With the onset of ESG disclosure regulation and net-zero pledges, companies are scrambling to account for their carbon footprints. This is a manual exercise, handled by consultants and questionnaires. For example, Ernst & Young is hiring 1,300 consultants for its “Carbon” sustainability practice in the U.K. alone. Many businesses don’t know how to improve their net-zero plans and ensure proper reporting, so they ask consultants for help.
The questions being asked to consultants include:
As of today, consultants are guiding companies to create their annual carbon disclosure reports and sustainability strategy. Recently, a number of carbon accounting startups have also entered this space, but they, too, are relying on consulting work and manual data entry.
While this might be an effective starting point for some companies, there are fundamental issues with this approach:
For the world to cut its emissions by 45% by 2030 and reach net-zero by 2050, annual reports won’t cut it. Achieving sustainability goals will require nothing short of a complete transformation of the global economic system. We need to rethink how emissions data is tracked, analysed, integrated, and used for smarter decision-making.
Rather than manually tracking and processing carbon data, carbon intelligence needs to be embedded into a given organisation and its processes, including everything from ERP to production management, procurement to transportation, buildings and energy management to employee travel, and more. Embedded Carbon Intelligence alone allows organisations to consider climate metrics at the time of decision-making (and not afterwards) and enable the necessary decisions.
For integrated carbon intelligence to achieve its potential, existing B2B software solutions need a ‘climate upgrade’. This transformation is already happening with early adopters, and we expect to see most B2B software being climate-aware by default in the near future.
Organizations using these solutions can then aggregate this information and, if necessary, use it for reporting. These new metrics can also enable scenario planning and be incorporated into daily decision-making, improving operational management and accelerating the net-zero journey in the process. Audit trails and logs allow you to keep track of how your decisions impact your company’s net-zero path. In turn, you can identify root causes at a granular level.
Leading software providers are bolstering their solutions with valuable additions (and thus increasing the value of the offer, retention, loyalty, etc.). These providers can offer previously impossible services to their clients, namely benchmarking climate performance against their peers, or, even better, improving software so it helps customers reach net-zero. For example, processes can be run when the electricity grid’s carbon intensity is low, low-carbon can be outsourced to vendors, and travel choices can be optimised.
We explored five use cases for Embedded Carbon Intelligence to better illustrate the impacts of this approach:
Embedded Carbon Intelligence isn’t just about reducing manual input and human error for carbon footprinting and reporting.
It is about elevating key climate metrics for better decision-making, allowing the journey towards net-zero to be more accessible.
It is about upgrading existing software solutions and making them climate-aware to meet customer demand for a new set of carbon emission KPIs and reduction strategies.
It’s about accelerating the green transition through data and insights.