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Digital technologies are crucial to comprehensive emissions measurement and reduction, says a new survey by Boston Consulting Group (BCG) and sustainability data platform CO2 AI.
The survey encapsulated 1850 executives across 23 countries and 18 industries that account for 40% of global emissions. Respondents (39%) rated technology adoption as a key enabler for emissions reduction, while 30% noted that they plan on utilizing AI tools for various functions in the coming three years.
The study also found that companies are 2.5 times more likely to measure emissions and reduction if they use technology. Moreover, 40% of those surveyed estimated an added annual financial benefit of at least $100 million for meeting emissions reduction targets, 3% higher than what was recorded in the 2022 survey.
“Companies will move if they see a positive business case,” said Charlotte Degot, Founder and CEO of CO2 AI.
Additionally, companies’ progress in meeting their emission reduction targets has dropped to 14% this year from 17% in 2022.
Meanwhile, BCG and the World Economic Forum research unveiled that emissions have increased by 1.5% per annum, with an urgent need for the number to be reduced by 7% annually until 2030 per the Paris Climate Agreement of limiting global warming to 1.5 degrees Celsius.
“We are not seeing the bend of the curve. We are going in the wrong direction”, said Hubertus Meinecke, Managing Director and Senior Partner, BCG Global Leader, Climate and Sustainability practice.
“The number of client disasters over the past decades has quadrupled from 800 to roughly 3300 per decade, four times as high as before, and climate disasters cost $1.8 trillion last decade,” he added.
According to Diana Dimitrova, Managing Director and Partner, BCG X Climate and sustainability expert on data and digital solutions, Africa and the Middle East have shown improvement in measuring emissions and are close to the global average.
According to the survey, companies that have successfully met their emissions reduction targets follow four practices — collaborate with their supply chain, calculate product carbon footprints for their portfolio, have fully automated emissions management processes, and consider emissions reporting regulations to be a key enabler of reduction.
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