Earlier this year, some of the world’s leading voices on sustainability came together in London for the Climate Innovation Forum. The event brought together policy makers, investors, solution providers, and business leaders to help turbocharge the transition to net zero emissions.
Elena Avesani, Head of Global Sustainability Strategy at Oracle attended the event and spoke on a panel about the transition to net zero supply chains and how systemic innovation can benefit the bottom line and the planet. Below are some of her key takeaways from the event.
Jon: What are some of the highlights from the 2023 Climate Innovation Forum?
Elena: Firstly, there was a strong commitment from the UK Government on implementing technology innovation to achieve its climate targets. They did a good job of bringing together the private and public sector in an effective way that drives initiatives, commitment, and collaboration.
The other highlight was the presentation from the CEO of AstraZeneca, who explained how the climate crisis is also a health crisis because of increased air pollution from fossil fuels. This crisis is driving the pharmaceutical industry (which contributes eight percent of global carbon emissions) to target decarbonizing their operations by 2035. As the pharmaceutical industry works towards this goal, it will certainly help the global healthcare industry (the world’s largest industry) move in a similar direction.
The event and the sessions continue to emphasize the importance of supply chain optimization and measurement in helping to reduce carbon emissions.
Jon: What are some of the challenges organizations face when decarbonizing their supply chains?
Elena: Organizations want to move away from spreadsheets for managing risk related to environmental and social issues, which creates inaccuracies and delays in properly understanding impact.
There is a drive to have ESG metrics baked into the DNA of organizations’ IT systems to ensure visibility of supplier and environmental risk. For example, if your business is dependent on water, and you have two suppliers. One has a fantastic Water Assessment Program, the other doesn’t. This level of detail can be lost in the complexity of a spreadsheet, which could result in a failure to cite the risk one of your suppliers pose on financial statements.
There is the need for industry players to approach sustainability from a pre-competitive perspective to enable the collective power of an industry to drive supply chain improvement. For example, we are part of the Responsible Business Alliance, which is helping the electronics supply chain to drive standards for factory conditions and human rights, as well as energy efficiency.
There is huge benefit to looking at systemic industry issues in collaboration with other key players in the industry. Ultimately, we all benefit from a supply chain that is responsible, efficient, and clean and it will take collective effort to accelerate these changes.
Jon: What are some actionable next steps organizations can take to decarbonize their supply chains?
Elena: The first thing that organizations can do is talk to their technology implementation partners to better understand how they can start embedding ESG metrics into the systems that run their business. Often the solution to tracking these metrics is a simple configuration within applications. For example, Oracle recently announced ESG configuration guides for Oracle Fusion Applications to help customers track environmental data, calculate greenhouse gas emissions, and capture the environmental attributes of products.
While many companies are waiting for U.S. Securities and Exchange Commission (SEC) to determine new ESG reporting requirements, other organizations are already implementing this kind of environmental reporting. For example, a $40 billion insurance company is already tracking and reporting Greenhouse Gas (GHG) Protocol Scope 1 and 2 emissions in tons of carbon dioxide equivalent (tCO2e) as well as upstream and downstream (GHG Protocol Scope 3) emissions.
Finally, organizations should share feedback with their technology vendor and let them know the features and the reports they need. We need customer feedback to help improve ESG reporting for organizations across all industries, so we’re looking for design partners. Many of our new features come from suggestions that our customers share on Oracle Cloud Customer Connect, which is our online community for customers and partners.
With ESG metrics embedded in business software, increased collaboration with industry groups, and on-going dialogue with implementation partners and technology vendors, decarbonizing supply chains and ESG reporting will only become more automated, accurate, and insightful over the coming years.
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