Tackling the climate crisis is the biggest challenge of our time, and here companies play an important role. As companies around the world undergo digital transformations, they have a unique opportunity to use this technology to integrate sustainability into their daily operations.
It is important that companies focus not only on decarbonising their own direct operations, but that of the entire supply chain. Quite a challenge, but luckily it’s much easier thanks to the use of technology. Digital transformation makes a lot of data available in companies, and it is used to streamline inefficient processes, which significantly reduces CO2 emissions throughout the chain.
“According to the United Nations Environment Programme, the resources needed to produce the food – which are then lost or wasted – have a carbon footprint of around 3.3 billion tonnes”
Processes are the foundation of everything a company does; from product design, production and distribution to fulfillment. All these processes can be organized more efficiently and smarter on the basis of data. Many processes are not efficient at all because they have developed piecemeal. An example is food production and waste worldwide. A third of all food produced is lost or wasted each year. No less than eighty percent of that waste is due to poorly executed processes.
Think supply chain inefficiencies, late deliveries and inaccurate planning. This inefficiency is not just about food waste. According to the UN Environment Programme, the resources needed to produce the food – which are then lost or wasted – have a carbon footprint of around 3.3 billion tonnes. So it would be a big step in the right direction if we can reduce this footprint by improving the processes.
Many organizational processes, such as CRM, ERP and spreadsheets that use real-time data, now run in the cloud. The problem? These fragmented systems often do not communicate with each other. This creates blind spots. Companies’ technological solutions allow them to analyze data and act on insights, but the gap between discovering an insight and acting is usually too large. It is therefore important that (automatic) actions are directly linked to the insight gained.
This is particularly important for sectors with large supply chains. In 2021, the World Economic Forum (WEF) released a report showing that eight global supply chains are responsible for more than half of all CO2 emissions, with food alone accounting for about a quarter. These supply chains need to be streamlined by making better use of available data. The first step is to look at the buying process. Using data, companies can detect corruption or forced labor in supply chains and encourage their suppliers to operate more sustainably. By expanding the use of data and including it in every decision made, companies can encourage their suppliers to work more sustainably. Data can also be shared with customers to create the necessary awareness for sustainable behavior.
“Technology makes it easy to give context to operational data”
Although sustainability is highly valued by companies, many still face a number of challenges. There is often a lack of transparency, performance and cost considerations, conflicting priorities and challenges in executing strategies. Fortunately, many of these challenges can be tackled well. Using technology, context is easily created for operational data, for example by providing concrete insight into the sustainability impact of a particular change in a process. This makes it easier to make choices based on real-time data rather than gut feeling that are sound at a strategic level.
Organizations can no longer ignore it: sustainability is an important item on everyone’s agenda. In order to get started with this structurally and effectively, companies can start by taking a number of concrete measures. For example, it is wise to start collecting data to create an initial baseline, to set goals and to align the departments involved, to provide insight into processes to understand which movements in a process affect CO2 emissions and implement automated actions that improve processes. In addition, the most important thing is of course to involve all stakeholders, both internal and external, and to work together on an ongoing basis.
(Author Janina Nakladal is ddirector of psustainability at Celonis.)