Point of view

Let the data lead: How to solve the climate crisis

If we want to save the planet, we need to see the climate crisis for what it really is: a massive data and change management problem. And then we need to act.

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For more than a quarter of a century, the world's leaders have been striving to formulate a practical action plan to reduce the impact of climate change. There have been some successes along the way, and yet there is still so much more to accomplish.

Perhaps looking at the problem through a different lens will yield new solutions. There is an opportunity to view climate change as a data, insights, and change challenge (albeit at a global scale). And with the right technologies and agile approaches, we can change the paradigm to find a solution.

Audacious and achievable

Companies often set big audacious goals for themselves and their employees (usually focused on revenue growth or other core goals). The most successful companies back up their goals with smart, agile, and data-driven action plans that provide a practical roadmap to success. They break down large end-to-end problems into smaller activities and measures and distribute them across teams that use insights from data to address specific components of the problem.

Now, countries and companies are setting big audacious goals around climate change. China aims to reach net zero by 2060, the US is working toward net-zero emissions by 2050, and Sweden has committed to a 2045 date. Many businesses say they will be more aggressive, still. More than 200 global companies (including GSK, Amazon, and Salesforce) have publicly pledged to produce net-zero carbon across their businesses by 2040.[1]

What is driving these companies and markets into action is not just an altruistic ambition or social goal. It's data (also known as science). The data tells decision makers that the current trajectory is unsustainable. It tells them that the risks of unchecked climate change outweigh the costs of mitigation and management. And it tells them that their ability to retain customer loyalty and attract new talent largely depends on their ability to act quickly on this issue.

Indeed, much like any large complex business problem, the challenge around climate change encompasses four key elements – data, technology, people, and process. And, as with most other large complex business problems, the ability to manage these elements often dictates the speed and success of the solution.

The agility to achieve

First, it's worth highlighting perhaps the greatest lesson learned from driving large-scale digital transformations that can apply to the climate-change challenge: big goals are much easier to achieve when you break them down into bite-sized chunks. In part, this comes down to the psychology of success – small wins tend to create momentum; converging momentum creates movement.

But there are other, more practical reasons to want to take a more agile approach. When working on the constituent parts of a problem, decision makers can pivot faster as ideas emerge, projects fail, or expectations change – after all, there are no manuals for digital transformation. An agile approach encourages greater innovation while delivering critical risk reduction. It allows greater flexibility of capital allocation in a resource-constrained world. And it encourages everyone to move at a higher velocity, which the world greatly needs if it still hopes to meet its Paris Climate Agreement pledges.

Data takes the lead

Of the four elements to draw on, data holds a key to how executives can achieve their climate goals. Companies are using advanced analytics on internal and external data to identify opportunities for carbon reduction, measure their carbon footprint in real time, and create bold strategies that deliver growth and reduce their impact on the planet. According to a report by consulting firm BCG, businesses believe that they can achieve 40–60% of their net-zero ambition with existing technology.[2] And at a more micro level, consumers and employees are starting to measure their individual carbon data and use the findings as they make purchasing decisions.

With machine learning (ML) and artificial intelligence (AI), enterprises can solve some of the problems that have been holding businesses back from action. And by applying predictive analytics, they can assess what results their emission-reduction activities might deliver and identify opportunities for improvement.

Data is also shaping technology's evolution. Consider, for example, how mobility data from companies like Google, Apple, and Waze informs the development of new transportation technologies, systems, and investments. Companies are using environmental data to improve their technologies and create better climate outcomes. Others use data to optimize their shipping loads, leading to fewer trucks on the road and lower CO2 emissions.

Three steps toward fighting climate change with data and digital

If the solutions to climate change lie in combining data, digital technologies, people, and process, how can companies accelerate real action on the climate agenda?

At Genpact, we spend our time helping complex organizations achieve their transformation goals. And our experience has taught us there are three key steps to applying data and technology to big problems:

1. Establish a foundation of data

All too often, data is dark, discontinuous, and disconnected. And never more so than on the climate agenda. In part, this comes down to a lack of consensus on what should be measured and reported. It also reflects a lack of measurement overall – the BCG survey found that only 9% of companies can measure their carbon emissions comprehensively. And even then, most companies admit an average error rate of 30-40%.[3]

To start, organizations need to get the infrastructure in place by building data lakes in the cloud so they can tap into their existing data, integrate external sources, and drive better decision-making. Advanced analytics is key. Automating processes adds the speed needed (and reduces paper use too). The bottom line is that without the right data infrastructure, companies will struggle to create a baseline that will enable them to predict, model, or act on their sustainability goals.

