How many emails do you receive or send in a day? A long list of unnoticed daily digital activities adds up to a big impact on the environment in the form of carbon footprint. A single brief email causes the atmosphere to gain roughly four grammes (0.14 ounces) of CO2 equivalent (gCO2e). Sending emails with attachments on the other hand will release about 50 gCO2e into the atmosphere. Every spam emails (even unopened) has an effect of 0.3 gCO2e. This is why sustainability is of an utmost importance to anyone in or related to technology industry.
The term sustainability has evolved over the past few decades. It is not just about someone launching products with reused materials and services with low carbon emissions. Sustainability is a process and a constantly changing race. SAS has changed the concept of sustainability with the involvement of AI and analytics to better business operations. Being branded as “green” provided businesses with a competitive edge decades ago. With its impact on the environment, society, and economy, the strategy has become increasingly complicated.
“Sustainable business operations in today’s definitions extend beyond the typical technical and financial excellence to consider the environmental, social, and governance (ESG) factors and initiatives as key pillars for maintaining the future,” said Youssef. He further added that increasing regulatory scrutiny and awareness are additional catalysts for acting on ESG initiatives. “There is a particular focus on financial institutions, as regulators require stress testing to assess banks’ climate-risk preparedness and are encouraging banks to set a ‘green asset ratio’. ESG regulation is impacting future bank portfolios which will have rules on which companies can have easier access to funds.”
He also elaborated on how social initiatives are closely looked at. Consumers are paying more attention to how businesses treat their workers, suppliers, customers, and the community at large, and this will have an increasing influence on enterprises. “Companies should see this as an opportunity, as it was proven that those that invest more in ESG initiatives, disclose more ESG data, and adopt more sustainable business practices are likely to perform better,” he said.
According to the report from NYU Stern, there is a positive relationship between ESG and financial performance for 58 percent of the “corporate” studies focused on operational metrics such as Return on Equity (ROE), Return on Asset (ROA), or stock price.
Business sustainability demands collaboration and innovation. All stakeholders must move quickly to implement sustainability-centric thinking across the firm in order to achieve this goal. The potential of AI and sophisticated data analytics will assist firms in meeting ESG compliance requirements and help decrease carbon footprints, waste, and pollution, even though the path to a sustainable future may appear a little hazy.
Sustainable business practices are rising to the top of organisation’s priorities even as the use of data analytics and AI has become the cornerstone of business strategies for firms to attain profitability and new growth prospects.
The impact of AI and analytics in sustainability was proved by SAS earlier this year when they partnered with International Institute of Applied Systems Analysis (IIASA) to combat illegal human-driven deforestation in the Amazon Rainforest. This project used the power of humans and AI to detect deforestation from thousands of satellite images. SAS partnered with The Amazon Conservancy Association on a data-for-good project to analyse forest fires in the region and better understand drivers of forest fires – even predicting future behaviors.
“AI and analytics technologies help organisations derive insights from the data sets they have, and build ESG assessments that are convenient, auditable, and integrated with the organisation decisioning process. Organisations are using analytics to build a comprehensive view of sustainability targets, status, ongoing initiatives, current carbon footprint, the performance of suppliers, etc.” said Youssef.
AI-based stress testing techniques are widely used by organisations to perform financial stress testing and scenario simulations. Companies are trying to extend this simulation to integrate the impact of climate and reputation risk drivers into their financial risk models and derive scenarios for potential losses impacted by environmental or reputation risks.
By creating ESG Centers of Excellence, SAS is building the framework, sufficient capabilities, and platform that will enable organisations to meet and develop their sustainability initiatives. The company is also actively contributing to a more sustainable future through the analytic volunteerism initiatives centered around Data4Good, sustainability, data ethics, and education.
“We are passionate about innovating and collaborating with our network of business, government, and university affiliates to deliver the solutions, insights, and decisions that protect our environment, save lives, and create a safer future for everyone,” said Youssef.
