In just a few weeks, humanity has made a rapid jump from dialogue about climate change to there being no other than Covid-19 related news in the media. Many cities where climate protests caused disruption just a couple of months ago are in full lockdown mode because of the virus. Greta Thunberg used to be in the news practically daily; in pictures scowling at Donald Trump at the UN headquarters to stories about her sailing to the wrong country to attend a climate summit. Now you hardly hear about her, apart from a news piece of her saying that she thinks she has had coronavirus.
Covid-19 and the climate discussion
What does all this mean for the climate discussion? What about all the mitigation initiatives planned and launched recently by businesses around the world? There is an emerging school of thought centered around the belief that the pandemic crisis is a useful stress test.
It is, however, clear that if governments, companies, and individuals will all be struggling with financial problems, climate change-related policies and initiatives are amongst the first ones to be abandoned. The climate crisis, unfortunately, is not close enough to the bottom of a corporate equivalent of Maslow’s Hierarchy of Needs.
What could be done than? First of all, we should never focus just on the short term and the immediate problems at hand. Long term thinking and strategies are equally important both in the governance of countries and companies.
Opportunities are hidden in data
How could we continue mitigating environmental problems and climate change now that we have significantly smaller budgets for the purpose? The answer is data. According to the World Economic Forum, the entire digital universe will “reach 44 zettabytes by 2020”, “40 times more than stars in the observable universe” (Jeff Desjardins, WEF 2019). There is, therefore, an unbelievable amount of data already in existence, and some have said that data is emerging as a new currency or the new oil. Most companies already possess massive data sets on everything ranging from machinery performance to customer records. Many large organisations have even a dedicated C-suite position, a CDO (Chief Data Officer), to oversee the data management functions of the business. Most companies, however, remain hopelessly behind the curve.
According to Harvard Business Review (What’s Your Data Strategy 2017 – Leandro DalleMule and Thomas H. Davenport), “Cross-industry studies show that on average, less than half of an organization’s structured data is actively used in making decisions—and less than 1% of its unstructured data is analyzed or used at all”.
Most companies are, therefore, sitting on a potentially extremely valuable asset and not doing much about it. We argue that to continue our sustainability journej when the more expensibe otions are now off the table, data offers us a way in which we can improve efficiencies with a real impact on the environment. Companies just need to know what steps to take.
Data, of course, needs to be broken down and analyzed for it to have any value and provide us with the right information. Peter Drucker, one of the best-known management consultants in history, defined information as “data endowed with relevance and purpose”.
How to use data analytics to become a more sustainable organisation?
How to know where to start?
A good starting point is understanding what the datasets collected are and ”making sense of them”. Monitoring and understanding real-time data usually requires some type of a visualization tool, being it a dashboard or a report that can be generated. Once data can be visualized, or as Peter Drucker put it, turned into information, it is easier to use it to pinpoint anomalies or diverging trends. Inefficiencies identified signify opportunities for adjustments that promote sustainability. This information can also be benchmarked against others in the same industry vertical, which also helps to find areas for improved efficiencies.
Understanding the present is, of course, only one small part of what can be done with data analytics. Historical data and information about the past can be equally powerful as a tool for improving efficiencies and becoming a more sustainable organisation. One example is using past data to prolong the life of machinery by looking at the possible correlation of conditions that have preceded an equipment failure. These findings can then be used to identify events that provide warning of when a machine is about to break down. Timely maintenance in these cases reduces the need for more complex repairs, and the efficiency gains are useful not just for sustainability but can save companies money.
We can also use the information and understanding we have derived from old and current data, and use these to model what will happen in the future. We can use this type of analytics for several things, including minimising price shocks and supply disruption. Deploying newer technologies like machine learning can further help mitigating emerging risks. A system that uses algorithms to identify and alert employees to patterns that cause inefficiencies can provide significant benefits for corporate sustainability.
Proof of concept tool instead of investing in expensive analytical solutions
How can organisations apply relevance and purpose to their data, particularly if they do not have a CDO, a data strategy in place, or mechanisms to select and focus on the most relevant data sets? We believe that this can be initiated by designing and implementing a simple Proof of Concept (POC) solutions that leverage existing data and aim to improve the sustainability of the company and everything it does.
POC in this context means that businesses can initiate the journey towards greater sustainability by implementing relatively small, limited scope and budget solutions that explore the possibilities offered by data analytics, visualisation, transformation, modeling, and enrichment. These smaller-scale tools help to navigate the business towards solutions that provide significant business and sustainability benefits. Once the right solutions and business cases are identified, more resources can be allocated to build on and improve the POCs created. This is a sustainability solution that is based on an asset already owned and generated by businesses and, equally importantly, does not require significant resources to implement.
Focus on digital sustainability
Whatever happens, Covid-19 will eventually go away relatively quickly, and climate change will not. It is, therefore, important that we do not lose sight of a problem far more serious and damaging than the pandemic. Our arsenal for dealing with it might have diminished in short and medium- term, but it does not mean that there is nothing that we can not do now.
Some might say that it’s easy for larger companies that have dedicated resources for this purpose. If a company already has a data strategy and perhaps even a CDO or similar resources in the organisation, it arguably might be easier for them than a smaller SME. However, internal technology departments often have limited experience in sustainability driven solutions.
Thankfully there is increasing expertise in leveraging technology for improved sustainability, and third-party development teams are easy to source and deploy. A UK Google search for “sustainable technology solutions” recently yielded 496 million results, so there is help out there. All is needed is a decision to keep sustainability on the agenda, and the data-centric Proof of Concept approach introduced in this article provides the perfect tool for finding solutions with the best cost-effectiveness ratios. Finally, it is important to remember that sustainability simply is ensuring making profits today does not endanger the ability to make profits tomorrow.
Contingent Managing Director Sustainability for Techstars
CEO of Codibly