Sustainability is at the forefront of the supply chain functioning globally. With prominent industries lining up their scalability objectives – it becomes imperative for organizations to be mindful of their global carbon footprint. Conglomerates on a vast scale have noted the benefits of going carbon neutral not just by the metrics of finance but also from the point of view of brand value. With value chain management beginning to invest in decarbonization strategies, Sustainability Analytics has come to the fore to help enterprises make informed decisions by considering their environmental impact based on their operational data. Let's look at how an organization's historical statistics might be the key to its sustainable future.
Table of Contents
What is Sustainability Analytics?
Why is Sustainability Analytics Important?
Essential Components for Sustainability Analytics
Implementing Sustainability Analytics
Benefits of Sustainability Analytics
What is Sustainability Analytics?
Analytics, by definition, stands for computational insights derived from a systematic data analysis during a specific period. And when accounting for a company's environmental impact by keeping in its ecological, economic & social impact – it falls under the umbrella of analytics in sustainability. With carbon offsetting analytics, management can ideate the most optimal methods to reduce their operating cost & instill proactivity against supply risks while making end-to-end framework environmentally responsible.
Let's look at some of the crucial metrics directly impacted by analytics for sustainability.
Material Consumption: With informed insight, management gets to know the environmental impact the raw material might carry with its subsequent footprint covering its GHG emissions.
Product R&D: The conversation around climate change & a company's action towards it pushes the envelope to make every supply chain activity, from raw material procurement to delivering finished goods, more efficient & eco-friendlier.
Cost: Going green is a long-term strategy that requires total commitment but pays off in the subsequent run with sustainable actions being welcomed by the authority with tax benefits & compliance aid.
Risk Management: When informed of the derivative effect of traditional supply & demand practices, companies can course-correct their value chain activities to avert harmful impacts on the climate while applying sustainable working conditions for their workforce.
Sustainability Partnership: Being vocal & definitive about climate actions yields many opportunities for an enterprise to partner with organizations sharing the same thought process, opening up new avenues for climate-related action plans.
Why is Sustainability Analytics Important?
The path to decarbonization starts with sustainability analytics. An organization's operative data from procurement to production holds many answers for its long-term prospects, especially if it wants to align itself with an upgraded environmental brand value. Here are a few key pillars that make a case for analytics in sustainability.
For Stakeholders & Customers: Both investors & customers are two powerful entities carrying huge impetus on final decision-making. Customers want to be associated with a label that keeps the environment first & stakeholders would like to invest in an organization that carries the potential of being adaptive as & when required, more so when it comes to being proactive on climate impact.
Compliance: A business can only function to the fullest once it complies with regulations. It is, in simpler terms, one of the most crucial ground rules to put focus on.
Annual Sustainability Report: Computing CO2 footprint requires management to implement sustainability analytics to steer their value chain action toward greener pastures. With many countries' regulatory authorities requiring annual sustainability reports, organizations across the globe are now implementing carbon monitoring tools in their supply planning.
Being Proactive with Sustainability: A large-scale business must be smart enough to act first rather than react later. If anything, on the contrary, happens, it simply transpires into heavy losses incurred with regulatory penalties. With many conglomerates targeting to make their value chain process carbon neutral by 2050, companies have onboarded the notion of go-green principles by aligning their end-to-end operation with carbon monitoring KPIs.
What Are the Essential Components for Sustainability Analytics?
The core reasoning for any business operation is directly proportional to how well its data gets managed. The better the health of stats, the better the supply chain's potential to transition onto the path of greener & more efficient functioning. Here's a list of the essential building blocks of analytics.
1. Data Collection: House your relevant data from the key components of your value chain. From procurement to production to delivery, align all the essential vital pointers required to run analysis from a framework point of view.
2. Data Processing: The next step is vetting your facts & figure for subsequent analysis and data-led insights. This stage involves segregating not-so-useful specifics from those required for meaningful information, sidelining any potential errors which might ruin the calculation – redundancy or incomplete information.
3. Data Interpretation: Data interpretation involves analytics making sense of information by churning out informative crucial pointers that will subsequently help the end-to-end operations of the supply chain. This might cover prescriptive methods to improve sustainability metrics or suggest radical changes in how the value chain works to initiate green performance.
4. Evaluation: Post applying the suggested framework changes, management evaluates the impact new initiations have had on the overall working of the value chain. Such assessment helps determine shortcomings in day-to-day functioning, if any. This can also continue in helping companies identify the perfect roadmap to green supply chain benefits.
How Can We Implement Sustainability Analytics?
With the components for analytics in sustainability figured out, let's have a simple overview of how exactly an SCM applies the titular concept in practicality.
1. Know What You Need: Sustainability can be as broad a concept as you want it to be. A scalable prospect by nature, management needs to know their standing on what exactly they want to cover when focusing on offsetting their carbon footprint.
2. Identifying KPIs: Supply chain planners need to brainstorm what KPIs to cover when investing in decarbonization projects. An organization's goals are better laid out when crucial indicators are well thought out.
3. Data Management: A redux of the point mentioned under analytics components, data management, is the ground zero for any decarbonization project. Be it collecting essential information, vetting it, or figuring out valuable parameters.
4. Evaluation: With evaluation, insights are funneled to ensure progress on the go-green initiatives. Post figuring out your sustainability performance, the management works out a report highlighting their organization's performance in the context of the regulatory guidelines.
What Are the Benefits of Sustainability Analytics?
Analytics in sustainability can unlock many virtues for your organization's success. Expanding far beyond the metrics of finance (though important), commitment to decarbonization reflects the company's whole-hearted attempt to improve the world.
Minimizing Resource Deficit: Going green means opting to root out traditional supply chain practices, and that means reducing resource consumption, subsequently leading to your business being insulated from cost volatility. This also enables management to forecast raw material procurement better and be more adaptable to future consumption metrics of the customer base.
Edging out the competition: Going carbon neutral goes a long way in acquiring a new user base and retaining the current one. Such news does a whole world of good for an enterprise looking to scale up its business & collaborating with companies with similar goals.
Proactive Risk Management: With analytics at the crux, businesses can be well-equipped to handle possible supply bottlenecks, minimizing any cost impact while keeping themselves on the right track of revenue generation.
Ready to Begin Your Company's Sustainability Analytics Journey?
The need for sustainability has picked up momentum for all the right reasons. Businesses nowadays need all the intelligence to optimize their supply & demand operation, and intuitive tools have made their quest easy. 3SC, with its advanced decarbonization analytics platform CarbonX, enables organizations to fulfill their Sustainable Development Goals by monitoring GHG emissions across the value chain activities, helping companies attain their carbon-neutral goal & stay compliant with regulatory compliances. To know more about how 3SC's roadmap to decarbonization can help you, connect with us at https://3scsolution.com/contact-us.