Suite to Site: Why Companies Fail to Achieve Climate Goals

Suite to Site: Why Companies Fail to Achieve Climate Goals

100% of the world’s largest 250 companies have embraced sustainability reporting according to KPMG. Today, the majority of the 5200 leading companies in the world have targets to reduce carbon emissions according to the same survey. This is great news. Unfortunately, at the current moment, many climate initiatives are destined to fail.

Most companies don’t operate sustainably today

Today, there exists a “Suite to Site” gap at most companies with respect to climate initiatives. Goals are set by the C-suite. These executives engage shareholders, NGOs, consultants, and policy makers to craft targets. Typically, the C-suite starts with rudimentary approaches to achieve their sustainability goals. They look for simple conservation steps such as lighting or water conservation and commit to purchasing power from renewable energy sources.

However, achieving the full objectives of the climate equation is much more difficult. The reality today is that workers, managers, and supervisors at most companies are unsure how sustainability translates directly into their everyday tasks and jobs. Largely speaking, companies have failed to connect sustainability goals at the Suite to specific actions that can be taken at the Site level (factories, offices, plants, etc).

This “Suite to Site” disconnect has real world consequences. If plant workers are unclear what specific actions need to be taken to reduce Carbon emission, water usage or electricity consumption, ESG will remain the exclusive domain of executives. For climate goals to be achievable, businesses must tie Sustainability goals to specific resource curbing actions that need to be taken by employees up and down the chain.

Addressing climate starts with data.

Data is the glue that connects the Suite to the Site. This glue is urgently needed if companies are to realize their sustainability commitments. The vast majority of companies today have no visibility into their carbon footprint. And those that do are likely underestimating the impact across their entire value chain.

Operational carbon metrics are visible months after the fact, either by analyzing utility bills or by engaging external partners who lack detailed operational data. Companies have even less visibility into the impact of their carbon footprint with suppliers for raw materials or shipping. Companies cannot achieve their sustainability goals without detailed data, but most companies lack timely access to the full breadth of data needed to understand their progress.

It doesn’t need to be this way. Consider a theoretical manufacturing company where the CEO has committed to reducing CO2 emissions by 30% over the next decade. How does this company bridge “suite to site” and empower carbon reducing action down the chain while also keeping track of how the company is performing at the aggregate?

  1. The Chief Data Officer creates a ESG dashboard for the CEO by collecting IoT data, sensor data, resource consumption data, etc.
  2. Plant teams embrace that goal and connect IoT sensors to devices collecting energy, temperature and output. This information is made available throughout the supply chain in real-time.
  3. As conditions change in the plant, plant staff are alerted when corrective steps need to be made. A plant manager may see that electricity consumption is more than usual at her plant, and determine they want to accelerate maintenance schedules or reconfigure lines or devices.
  4. Using SmartEdge devices, AI can even automatically change settings to adjust lighting or optimize energy usage or output of lines or devices.
  5. C-suite monitors ESG dashboard and sees electricity consumption falling in line to trend levels at the problematic plant.

Measurement goes beyond the shop floor. Companies can use alternative data to determine the CO2 footprint for suppliers and partners. Companies can use satellite imagery or transponder data to track the transport of everything from raw materials to finished goods, and include that detailed information when evaluating supplier sources, plant locations, or modes of transportation.

With this balanced view of internal operations and external partners, the C-Suite gains a full real-time view of how the company is progressing toward climate goals.

Leaders don’t just talk about sustainability. They act on it with Data+AI.

Leading companies already embracing data & AI to power their sustainability initiatives. They look at all aspects of their supply chain, from reducing the impact of suppliers and materials in their products, to reducing energy consumption, to choosing renewable sources.

Google has been carbon neutral for 14 years, becoming the first major company to reach that milestone in 2007. But Google has committed to go further by becoming carbon free by 2030. To achieve this, Google is embracing this 360 view of their sustainability performance. They’re using Machine Learning to automatically control cooling systems in their global data centers to reduce energy costs by 30% in their most energy-intensive buildings.

Trees are a natural and efficient way to remove carbon dioxide, but knowing where, when and which trees to plant is critical to ensure thriving trees and achieving sustainability goals. Google has built a global data platform and is working with the Crowther Lab to use alternative data sets and new analytic methods to increase the impact of restoration projects around the globe.

Google is enabling C-suite initiatives to be directly tied to action that can be taken by its partners, employees and community. Data and AI bridges the “Suite to Site” gap in sustainability. It ties broad goals to specific insights and actions and empowers the Site.

Data+AI flywheel in fighting Climate Change.

Google and other leading companies are proving that the climate workflows of the hypothetical manufacturing company need not be a future state goal. It can be implemented today with existing technologies, Data+AI enables leading companies to empower both internal and external stakeholders to take action.

In the end, data brings transparency. Transparency empowers action. Action generates data. This is the flywheel that could quite literally save the world.

Junta Nakai is the Global Industry Leader of Financial Services and Sustainability at Databricks. In his capacity, he is responsible for driving the world wide adoption of the Databricks platform across Capital Markets, Banking/Payments, Insurers and Data Providers as well as the implementation of ESG use-cases across all verticals.  Prior to joining Databricks, Junta spent 14 years at Goldman Sachs, where he most recently served as the Head of Asia Pacific Sales for the Americas in the Equities Division. Junta is bilingual in English and Japanese and holds a B.A. in Economics & International Studies from Northwestern University. He has been honored as the 2018-2019 Alumnus Fellow at Hopkins School and as an Austin J. Waldron Alumni speaker at Northwestern University. Junta is also the co-owner of Brooklyn Kura, the first sake brewery in New York.

As the Global Industry Leader for Retail & Manufacturing at Databricks, Rob Saker brings a wealth of industry knowledge to Databricks. Rob has successfully helped consumer goods firms such as MillerCoors and ConAgra navigate transformation with data and analytics, and also served in commercial roles as a retail Chief Data Officer at Crossmark and GM for AI at NCR.

Rob is responsible for Databricks Retail & Manufacturing strategies, partnerships, solutions and go-to-market activities. He meets regularly with executives across the industry and can share trends and strategies on how to best use data and AI to accelerate business value.

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