Technology leaders in profitable companies spend more time building complementary enterprise business capabilities, such as risk management and digital innovation, than those in less profitable companies.
As reducing carbon emissions becomes a top concern, technology leaders are adding emissions tracking practices to their list of business competencies, according to a new research brief from the MIT Center for Information Systems Research.
Many companies develop emissions reduction metrics based on the three categories outlined in the Greenhouse Gas Protocol. Scope 1 emissions are from sources that are owned or controlled by the company. Scope 2 emissions come from purchased electricity, heat, steam, and cooling. Scope 3 emissions are generated by a company's suppliers, partners, and customers and are the largest, most complex, and difficult to track.
As with any complex indicator, tracking emissions means relying heavily on digital technology combined with accurate data.Based on interviews with leaders and case studies from three global companies, researchers Ina M. Sebastian, Thomas Haskamp, and identifies three opportunities for technology leaders to build capacity to reduce their own emissions and those of their suppliers and customers.
1. Track and optimize your technology emissions.
The technology leaders who participated in the study focused on reducing the carbon footprint associated with IT. This includes making data centers more energy efficient and replacing older, inefficient equipment with options that have a lower carbon footprint.
For example, healthcare company Bupa, after pledging to become a net zero company by 2040, moved its systems to a cloud platform and aimed to work with suppliers with similar net zero goals. Bupa defined this key performance indicator internally and encouraged employees to use this information when selecting suppliers. By the end of 2023, 66% of IT spending was in line with the company's net-zero goal, and the 2024 goal was raised to his 75%.
2. Track and optimize product emissions.
Companies need transparency regarding emissions during product development and manufacturing, and technology leaders can play a key role in tracking this information and making data-driven decisions.
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Specialty chemicals company Clariant has embarked on two initiatives to reduce emissions from product development. One tracked monthly energy data from 80 manufacturing locations. Insights gained from this work led to 175 emissions reduction projects. Another is the creation of a carbon footprint platform that allows product development teams to predict emissions based on factors such as a product's chemical composition and the energy required to manufacture it.
3. Open up emissions tracking capabilities as digital products.
As technology leaders develop digital capabilities to reduce their carbon footprint, they can also offer those tools to their customers and suppliers to help them meet their own sustainability goals.
Last year, building materials company CEMEX launched a pilot initiative for its customers that uses artificial intelligence to optimize driver distances and instantly change delivery plans in real time. This is an effort to reduce carbon emissions and save gas.
Read the research brief: Creating enterprise capabilities for digital sustainability
