By Didem Tali, Contributor
In the last several years alone, economic losses due to human-induced climate change and air pollution have amounted to $240 billion each year. Erratic weather closes facilities, delays production, disrupts distribution chains, raises operation costs, and reduces demand, according to the Center for Climate and Energy Solutions.
In addition to presenting a monetary dilemma, climate change is also a social responsibility issue. There is evidence that climate change exacerbates inequalities, disproportionately impacting the poor, and the World Bank anticipates it will push an additional 100 million people into poverty by 2030.
In 2018, the statistics tell a clear story that whether a low income individual or a wealthy corporation, no one is immune to the costs of climate change.
The good news is that research shows multinational corporations can be leading change agents in this fight against human-induced global warming. While there is no single intervention that will deliver a complete solution, here are three ways to get started.
Optimize the Supply Chain
Manufacturing puts an enormous strain on the climate. In the U.S. alone, the EPA finds that 21 percent of greenhouse gas emissions come from the direct (onsite) and indirect (offsite, but affiliated with the facility’s use of energy) emissions generated from the production of our everyday goods and materials. What’s more, 27 percent of emissions come from transportation, which means the production and movement of manufactured goods accounts for a huge amount of annual emissions.
Adopting green supply chain management (GSCM) practices—integrating environmental thinking into supply chain management—can help manufacturing companies reduce their environmental impact. GSCM can mean anything from the use of environmentally-friendly materials and equipment to stricter environmental audits. In fact, research shows that GSCM enhances environmental as well as operational performance in practicing companies.
Nike, for example, has made important strides in its public goal to “double the business with half the impact” by altering its GSCM practices. Since most of Nike’s emissions are released in the material processing and manufacturing phases, the footwear company made the strategic decision to have fewer and more efficient factories. And, recognizing that 60 percent of environmental impact at Nike comes from the materials used in its shoes, Nike developed a Materials Sustainability Index (NMSI) to help Nike designers and others in the apparel industry consider more environmentally-friendly materials for their designs.
The Flyknit shoe—which relied on the NMSI—was engineered to cut 60 percent of the material used in typical shoe wear. From 2012 to 2016, the design reduced over 3.5 million pounds of waste. It has also generated upwards of $1 billion in revenue each year.
By 2016, the company cut energy use per unit 50 percent since 2008. And by 2025, it plans to use 100 percent renewable energy.
Rely on Big, Green Data
Data has become integral in reducing greenhouse emissions and protecting the environment. According to the World Bank, reliable data and information, coupled with emerging technologies, is one of the most crucial tools in tackling climate change.
Leading the charge in using big data to promote environmental awareness is BBVA; the financial institution was honored in 2017 by UN Global Pulse — a United Nations agency that supports the use of big data for the public good — for its work assessing the relationship between climate change and consumer spending patterns.
Working alongside data scientists from Yale, BBVA cross-referenced credit and debit card transactions in Spanish stores from 2014 and 2016 with atmospheric data from Earth Networks during that same time. Researchers found in inverse correlation between pollution and consumption: On days when ozone pollution was 10 percent worse than usual, consumer spending fell by $23 to $35 million USD. What’s more, the findings revealed that urban citizens’ spending habits were four times more affected by air pollution than rural citizens, providing city governments and companies with an economic incentive to address air pollution.
While there is much data that reveals the longterm impacts of climate change—air pollution affects 90 percent of the global pollution and causes seven million premature deaths each year, according to Yale researcher Dr. Angel Hsu—the consumer-spending report was effective in exposing the short-term effects of climate change on people’s everyday behavior.
Lean In to High-tech Housekeeping
The sun-powered Edge building in Amsterdam, designed for the consultancy firm Deloitte, is one of the world’s greenest offices. The building has 28,000 sensors to track movement, lighting levels, humidity, and temperature. These sensors help to optimize heating, electricity, air conditioning, and cleaning needs for the building. This minimizes the energy needs of the building, significantly cutting its environmental impact.
And, using AI and IoT technologies, the Edge building keeps getting smarter. As office workers interact with the building through a customized mobile app that lets employees personalize their environment, energy usage becomes more efficient with time.
The Edge building is an example of the way smarter buildings and sustainable offices can help companies not only increase their efficiency, but also significantly cut environmental impact. As renewable energy prices continue to drop and smart architecture that taps into emerging technologies becomes more accessible, offices around the world have an opportunity to become greener without a huge financial investment.
While climate change is thought to be one of the biggest threats in modern history, there’s evidence that companies are among those with the largest ability to reverse its damaging effects.