Can Digital Transformation Save the Planet?

Feb 08, 2016 2:54 PM  By

When the United Nations met in Paris for the Climate Change Conference they were able to achieve a significant milestone. For the first time in 20 years, a legally-binding agreement on climate was signed by almost 200 nations and will be implemented in 2020.

And while leaders work to reduce their impact on global warming, it’s leaving many businesses wondering what this means for the future of their operations.

The good news is that businesses have many opportunities to reduce impact without reducing the success of the business. In fact, in many cases, steps to cut out waste can improve operations, sustainability efforts and efficiencies. By transforming business process to adopt digital technologies, retailers and consumer product companies can help reduce operating costs and the resource consumption needed to meet the spike in demand.

A recent study conducted by the Global e-Sustainability Initiative and Accenture Strategy concluded that during the next 15 years, it’s possible to maintain 2015 carbon emission levels by digitizing processes and incorporating data into decisions regarding resource use.

Additionally, by integrating information and communication technologies, carbon dioxide emissions could be slashed by 12.1 gigatons globally by 2030.

Retail and Consumer Products

Retail and consumer product companies have the opportunity to take a slice of the carbon-reducing pie through data analytics. Information pulled from analytic software can identify sustainable practices, such as how to use less material in packaging and ways to reduce energy use in the manufacturing process. Furthermore, by sharing available inventory and fixed assets, supply chains are able to limit the amount of inventory produced. By optimizing e-commerce systems, companies are capable of generating greater efficiency while lowering emissions by 0.5 gigatons.

A profitable and sustainable business is not an unrealistic expectation. In 2009, SAP consumer products customer Unilever launched a strategy called “The Compass.” The goal for the campaign was to sustainably double the size of the company’s business. In fact, Unilever sought to source 100 percent of its raw agricultural materials through environmentally-friendly processes.

With 4 million invoices to process each year – 90% being issued on paper – Unilever was able to implement technology solutions which simplified and accelerated core processes. Through the use of a global invoice management solution, the company increased productivity and data quality while also reducing training costs.

Cutting Emissions Across the Board

Yet, it’s not just retail and consumer product companies that can make this shift. SAP research found that among the 12.1 gigatons that could be cut due to digital integration, six major industries have the opportunity to save 7.6 gigatons, including manufacturing, transportation and logistical operations.

Through improvements in production, such as the Internet of Things and automation, manufacturers are able to optimize outputs to reduce excessive production and resource consumption – including water and energy. On top of this, energy and resource use can be lowered by re-thinking practices, such as sharing machines and other assets across facilities.

Once the manufacturing process is complete, real-time traffic management and smart routing technology can help improve transportation resources. Not only can products be delivered more efficiently, but fuel consumption can be slashed, lessening carbon emissions.

Through sustainable operational practices during the manufacturing, transportation and logistical processes, businesses can save 2.2 gigatons of carbon emissions by 2030 – which is one step closer to maintaining 2015 emissions throughout the next 15 years.

Lori Mitchell-Keller is Global General Manager, Consumer Industries at SAP