52% of organizations are using emissions data for business decision-making beyond mandatory compliance: Mukesh Jain, CTO, Capgemini India
Emissions data must be used to its full potential to help organizations stay on track to achieve their net zero targets. However, Capgemini Research Institute’s recent report, Data for Net Zero: Why data is key to bridging the gap between net zero ambition and action, finds that while a vast majority of organizations recognize the value of emissions data (85%), half of the organizations surveyed say that their business teams are not equipped well enough to use this data to drive decision making. To understand how embedding emissions data in decision-making processes can help organizations achieve a reduction in emissions per year, Express Computer spoke with Mukesh Jain, CTO and Head of Innovation and Strategic Assets, Insights & Data Global Business Line, Capgemini, who shares with us how developing robust data management and collaboration capabilities can make data a significant lever in accelerating the efforts towards net zero
Some edited excerpts from the interview:
Capgemini Research Institute recently released a report, ‘Data for Net Zero: Why data is key to bridging the gap between net-zero ambition and action. Can you brief us on some of the key notable highlights of the report and its relevance for India?
Global greenhouse gas (GHG) emissions must be halved by 2030 and lowered to net zero by 2050 to avoid the negative impact of climate change. Net zero pledges in 2019 covered 16% of the global economy and by 2021, this has risen to 68%.
Against the given backdrop the research, ‘Data for Net Zero: Why data is key to bridging the gap between net-zero ambition and action’ is aimed to explore the role of data in converting net zero ambitions into action. Data is crucial to ensure that organizations are aligned with rapidly evolving regulations around climate disclosure. Data also provides organizations with the means to accelerate their journey to net zero by catalyzing organization-wide action on emissions reduction.
According to our report, 92% of organizations said they plan to achieve net zero targets by 2040. The impact of emissions has to be considered a critical factor in decision-making across procurement, product development, manufacturing, logistics, IT, and other areas across an organization’s value chain. It is key in transforming emissions data and insights into actions across an organisation’s processes and how they work to help take concrete steps toward reducing emissions. Emissions data can help decision-making in three keyways i.e., increasing visibility of baseline emissions levels and identifying emissions hotspots; improving existing business processes by streamlining carbon-intensive activities and predicting and prescribing business outcomes to identify further emissions reduction opportunities. As per 84% of organizations emissions data measurement, analytics and reporting can help create additional business value for organizations.
However, organizations are not adequately embedding emissions data in decision-making, and according to the research
• 45% of organizations use data only for mandatory reporting.
• While 55% say they embed it in decision-making in some form, we found that they largely use emissions data to measure sustainability performance, and few use it to improve existing processes or to predict and prescribe opportunities for emissions reduction using forecasting and scenario analysis techniques.
• In India, 52% of organizations are using emissions data for business decision-making beyond mandatory compliance and reporting.
• According to 36% of organizations in India, emissions data is used to drive improvements in logistics and supply chains.
• Emissions data plays a key role in business decision-making within various functions like IT and Risk/finance and CSR according to 52% of organizations. Operations and manufacturing according to 44% of the companies surveyed.
The report finds that while a vast majority of organizations recognize the value of emissions data (85%), half of the organizations surveyed say that their business teams are not equipped well enough to use this data to drive decision-making. What can be done to address this issue?
Most organizations use emissions data primarily to measure sustainability performance, fewer organizations are using emissions data to drive improvements in existing processes, and an even fewer use it to forecast and propose new business outcomes. Organizations are not sufficiently embedding emissions data in decision-making and most use data only for mandatory reporting. Many organizations are not well-positioned to use emissions data as they are not measuring emissions adequately, lack confidence in the accuracy of the data they collect, and have business teams that are not equipped to use emissions data for decision-making. In India data collection challenges according to 56% of organizations include the lack of data on carbon emissions across the product’s life cycle (i.e., from raw material extraction to end of life) and 54% say it’s the lack of data completeness and reliability and 48 % of organizations are not automating the collection of emissions data at scale.
