A financially sustainable approach to carbon neutrality

Reducing carbon footprint requires an in-depth awareness of your company’s operations and processes.

Data-tracking exercises that connect different metrics, sources and business components in an accessible format (a dashboard, for example) are vital for driving interventions to reduce emissions in operations. Leaders can also forecast changes to emissions levels based on anticipated growth in sales or changes to the product line. This performance visibility allows leaders to detect and respond to situations with agility and proactively improve their business models.

My experience has taught me that about 90% of carbon emissions come from supply chains. So, a good place to start is addressing the carbon tracking through your supply chains, as well as those of your suppliers. Leaders need to first understand their suppliers’ commitments to emissions reduction, before baselining performance and co-identifying improvement opportunities.

One of our customers, a manufacturer of pods for coffee machines, drew inspiration from observing the supply chains used by dominant market players in their industry. Rather than follow the crowd and produce coffee pods with plastic that ends up in landfill, which adds to carbon footprint levels, our client designed biodegradable packaging. Thanks to the design, users can compost the pods and use them in their garden to help their plants grow. By creating biodegradable pods and giving users a true choice between solutions, the manufacturer empowers their end users to actively exercise their sustainability beliefs through their spending choices. This move not only boosted the company’s reputation, but it also created a competitive advantage by demonstrating to customers they genuinely care about sustainable causes.

Thorough data tracking of business activities can reveal the carbon emission hotspots that need to be prioritized. And this data can open up opportunities to outpace your competition. For instance, reporting data on your ESG progress could enhance your company’s attractiveness to potential investors seeking green investment prospects.  

Once you have identified your top carbon hotspots, you need to map out your plan of attack. At this stage, digital tools should be leveraged to enhance your energy efficiency.

Digital twin technologies, for instance, can provide powerful insights into reducing carbon emissions. By simulating your company’s existing workflows and processes, these systems provide a safe environment for business leaders to experiment and test ideas without the risk of causing damage or wasting resources on a failed approach. Digital twins enable learning, which can inform the investment strategy to reduce emissions.

In smart manufacturing, digital twins have the functionality to interact with supply chains. This interoperability creates an ‘industrial metaverse’ where equipment faults can be prevented to minimize downtime, shifts in product demand can be responded to in real-time and energy use can be reduced when demand slows.

Of course, digital twins are only one option in the toolkit. Cloud computing, AI, automation and robotics are other valid options to consider when shrinking your carbon footprint.

The most successful companies are those who are not scared to push the boundaries, asking themselves questions such as, “Our overall equipment effectiveness (OEE) is running at 60%, but how do we push this higher?”

Closed-minded organizations that stick to their comfort zones and ignore the green agenda will miss out on opportunities to evolve and gain competitive advantage.

These three viewpoints will ensure your business follows the forward-thinking companies: