Thursday, March 23, 2023

Ready, steady… green!

There are two big climate-related questions that the digital sector must face. Is the industry a green beacon of hope or rather a black lump of carbon despair? Is going truly green – as in setting science-based climate neutrality goals and actually acting to deliver them ASAP – a problem or an opportunity?

Staring with the first point: what is the digital’s overall climate footprint ?

The science is clear. The climate crisis is the biggest challenge that the humanity has ever faced. We have brought it upon ourselves. We continue to exacerbate it extracting and burning fossil fuels. But surely it is not really the problem of the digital – or is it? Any economic activity has its impact on environment and climate. The digital sector is no different. We are responsible for 4-5% of global greenhouse emissions and use up to 10% of global electricity.

Some may imagine that since a smartphone has no exhaust pipe and a computer has no chimney, they are “clean”. Well, they are not. You need a lot of hardware for the digital to operate. Think about all those cables, towers, satellites, servers, customer devices… And then you need to make it all work. And, alas, we have not yet mastered powering our tech with magic– we need electricity. And a lot of it! The digital products and services can only be as climate friendly (or harmful) as the infrastructure and energy they run on. You can only be as green as the weakest link of your value chain. Let us never forget that or try to shy away from this responsibility. It may catch up on you fast and nasty with the increasing regulatory pressure and consumer conscience.

But once you accept this charge, you can put your own carbon backyard in order: look into your operations to understand the priority areas that emit the most; set a science-based net zero carbon goal; and – most importantly – act to reduce as much greenhouse gas (GHG) emissions as rapidly as possible.

This will provide your business with two benefits. Firstly and obviously, you are doing the right thing. Business must take its responsibility for climate change and act – and you are on your way. But secondly, it gives you credibility to look into how your digital products, services and solutions can assist your customers, be it B2C, B2B or B2B2C, in their own “green” challenges. More and more individuals and organisations need or want offers that have a clear carbon tag or that help them understand and reduce their own resource consumption or GHG emissions.

The digital has a double role to play. Yes, we must get our value chain emissions to net zero. But at the same time we can be part of the solution to the climate emergency and thus build value to all our stakeholders. But it will only work in the long run if we make sure to get our own backyards in order – through decisive, rapid, science-based action to reduce GHG emissions across our entire value chains.

What about the second big question: is this climate responsibility a problem and a cost – or rather an opportunity and a source of value?

The response to the first question may hint a reply, but let’s look into that step by step.

You can still hear quite often:

  • green is difficult;
  • climate action costs a lot;
  • my company has more pressing investments;
  • our customers do not really want it and, you know, customer is king! (even if usually only when we need an excuse not to do something);
  • our quarterly revenues have a priority over “charity and such”;
  • there is no regulatory framework, and in any case systemic solutions are needed so our company should not be singled out.

Sorry to say, but it sounds like a litany of excuses. Especially so in the digital sector.There are many other industries with a much bigger challenge to rapidly transform. If we want to have any chance to meet the Paris Agreement’s targets of limiting the Earth’s warming to below 1.5-2 degrees Celsius, the world must get to net zero. This obviously includesthe business –In particular in developed countries, as we have a disproportionate role in driving the climate crisiswhile the developing nations of the Global South bear the brunt of the consequences. We have to do it anyway: real, tangible, science-based climate action is not nice-to-have, it’s a must. So rather than look for excuses and stall, it is a much better investment of our time and energy to find the best, fastest, most rational and beneficial roadmaps for our businesses.

There is an important point to be made here. Climate action should not be perceived as a cost. Donot confuse real action with greenwash, which is always just a short-term expenditure to distract a less conscious or aware audience with smokes and mirrors. Greenwash is like buying a pot of green paint to cover these nasty chimneys spewing out smoke in your backyard. You have to pay for the paint, you have to pay someone to do the work. And then you need to keep doing (and paying for it) over and over again. And be sure someone will call you on it at some point anyway. All this recurring cost for nothing!Climate action is about understanding and transforming the way you operate. The greenest is what you don’t waste, what you don’t use. Working on your efficiency, improving your processes, optimising energy use – these are savings, not costs. Not to mention renewable energy from new wind or solar sources which has been much cheaper than fossil-based energy for years now. These savings can help you cover the necessary outlay to improve and decarbonise other processes.

The customers, the regulators, the media and the general public make it quite clear in an increasing number of markets that quite soon either you’re (truly) green or you’re out. Whoever sets off first on the net zero path will be ahead of the laggards – and in a few years no excuses will be accepted any longer. Setting on a path to science-based climate neutrality can be a source of a true, long-term competitive advantage essential for the survival and thriving of your business.

On your marks!