Globally 71% of organizations measure “scope 1” emissions and 56% measure “scope 2” emissions on average while “scope 3” emissions are largely unmeasured which is a significant concern as it accounts for 65-95% of the company’s carbon footprint. Emissions data offers abundant opportunities to augment decision-making across business functions. Organizations need to ensure that data on emissions supports business decisions across functions such as procurement, product development, manufacturing, logistics and supply chain, sales and marketing, risk/finance, and steer an organization towards net zero.
At Capgemini, our approach is to support organizations at any point of their environmental data journey. We help clients make the most of data to accelerate and secure their sustainability transformation through three components namely, data for net zero, sustainability data hub and ESG (Environmental, Social, and Governance) data performance.
Your advice to Indian organizations on the initiatives they need to take to reach net zero?
Organizations in India and across the globe need to develop data management capabilities to accelerate their transition towards net zero organization. Organizations must develop a data strategy and roadmap to support net-zero goals which should include
• Strong leadership support, backed by a clear governance structure and data strategy. Net zero initiatives, have to be supported by top management and organizations should set up a governing body to navigate and oversee progress.
• A robust data management foundation to address challenges such as the lack of complete and reliable data, high cost of data acquisition, and inability to measure emissions. Organizations must develop data platform capabilities to automate the assimilation, storage, and processing of emissions data, build emissions data analytics and visualization capabilities to activate emissions data, invest in a carbon management solution for carbon accounting and reporting, and extend data governance capabilities to emissions data management.
• Drive usage of emissions data across business functions by ensuring that business teams are equipped to use emissions data in business decisions. Organizations have to set up an internal carbon pricing system and invest in upskilling initiatives across the organizational hierarchy.
• Establish mechanisms to ensure accountability for decarbonization across the organization by defining clear emissions targets and carbon KPIs for business teams.
• Collaborate with the wider ecosystem to expand access to reliable emissions data especially “scope 3” data which is outside the boundaries of an organization and help vendors measure emissions by equipping them with carbon accounting tools, training, and support, and participating in data ecosystem initiatives to share emissions data.
How do you see the role of technology in helping organizations be closer to their goal of net zero?
Data & AI can be leveraged to achieve net zero intelligence, which will boost sustainability performance. After evaluating the current state, organisations can define their strategy, translate carbon assessment into tangible insights, and monitor and report at scale through industrialized measurement powered by Data & AI platforms. At Capgemini we help companies orchestrate simulations and advanced analytics to provide centralized real-time insights to help form action plans, shaping net zero ambitions into a universal, sustainable future. Organizations can nurture data to deliver unique insights and build net zero intelligence, driving transparency and accountability for their ESG commitments. They can enhance performance in market optimization, value generation, driving competitive advantage, and increasing brand reputation.
We at Capgemini have built Sustainability Insights and Data Hub powered by 890 by Capgemini, a platform which delivers end to end sustainability for clients. 890 by Capgemini is plug and play, available on any cloud, enabling users of data-powered organizations to make collaborative business decisions, faster and more intuitively, all from one single trusted interface. This platform helps organizations drive their sustainability goals by monitoring, modelling, and tracking policy changes in the sector. This leads to identifying alternative means of accelerating adoption of affordable, reliable and sustainable energy systems.
To build visibility into scope 3 data, organizations can set up data platforms to simplify the process of data collection from value chain partners. Web3.0 technologies such as blockchain can play a key role in enabling transparency and traceability in complex supply chains.
The measurement of emissions data is a significant lever in emissions reduction. Together with more advanced uses of data, the impact of data-powered decision-making is likely to be far more significant. Our previous research “Climate AI: How artificial intelligence can power your climate action strategy,” found that AI had helped organizations reduce emissions by 12.9% in the two years to 2019 (a reduction of approximately 6.5% per year).
However, organizations need to be mindful of the climate impact of AI and design efficient and sustainable AI applications. In addition, systems for emissions data measurement, storage, and processing should be designed to generate a minimal carbon impact themselves. In India, 52% of organizations are using emissions data to drive improvements in IT business processes, and 84% of organizations believe emissions data measurement, analytics, and reporting help create additional business value for them.