Industry News
December 7, 20238 min read

Unleashing the power of tech-driven decarbonisation

Unleashing the power of tech-driven decarbonisation — Photo by PricewaterhouseCoopers
Environment & Sustainability Property Technology

Legacy IT systems are often energy intensive and inefficient. They can also be complex to change, presenting significant delivery risk and disruption to the business, leaving many organisations hesitant to fully embrace digital transformation. But going digital isn’t just good for driving out inefficiencies and boosting productivity — it’s crucial for decarbonisation, too.

Digital solutions built on cloud platforms that use the latest technologies - and powered to a significant degree with renewable energy - can help organisations measure, track and reduce their carbon footprint. Furthermore, these platforms enable organisations to access the information needed to make purpose-driven changes across the value chain. The right data helps to tackle multiple issues at once, from immediate challenges around mandatory and voluntary disclosures through to cost reduction, supply chain resilience, and carbon reduction. It’s these insights that are enabling industrial businesses to build a competitive advantage by being armed with information that allows them to take both cost and carbon out.

Digital transformation unlocks sustainability benefits

For industrial businesses willing to move forward as leaders, digital transformation is already unlocking sustainability benefits. One third of manufacturers cite digital adoption as key to improving energy efficiency.

Performance data, including for sustainability, is no longer just a nice to have: three quarters of UK CEOs are increasing investment in digital technologies and data analysis. The manufacturing space where decisions have historically been made based on human observation and decades of ‘gut feel’ experience now generate a rich source of granular, and increasingly AI-generated, data on production line performance uncovering patterns and enabling truly intelligent data-driven decision making.

We’re seeing these technology shifts transform the way firms are operating: automating repetitive tasks to free up resources; enabling maintenance problems to be detected quickly or ahead of them arising; and providing real-time insights into everything from inventory and equipment effectiveness to energy consumption and carbon reduction. Beyond industrials, this is a trend that we are also seeing in the legal sector with 71% of Top 100 firms viewing the speed of technological changes as a risk to growth in the medium term. However, the longer term benefits of embracing innovative technology are clear as 69% of these firms believe GenAI will have a positive impact on both revenues and sustainability.

Shifting to the cloud accelerates productivity and decarbonisation

As well as helping further the decarbonisation agenda by providing insight to data, the choice of technology can also have implications for the carbon footprint. Many industrial firms are still running their own data centres, which is not only hugely energy intensive but also requires the careful selection of tech partners to avoid shifting the carbon and energy burden to another part of the value chain.

Deploying energy saving technologies like edge computing for IoT devices and shifting to cloud delivers measurable carbon savings alongside increased resilience. Cloud computing has a higher utilisation rate than on-premise servers, which often see hardware sitting idle when not in use. By comparison, cloud allows for scaling up or down based on needs and usage, making it a much more energy efficient alternative. In some cases, businesses can reduce energy use by nearly 80% when they run applications on the cloud instead of operating their data centres. This level of reduction is also made possible by the fact that all major hyperscalers have made commitments to power their data centres 100% by renewable energy - Google has committed to operating on 24/7 carbon-free energy by 2030, Microsoft is targeting 2030 to have 100 percent of their electricity consumption matched by zero carbon energy purchases 100 percent of the time, and AWS is on a path to powering all operations with 100% renewable energy by 2025.

Building the right partnerships not just with cloud providers, but also with other suppliers and service providers across the value chain can bring a surprising level of momentum to any organisation’s decarbonisation agenda and enable new and innovative collaborations. Igniting such collaboration conversations can also lead to entirely new types of partnerships and opportunities adding differentiating revenue streams, products and services.

However, with more interconnectivity between technologies it is critical that security design is front of mind in addition to efficiency, cost and carbon improvements. Including a cyber aspect in digital transformation enables an organisation to rapidly reduce risk by ensuring that cloud configuration is set up correctly and has the right level of resilience.

It’s about finding the balance between speed of change, the reason for that change and making sure it’s done in a secure way that doesn’t cause problems further down the line. Sean Sutton, Cyber Security Partner, PwC UK

An integrated people approach optimises tech use

The success of a digital transformation lies with the effective adoption and use of the technology from day one - with the people of the organisation making the day to day decisions and running operations. Technology not only supports the workforce, but also facilitates human ingenuity, creativity and insight at every level. Those who realise the greatest value are thinking big, implementing the right tech in the right places and putting change management front and centre in their digital transformation programmes.

For example, your organisation is seeking to improve its operational resilience by quickly reacting and mitigating different instances of supply chain disruption. By ensuring the supply chain team is properly trained and appreciate the value of the newly implemented digital twin technology they can choose to model numerous ‘what if’ scenarios when faced with ongoing issues such as the Suez Canal blockage. Being comfortable with the technology enables the individuals to make data driven and informed decisions across a multitude of aspects including sustainability and carbon impact not simply be constrained to the more traditional cost and time variations.

A cloud-enabled platform gives an organisation’s employees the ability to model the potential impact of changes or ‘what if’ scenarios, helping them to make informed decisions across a multitude of aspects including sustainability as well as more traditional cost and time variations. It creates an optimised environment that can provide insight into where automation can keep decarbonisation on track — for example, by identifying opportunities to eliminate waste and reduce energy loads.

Making it happen

Bring together the right people from the outset - include leaders from your finance, operations, technology, legal, tax, people and transformation functions - to align on a joint vision and formulate an action plan. These are the people who have oversight of the key focus areas in your business, and so are best positioned to help you in taking timely action.

Spark conversations with your partners, customers and suppliers about their carbon impact, understanding how that relates to your operations and identifying the steps you need to take. Whether that’s developing a set of shared sustainable business practices, co-innovation, or implementing preferential rates for lower carbon suppliers.

Ensure you’ve properly architected for cloud, so that your environments and platforms are as secure and efficient as possible. This will help when it comes time to deploy a technology that can track your sustainability metrics, such as the carbon impact of your products and processes.

Our advice is to start small with a specific use case and take a phased approach. Bring the right people into the conversation from the outset – ideally including a mix of C-Suite roles to enable decisive and timely action. And elevate the conversation beyond measurement to focus on the role data can play in problem solving. Rachael Hampton, Partner, PwC UK

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