How digital technology can help adapt your business for climate change
9 minutes read
Digital technology can play a game-changing role in making your business more climate-friendly. It can help you measure and reduce waste, energy and water use and increase operational efficiency—steps that will help reduce your carbon footprint.
“Digital transformation and climate change are two of the strongest factors affecting the business landscape today,” says Anna Walkowiak, Senior Business Advisor and Business Model Innovation Lead at BDC.
“The urgency to reduce our carbon footprint is greater than ever. Digital technologies can play an important role in helping companies reduce their impact on the environment.”
Walkowiak cites the Canadian government’s commitment to reduce greenhouse gas emissions by 45-50% from 2005 levels by 2030. “Canadian entrepreneurs have an important role to play as small and mid-sized businesses generate nearly 30% of the country’s emissions,” she says.
“The cost of not taking action is a price none of us should be willing to pay. Customers, suppliers, investors and even employees are increasingly scrutinizing companies for their environmental impact and choosing to do business with those that are making a low-carbon transition. You can either be a leader or be forced to play catch-up later and miss out on opportunities in the meantime. The good news is that taking the first steps isn’t hard or expensive.”
Customers, suppliers, investors and even employees are increasingly scrutinizing companies for their environmental impact.
How can I adapt my digital strategy to be climate-ready?
Walkowiak recommends three steps to adjust your digital strategy for climate change.
1. Review your goals and existing digital strategy
First, identify the key climate-related issues and trends that are important for your customers and partners. Then, meet with key employees to decide on and prioritize your company’s climate change goals. For example, you may decide to:
- measure and reduce your carbon footprint
- lower resource use (e.g., electricity and water) and waste volumes
- track data for sustainability reporting for customers (e.g., in large RFPs), certifications, regulatory requirements, investors, or employees
- reduce operational costs and become more efficient
- invest in life cycle assessment of your products and services and eco-design
- reduce your climate change risks
Next, review your digital strategy and make sure it is up to date. If you don’t have a digital strategy, it’s a good time to create one. A digital strategy is a roadmap for adopting digital technologies that support your business goals. Digital technology covers any tool that allows you to create, collect and process data. It includes:
- online collaboration applications
- e-commerce sites
- online survey tools
- digital dashboards
- business applications like accounting and invoicing software, enterprise resource planning (ERP) and customer relationship management (CRM) systems
- sensors (e.g. waste disposal, energy consumption, etc.)
- smart robotics
Companies that invest in digital technology tend to have better financial performance, be more productive and innovative, and offer better product quality. To maximize the benefits, companies must adopt technology strategically by aligning technology investments with business priorities. Additionally, a review of your business model can help you identify opportunities to leverage digital technologies and transform your business model for a low-carbon economy, which could unlock additional opportunities for growth.
“Digital technologies help your company not only deal with the unexpected, position you for scaling and growth, and de-risk the future of your company; they also help you come up with a cleaner version of your business.”
Digital technologies help you come up with a cleaner version of your business.
2. Explore digital technology options for climate data management
Next, review with your team or external consultant what digital technology is available to achieve your climate change goals. “Consider the environmental impact of your business processes and incorporate steps into your digital strategy to minimize the impact,” Walkowiak says.
Collect environmental data
One of the first steps on your agenda should be to capture data to measure your existing efforts and your progress as you make improvements. “You need data to know where you are starting from and where you want to go,” Walkowiak says. “You can’t manage something that you don’t measure. Digital technology not only helps you automate the data collection, but also take immediate action when needed to minimize impact on the environment.”
Two sets of data are especially important to gather:
Your carbon footprint. This involves collecting data on your company’s direct greenhouse gas emissions from operations. The process includes mapping your company’s key resources and activities (e.g. facilities, machines, raw material, fleet, waste disposal, heating, cooling) and determining the associated emissions.
Some companies go further and also calculate their indirect emissions. This includes emissions associated with use of their products, leased assets and investments.
Many applications are available for measuring and reporting carbon footprint data. Some ERP and accounting systems offer modules that automate tracking of carbon footprint data and facilitate reporting to communicate with stakeholders. Specific systems can help your business manage data on environmental, social, governance, health and safety performance. Applications such as these can provide more accurate and reliable data than Excel spreadsheets and make data entry more efficient.
Waste. Look for processes that are problematic, inefficient, error-prompt, not integrated, unmeasured and risky. It is important to identify the specific areas that generate waste of time and resources, as this will help identify digital technologies that result in increased efficiency.
You can expand this assessment to audit energy and water use and waste volumes (i.e. garbage, recycling and compost). For example, you can implement a system that detects abnormal trends for use of energy, water and other resources. Such a system can either trigger self-correcting optimization processes or send an automated alert to designated employees to investigate and resolve the issue.
As part of their digital strategy, companies should implement technologies to increase energy efficiency in buildings and manufacturing process and to track waste (e.g. sensors in waste bins) and handling cost (e.g. reports on weights and invoices).
Examples of technology that can help reduce your carbon footprint
- online collaboration tools, VR and AR—allow you to reduce business travel
- dashboards—let you monitor energy, efficiency and waste data
- laser cutters—reduce material waste
- IoT devices and sensors—reduce energy use; monitor and optimize waste bin disposal
- dynamic routing applications—optimize transport
- smart machine and equipment sensors—reduce machine idle time and field service visits
- building technologies and smart meters—reduce energy for heating, cooling and lighting
- machine learning and artificial intelligence tools—help you design greener products
- online sales—reduce bricks-and-mortar footprint
- digital analytics and marketing—allow you to research market interest in green products and promote your sustainability efforts
3. Execute, transform and innovate
Once you come up with a shortlist of priority projects, create an action plan for implementing them. It’s important to set out a timeline for each initiative and designate someone to be responsible for carrying it out. Also be sure to follow up with regular meetings to gauge progress, address any challenges and create achievable milestones. “The idea is to continually improve,” Walkowiak says. “Technology is always evolving, so you should too.”
Also, don’t be put off by the daunting idea that you need to transform your business overnight. “You will be surprised how energizing and engaging a climate change roadmap and your projects will be for your employees,” Walkowiak says. “The process is an excellent occasion to rethink your business model and culture and to innovate.”
Create a digital plan
A smart technology strategy can have a positive effect on your people, your customers and your bottom line. Learn more about developing a digital strategy to position your business for long-term success by downloading our free guide for entrepreneurs: Making Technology Work for Your Business.