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Towards the Future: The Role of Artificial Intelligence in Corporate Sustainability
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Sustainability has become a central concern for companies around the world. In this context, Artificial Intelligence (AI) has emerged as a powerful tool to drive sustainable business practices. In this article, we will explore how AI contributes to the achievement of companies' ESG (Environmental, Social and Governance) objectives, focusing in particular on its role in managing business assets to measure and reduce energy consumption.
According to PwC's Net Zero Economy Index 2023 study, by 2050 the world should achieve a challenging decarbonization rate of 17.2% (each year) in order to meet the Paris Agreement's goal of not increasing the planet's temperature above 1.5ºC and thus avoid worsening the effects of climate change.
In 2022, the decarbonization rate was only 2.5%, which means that the rate needs to increase 7 times to reach the target.
Carbon intensity refers to the amount of grams of carbon dioxide (CO2) that are released to produce one kilowatt hour (kWh) of electricity. It is a measure used to assess the environmental impact of a particular operation or product. For example, electricity generated using fossil fuels is more carbon-intensive because the process by which it is generated creates CO2 emissions. Renewable energy sources, such as wind, hydroelectric or solar, produce virtually no CO2 emissions, so their carbon intensity value is much lower and often zero.
These figures are yet another reminder of the urgent need to act quickly.
The business world is one of the fundamental pillars driving this change, by introducing revolutionary innovations into its operations that help accelerate the reduction of emissions.
There are a number of measures that companies can take to help reduce the production of greenhouse gases and consequently mitigate climate change.
Some of them are:
As the world faces increasingly urgent environmental challenges, corporate sustainability has become an essential priority for organizations in all sectors. In this context, Artificial Intelligence (AI) has emerged as a powerful tool to drive sustainable business practices and is at the root of significant transformations, profoundly changing industries and influencing the way the world economy functions.
The power of these developments is such that, according to the Boston Consulting Group (BCG), "By expanding currently proven applications and technologies, Artificial Intelligence (AI) has the potential to unlock insights that could help cut 5% to 10% of global greenhouse gas emissions by 2030 (...)."
And according to the same study, 87% of business leaders believe that AI can play a key role in climate action, especially by helping to measure and reduce emissions.
Companies are expected not only to set ambitious sustainability goals, but also to implement them. However, such implementation requires credible data.
Indeed, many business managers recognize the need for robust data to track their company's progress towards ESG (Environmental, Social, Governance) goals and to bridge the gap between strategy and real impact.
In reality, most of the data already exists and, in many cases, in abundance. This is data from facilities management, energy consumption, asset maintenance, infrastructure, etc.
However, the task of collecting and interpreting large volumes of data scattered across different departments is sometimes a real puzzle. To meet this challenge, companies are turning to technology to collect and consolidate this information, thus obtaining transparent and auditable data.
This is where AI, and other similar technologies such as Deep Learning (DL) or Machine Learning (ML), come in. They currently play a key role in promoting corporate sustainability by promoting more efficient management of corporate assets and reducing unnecessary consumption, transforming data into predictive information and identifying priority areas for improvement. In this way, it benefits the environment, but also the operational efficiency and competitiveness of companies.
As we have seen, AI plays a crucial role in identifying opportunities for improvement and making more informed decisions in companies.
More specifically, here's how AI can contribute to better management of companies' physical assets :
It allows large volumes of data to be analyzed in real time, identifying patterns and opportunities for optimization. In corporate asset management, this means identifying areas of waste and inefficiency in order to reduce unnecessary consumption. For example, by reading and analyzing operational documentation guarantees the analysis of billing documents related to energy consumption, making it possible to extract relevant information for sustainability and energy management data repositories.
AI algorithms can predict consumption patterns, trends and future needs, ensuring more effective resource planning and a reduction in waste. For example, in energy managementAI can analyze consumption patterns, identify energy efficiency opportunities and predict future demand. Similarly, in waste managementAI can optimize recycling processes and reduce waste by analyzing production and consumption data.
It makes it possible to detect anomalous data and emission patterns, contributing to effective, real-time alarm management. In addition, based on Machine Learning (ML) technologies, the systems can learn and improve continuously.
It allows for the identification of patterns in internal processes that affect energy consumption, waste production and GHG emissions. This information is essential for informed decision-making in line with sustainability objectives.
It provides a faster response to regulatory and legal requirements, as well as serving as a benchmark between private entities. This is crucial for commercial agreements and access to better financing conditions.
AI makes it possible to implement preventive maintenance systems, which identify potential operational anomalies before they occur and potential defects in equipment. This not only reduces repair costs, but also avoids unplanned downtime, extends the life cycle of assets and reduces their environmental impact, contributing to operational efficiency and reducing resource consumption.
On the other hand, it can also help to create transparent, traceable and decarbonized value chains, because nowadays it is essential to trace products back to their origin, ensuring that they have been produced ethically and sustainably. Consumers are increasingly demanding and expect total transparency, from production to the final product.
Using AI techniques, companies can analyze the environmental impact of their operations in real time. This allows for more informed decision-making, identifying areas for improvement and implementing corrective measures.
AI is transforming corporate sustainability by offering innovative solutions to tackle environmental challenges. By using AI effectively, companies can not only reduce their environmental impact, but also improve their operational efficiency and competitiveness in the global market .
Transform the future of your company with AI and boost the sustainability of your business! Find out how now.
Margarida Soares
Sustainability Business Developer, Nextbitt
