Just how much will videoconferencing, telecommuting, or hybrid vehicles in the company fleet reduce the output of greenhouse gases? To what degree will a change in materials or methods affect other processes and the bottom line? How does one factor supply chain practices into one’s own carbon footprint? Which initiatives will have the best impact on the bottom line, factoring in all interdependencies? To answer such questions, organizations need a combination of descriptive and predictive insight—the ability to track meaningful green indicators, validate strategies and costs before investing, identify causal relationships, and forecast outcomes.
That sounds like a halcyon vision, but analytic science has made it possible. With analytic intelligence, organizations can measure emissions and energy consumption throughout a value chain or product life cycle, ensure regulatory compliance, and build green strategies with proven return on investment.
They can determine which resource conservation efforts or greenhouse gas reduction strategies will have the most impact—physically and financially. In a recent survey of C-level executives conducted by BusinessWeek Research Services, almost half of respondents (48 percent) indicated that they believe business analytics can have an impact on their sustainability efforts.
They had good reason for that belief. Among those who had already adopted business analytics methods, many had seen improvements in several areas surrounding sustainability management, including: optimizing financial planning and management (50 percent), managing change (49 percent), sustainable business growth (47 percent), answering high-impact questions (46 percent), and risk management (43 percent).14 EXTEND the scope and depth of sustainability management capabilities Global reporting standards go a long way toward establishing a common language that can be used among businesses, consultants, and government entities. But there is still much room for interpretation, and that means room for inconsistency—particularly when reporting across multiple organizations in the supply chain. For example, the GHG Protocol sets accounting standards for:
- Scope 1 emissions that come directly from sources that are owned or controlled by the organization • Scope 2 emissions generated in the production of electricity consumed by the organization However, the protocol addresses only some Scope 3 emissions—those that are created as a consequence of the organization’s activities, but from sources not owned or controlled by the organization.
This is the realm of the supply chain and the extended product life cycle, including such factors as emissions from extraction and transportation of raw materials, waste disposal, and transport of finished products. SAS is a stakeholder in the advisory process for Scope 3 and Product Lifecycle measurement standards. The standards are still being expanded and will more fully address supply chain issues in the future. In October 2009,
Walmart awarded a US$420,000 grant to the WRI to create a set of accounting tools for companies to measure the carbon footprint of their supply chains. Technical committees and stakeholder communities are currently involved in building out the guidance for these new standards. The announcement coincided with the beginning of the first phase of Walmart’s Sustainability Index initiative.
The retailer’s top-tier suppliers in various product categories are now reporting the environmental impacts of their operations, such as greenhouse gas emissions, water, and waste data. Eventually,Walmart wants to collect data from all of its roughly 100,000 suppliers in order to rate the sustainability of consumer products. If the organization structures its ICT systems on a common foundation with shared metadata, the sustainability management solution can be extended and enhanced through integration with other ICT solutions. data center’s overall efficiency rating, in alignment with servicelevel agreements. The world is on the cusp of a historic breakthrough in the application of ICT to address sustainability management.