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Realizing net zero

ARTICLE | June 27, 2023

Realizing net zero

Companies that want to achieve net zero must double-down on digital transformation

By Elisha Harrington, Workflow contributor

Many businesses have the best of intentions when it comes to climate change. More than a third of the largest global companies have committed to net zero carbon emissions by 2050, according to a report from Accenture and the World Economic Forum.

Yet two-thirds of those companies don't have a plan in place to reach their climate goals, according to research from British firm Net Zero Tracker.

Worse yet, nearly all the companies that committed to net zero will fail to achieve their goals if they don't double the pace of their emissions reduction by the year 2030, according to the Accenture/World Economic Forum report.

But, there are two pieces of good news.

First, many companies have the tools they need to accelerate decarbonization and other environmental, social, and governance (ESG) initiatives.

Second, about half of organizations are already adapting their business models to reduce carbon emissions, conserve natural resources, and minimize waste, according to a recent survey from ThoughtLab and ServiceNow, which polled global executives on their ESG progress.

According to these findings, companies should use digital systems and processes to track, measure, and reduce carbon emissions. Only then can they bridge the gap between real emission reductions and good intentions.

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One of the primary reasons organizations struggle to reduce their carbon emissions is because they don’t know how much carbon they’re emitting. To get a handle on it, businesses need clear and accurate data to determine their carbon footprint and to come up with a method for measuring progress in reducing it.

This data, however, is often locked away in siloed systems or archaic manual processes. For example, one part of an organization might track how much carbon is emitted by its AI-related technologies while another might focus on quantifying its factory and manufacturing emissions. If these data points are not synthesized, decision-makers won't be able to incorporate them into future plans.

Digital tools can help with this problem. If used correctly, digital technologies could help companies reduce their carbon emissions by 20% over the next few decades, according to an EY report. ThoughtLab/ServiceNow data align with these estimates: a third of business executives reported their plans to use digital tools to track and support progress on sustainability, conduct comprehensive assessments of their carbon footprints, and create data-driven roadmaps for achieving their ESG goals.

Digital technologies could help companies reduce their carbon emissions by 20% over the next few decades

By digitizing internal processes, companies can continuously monitor their direct emissions—for example, measuring how much fuel their vehicles consume as they transport products (so-called scope 1 emissions). Similarly, companies can track emissions from vendors and suppliers via digital assessments and audits (scope 2 emissions). Companies can further assess and audit scope 3 emissions from third, fourth, fifth, and even more removed parties to provide a more holistic upstream and downstream map of emissions, which comprises the impact of all goods and services purchased along the value chain, including areas of waste or inefficiency.

Capturing scope 1 and scope 2 emissions aren’t simply a matter of good corporate citizenship. Last year, the U.S. Securities and Exchange Commission submitted a proposal that, if approved, would require organizations to disclose greenhouse gas emissions and other climate-related risks that might have a material impact on their businesses as part of their corporate registration statements and periodic SEC reports. This year, the European Union passed a number of climate regulations that require companies to purchase a permit for every ton of CO2 they emit and that aim to penalize businesses that don’t measurably decrease their carbon emissions.

Organizations can leverage digital tools to cut down on emissions and make it more likely they will realize net-zero by 2050. In particular, digital tracking technologies could help companies realize 20% of needed reductions if they are scaled across industries, according to the Accenture/World Economic Forum report.

To stay on track, businesses need to map strategic goals to concrete metrics. That means companies must ensure their data is continuously gathered, shared, and synthesized across the organization, according to the same report. Proper data management, privacy, and governance are vital for realizing all ESG goals, including reducing carbon emissions, according to a report by PwC.

Fortunately, the majority of organizations are taking steps to confront sustainability issues, according to ThoughtLab/ServiceNow survey data. While climate change poses a major existential threat, technology and community have already helped corporations cut down on their emissions and will continue to play a role in fighting for a greener future.

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Author

Prior to ServiceNow, I worked for PwC and was responsible for key strategic technology solutions for ASEANZ working directly with PwC leadership and a portfolio of ventures including a strategic partnership with CSIRO. I worked with the Queensland Government focused on innovation that addressed water quality monitoring, coral reef health monitoring for the Great Barrier Reef. I was responsible for a range of software solutions covering analytics and blockchain as well as engagements such as sustainable food systems, sustainable cities and energy efficiency.

Articles by Elisha Harrington