Sustainable strategy in focus: leveraging data to reduce environmental footprint

Constant progress in data-driven policy-making moved the emphasis from reactive responses to natural disasters toward more analysis of environmental dynamics.

Environmental data measurement and analysis are essential, as the results highlight where companies can act to improve their operations.

Also, by monitoring environmental data at regular intervals, they can compare and analyze changes.?

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The environmental footprint is an emerging set of notions; the label “footprint” comes from the notion of the mark made on the surface. Europe has recently defined a standard methodology, and the European Commission adopted a revised Recommendation on the use of Environmental Footprint methods in 2021.

The Environmental Footprint methods measure and communicate the environmental performance of products and organizations across their whole lifecycle. They cover 16 environmental impacts, including climate change and impacts related to water, air, resources, land use, and toxicity.

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From a company's perspective, there is significant potential in reducing the environmental footprint all along the value chain: in research and development, procurement, production, distribution, consumption, and/or disposal.

Procurement principles could be changed, and procedures could be primarily for reuse; the chemicals used could be changed to eco-chemicals, and labeled waste such as food, paper, plastic, and metals could be systematically recycled.

Electrolux Group, one of the most prominent household appliance companies in the world, developed a value chain perspective on sustainability (see Figure 1) that helps identify potential, minimize or enhance impacts, and understand boundaries.

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Data analysis followed by innovation helps businesses optimize their use of resources, and there is significant potential, especially for the resources that are intensively used, such as water. According to WWF, water scarcity around the world is an increasing issue, with a total of 2.7 billion people finding water scarce for at least one month of the year.

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Here are two examples from Electrolux Group that highlight the potential of new technologies which can help reduce environmental impact: unique washing machine compartments to ensure that every type of detergent properly dissolves for short washes, and power jet technologies that combine water recirculation with reduced mechanical agitation to save up to 50 liters of water per cycle

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As pressure on environmental objectives increases, companies that realize benefits while meeting sustainable goals are at an advantage since corporate Environmental, Social, and Governance (ESG) disclosures will become mandatory given new governmental efforts in the European Union, UK, and US, per the World Economic Forum. This will translate into the integration of ESG reporting with a company’s financial reporting.?

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A systemic perspective is needed to support decisions that have effects on the environmental, social, and economic spheres in which the concept of sustainability is articulated as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs,” according to the World Commission on Environment and Development.

This is a holistic approach from a data perspective as well, as it brings together various types of data. Strong data collection, environmental data analysis, and data management capabilities play a key role in ensuring a successful implementation.

The New York University Stern Center for Sustainable Business states that these types of initiatives will drive financial performance due to factors such as improved risk management, increased innovation, and enhanced reputation and relations with clients, employees, and investors.

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This article is based on the original content authored by Liana Paraschiv, published by The KPI Institute, and has been adapted for the purpose of this publication.?

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