Why Sustainability Practitioners Need to Embrace Big Data
The outcome of the 2012 presidential election in the United States, which saw President Barack Obama fight to win a second term against the Republican Mitt Romney, was uncertain. Obama’s record-breaking fundraising was no guarantee of success in the face of challenging domestic issues such as how the US would respond to the economic downturn or the future of the Affordable Care Act.
But one man did call the result correctly. In fact, the American statistician and writer Nate Silver – who started his career analyzing and forecasting the performance and career development of major league baseball players – correctly predicted the winner in all US states.
How? Well, Silver is a self-professed data geek. He has built systems that give him access to all the data he needs to make the most accurate predictions – whether in forecasting election results or estimating how many home runs a specific player is likely to make in a year. And crucially, he understands how to read that data.
As famous as Silver has become as something of a data journalist, he’s not alone in being able to understand data and use it for positive results. With advances in connectivity and the power of technology to gather data, we have more information at our fingertips than ever before. According to IBM, by 2020 there will be 43 trillion gigabytes of data — 300 times more information available to use than there was in 2005..
Corporate sustainability managers are beginning to realize the benefits such information can have in supporting their environmental and social impact reduction efforts. Typically, the biggest impact a company can have on the planet sits outside its sphere of influence, along its supply chain. It is not uncommon for more than 80 percent of a company’s total end-to-end carbon impact to be found within the operations of its suppliers – and for its direct operational impacts to account for as little as 5 percent in many instances.
For these big businesses, their supply chain is large and complex, made up of tens of thousands of suppliers across the world spending hundreds of millions of dollars. Understanding who those suppliers are and what impact they are having on the planet is crucially important if the company is to reduce its overall impact.
But it’s not easy. In fact, without the right data and information on those suppliers, it’s very difficult indeed.
Companies have only just started scratching the surface in understanding how they can gather, process, analyze and make the best use of data that will help them save money, make money, build more resilient supply chains and ultimately become more sustainable.
More and more organizations are turning to software to help them get a grip on the data that will help to unlock these savings. An elaborate sustainability management system offers a centralized way to collate and manage data and report on the sustainability performance of suppliers. By inviting suppliers to answer a series of questions, it can automatically analyze the responses and identify any potential risks within the supply chain. Now, with a bird’s-eye-view of its supply chain hotspots, the sustainability team has access to clear and consistent information that allows them to work closely with suppliers to resolve any issues and to educate them about their company’s sourcing and commodity standards.
Of course, software can also be used to encourage environmental impact reduction by asking suppliers to log carbon, energy, waste and water data – and identifying areas where improvements and savings could be made.
The use of data is also enabling companies to improve transparency. Ripples from the 2013 collapse of the Bangladesh Rana Plaza building are still being felt across the world. More than 1,100 people died in what was the deadliest garment-factory accident in history – and consumer attitudes toward supply chain issues, such as working conditions and forced labor, have never been the same. As with food that ends up on our plates, more and more people are interested in where their clothes and other consumer goods are coming from – and they want companies to be more transparent in giving up that information. Companies are realizing that having a full picture of their supply base, backed up by data that points to potential risk, will stand up to this increased scrutiny by consumers and the media – and help to protect their valuable corporate reputation.
Complex environmental and social challenges are getting bigger all the time, particularly in unwieldy supply chains which often contain companies located in parts of the world most at risk from issues such as climate change and water scarcity. As data management software gets more and more sophisticated, aiding performance management and strategic decision-making, rather than just pure reporting, knowledge is giving companies the power to effect positive change along the value chain.
Christina Siun O’Connell is the director of business development at cr360. She has worked with cr360 since 2007. Prior to joining cr360, she was the founding director of CSRwire and senior vice president of Computershare’s Flag Communications, where she led the consulting team for Walmart’s first sustainability report and consulted on supply chain and sustainability reporting.
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