2. Turn that data into insights

When faced with a needle-in-a-haystack challenge, data-driven insights help provide answers. This is about having the right data and analytics technologies, including ML, AI, and natural language understanding, supported by the right capabilities, to drive business-centric insights.

Essentially, ML and AI can extract and harmonize data when companies are faced with semantic incongruity. Analytics models can then predict likely outcomes. Data on its own does not uncover answers. But by bringing data-led insights together with the people who understand the business, industry, and processes so they can apply their skills and judgment, they can make data-driven decisions on what action to take for the good of the organization, its employees, customers, and the world.

For example, if employees have access to the carbon impact of different travel options, they can make the right decisions when bookings tickets. These data-led micro-decisions are more effective than broad-sweeping company mandates or policies.

3. Invest in change management and the user experience

In large transformation programs, the biggest challenge isn't the technology or the project management, it's making the change stick.

Again, breaking massive change into actionable, bite-sized chunks allows you to take a more agile approach. It also means rethinking and redesigning existing processes and models around the employee and user experience. And yet, when it comes to climate goals, few companies or countries seem to place enough focus on creating the right conditions for change. And that is stalling progress for the very people tasked with delivering on the agenda.

To use the previous example, nudging individual employees with insights on the environmental impact their travel choices will have puts the onus on the user and drives change more effectively.

Inspire action

These steps may seem achievable in a standard transformation project. But how do they help accelerate real and lasting action on the climate agenda? We have a few examples.

  • Identify bigger opportunities with bigger impact. Companies across industries are harnessing their existing enterprise data and providing their stakeholders with a much clearer picture of where their organization may become at risk from climate change and what they need to do to become more sustainable and have a bigger impact
  • Extend the company's reach to transform the supply chain. Companies like Coca-Cola and consumer-goods firm Clorox have set ambitious climate goals for themselves and for their supply chain and logistics providers.[4] By focusing on these Scope 3 emissions – emissions from assets not owned by the business but generated because of its activities – Clorox is incentivizing broader change across its supply chain and the economy.
    These initiatives require a huge amount of integrated data, deep analytics, and smart change management to prevent any potential negative impact on customer satisfaction, safety, or quality.
  • Create value at every level. Globally, over 30% of CO2 emissions are from road or aviation freight.[5] So, we've been using our analytics expertise to help organizations maximize their transport efficiency. We applied predictive analytics to help a communications provider keep its service vehicles appropriately stocked so it can eliminate a second 'truck roll' and reduce its carbon footprint. That also allowed the company to improve its inventory management, have fewer trucks on the road, and enhance customer satisfaction – for value at every level
  • Drive change across the ecosystem. LIVEKINDLY Collective – an organization that promotes and facilitates the benefits of plant-based diets – is showing how data and technology can change the world. The organization wants to influence the whole food system 'from seed to fork'. We've helped it use data and analytics to not only predict customer demand and needs but also combine crop science data with farm, soil, and weather data to help farmers optimize their crop planning. The company also relies on cloud technology to remain 'asset light', providing it with greater focus and agility
  • Be transparent and accountable for your actions. It's not just about what you do, but also how you measure and report it. And this is true at the product level, the corporate level, and the global level. Our work with Formula E team Envision Racing (the first certified carbon-neutral team in the championship) helps it maximize its impact on the track and minimize its impact on the planet. We've automated the carbon-emissions reporting process so the team can quickly access valuable insights and course-correct as needed throughout the year. Off the track, we've also built a carbon calculator to help employees make more environmentally conscious travel decisions

Ready for the future

The shift toward viewing climate action through the lens of data, technology, people, and process can deliver enormous value and impact to your organization.

  • Better manage your risks. The more data and insights your organization has, the more agile it can become, which will make it better prepared for future risks
  • Meet stakeholder expectations. Stakeholders have high expectations for environmental sustainability, and reporting trustworthy and detailed metrics drives engagement
  • Be more agile. Use every opportunity to create a more agile organization and imprint agile ways of working onto your company culture
  • Strengthen your ecosystems. Find common purpose and work together with your organization's ecosystems – including partners, customers, communities, and even competitors – to create better outcomes for everyone
  • Engage current and future employees. People want to work for companies that stand for more than just profits and that live their purpose

The underpinning of change

Governments, companies, and individuals have committed to progress on the climate agenda. Achieving measurable results, however, requires all players involved to think of the challenge in terms of a large-scale transformation project – one underpinned by data, analytics, and digital technologies. That, after all, is something we as a planet, as decision makers, and as individuals, can come together to help solve.

Learn more about digital transformation at Genpact

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This point of view is authored by Sanjay Srivastava, chief digital officer at Genpact.