Big data and its big impact on sustainability

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Posting date: 2/18/2014 7:57 AM

Gathering and analyzing millions of data points can be difficult, but big data can tell business where to focus its efforts.

Advances in data gathering, computing power and connectivity mean that we have more information than ever before at our fingertips. IBM estimates that by 2020 there will be 300 times more information in the world than there was in 2005 – a total of 43tn gigabytes. And this data is being put to good use. Increasingly we hear how properly understanding data leads to positive results, whether this is Moneyball in sport or Nate Silver's predictions of the US elections.

We are only just starting to scratch the surface of how businesses can process, analyze and otherwise make use of all this extra information to help them make money, save money and become more sustainable. But when it comes to sustainability the great thing about big data is that it is unlocking the ability of businesses to understand and act on what are typically their biggest environmental impacts – the ones outside their control.

For pharmaceutical giant GSK only 20% of its carbon footprint is within its own boundaries: 80% comes from indirect emissions, with 40% of that coming from the use of its products such as propellant inhalers.

Big data's potential big impact on sustainability hinges on three simple facts:

• taking meaningful action on corporate sustainability requires an understanding of all the impacts that the business world and the natural world have on each other;

• the business world is a very complicated place, with lots of interactions between consumers and companies and suppliers and markets;

• the natural world is even more complicated, with lots of interactions between people and resources and ecosystems and climate.

Until relatively recently businesses struggled to get a full picture of the impact of their own operations. The information required to get an accurate understanding of even something relatively simple such as energy consumption was kept in separate documents, in varying formats, and across multiple sites.

But now leading businesses such as Nike and Ikea are trying to understand the entire end-to-end impact of their businesses, throughout the value chain. This includes looking at what's happening outside the boundaries of the business, including raw materials, suppliers, employees traveling, customers using products, how waste is dealt with, and investments that have been made.

Businesses know that measurement is one of the keys to management. Collecting and understanding data about how an organization operates leads to knowledge that can improve decision making, refine goals and focus efforts. When the Carbon Trust worked with BT, we found that emissions outside its direct control accounted for 92% of the total. To add to the complexity, two thirds of those emissions were from BT's supply chain, which involves 17,000 suppliers around the world providing products and services worth £9.4bn.

Big data has the power to transform how large businesses – the ones with biggest environmental impacts, but also access to large volumes of information – can take action on sustainability. A drive for data collection can also incentivize smaller suppliers to be more responsible in their own operations, creating a domino effect. Companies such as Hitachi are already providing an online platform for suppliers to submit how they meet sustainability criteria.

Providing quality data in the right format is becoming an increasingly important factor in whether a supplier is chosen. The worlds of data collection and analysis, sophisticated business software applications, and accepted measurement standards are coalescing to help drive transparent and improved sustainability performance for companies and their supply chains.

Measuring and understanding how doing business really does affect the natural world will open up new opportunities for bringing sustainability inside an organization: creating change, cutting costs and boosting long-term profitability in a resource-constrained world.

It isn't easy. There are challenges around gathering external data, as well as in analyzing and interpreting hundreds of thousands, or millions, of data points. But we are already seeing the pioneers in sustainability leading the way, bringing suppliers and customers along for the journey.

Author John Hsu is an expert in sustainability data at the Carbon Trust


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