alongside the economic benefits it has already begun to deliver. But if we are to achieve those benefits we need a smarter policy framework," she said.
Environment minister Michael Meacher said, "It came as a real disappointment that 79% of companies did nothing to measure or manage their environmental impacts. Businesses selling goods to consumers via the Internet should think about the distribution systems they use and specify these in a way that will minimise their environmental impact."
Chris Earnshaw, chief technology officer at BT, said, "It is a widely-held myth that IT is benign to the environment but that is just not true. It is actually a significant contributor - both directly and indirectly - to environmental [pollution]. You have to connect technology, productivity and social policy in a way that produces a long-term trend that the world can live with," he said.
Wholesale process changes as a result of the digital revolution are having a big impact on society and it was important to understand that, said James Wilsdon, senior policy adviser at Forum for the Future.
"The main thing is not to assume that because you are working in cyberspace, it does not have an impact on the natural world. It is about getting a company to think about the whole life-cycle of a product and what impact that product is having on the environment," he said.
Wilsdon said changes to the business process would be relatively painless because UK plc was at a relatively early stage in the e-economy. "It does not have to cost a lot. We can build [environmental and social responsibility] into changes that are already being implemented. We just need to make sure that when a company is spending money, this level of change is on the agenda," he said.
According to Helen Osman, from the e-commerce strategy unit at the Department of Trade & Industry, the key challenge was to encourage companies to transform the way they operated. "We are not just talking about the front-end; it is at the back-end stage, taking the environment into account when you are re-engineering your business processes," she said.
Colin Jenkins, e-business adviser to the Greater London Authority, said the necessary changes would take some time but that it would promote greater efficiency within business.
"It is all about value-chain compression. Re-engineering your processes to provide the system in an energy-efficient way means you are making the business more efficient through the management of raw materials," said Jenkins.