Environmental sustainability has recently become an important variable in guiding corporate business practices. 70 percent of the respondents from an MIT Sloan Management Review survey said sustainability is permanently on their management agenda—and an equal percent of those respondents said they had done put it on their ageda in the past six years. With more companies now recognizing how important sustainability is to consumers and their bottom line, many are turning to analytics to guide their sustainability strategy.
An article featured in the Wall Street Journal’s CIO Report highlighted three areas companies should prioritize when applying analytics to sustainability initiatives (examples are included):
1. Gaining Insight through Data Automation: Automated data empowers organizations to accurately identify and track the progress of sustainability initiatives. The greater consistency and accuracy of automated data also contributes to the overall quality of voluntary and involuntary emissions reporting. As Deloitte Consulting Principal Lee Dittmar notes, however, “today, too many organizations manage sustainability data on an ad hoc or manual basis, often with error-prone processes.” Michael Koploy from Software Advice notes a successful example of data automation involving multinational food corporation, Danone. The company used its Enterprise Resource Planning system data to quantify the environmental impact of each of its 35,000 products. With that information, the organization was able to reassess characteristics of its product lineup and transportation methods.
2. Implementing Performance Monitoring Tools: Data collection is made possible through the use of performance monitoring tools. These tools can help validate sustainability efforts, such as those focused on reducing asset-level energy use and greenhouse emissions. They are also highly valuable when trying to engage employees and demonstrating the business case for sustainability to executives and other stakeholders. A successful example of implementing monitoring tools comes from Citadel Environmental Services, Inc., which partnered with Soladyne Capital to install energy monitors. While studying data from the monitors, Citadel reprogrammed its AC thermostats, light timer, and upgraded its old servers. The company’s efforts cut its energy bill by 25 percent. For me, the first example that comes to mind is my alma mater’s (Dickinson College) recent introduction of an inter-dormitory energy challenge. When I was a student, I remember that one of the school’s officials said in order to have such a challenge, new energy meters would have to be installed. The old ones, apparently, had not been individualized by building. Also, as we have discussed previously, similar technology has trickled down to the residential sector.
3. Extending Visibility Through the Supply Chain: The supply chain always has a huge impact on a product’s environmental and social footprint. By monitoring suppliers all the way up the supply chain, a company can enhance its own brand. Wal-Mart performed this on a huge scale by forming the “Sustainable Value Networks” of stakeholders who examined Wal-Mart’s suppliers. Shortly thereafter in 2009, Wal-Mart reversed its negative perception among consumers and ranked 3rd among 35 multinational retailers, up from last just two years prior.