The role of supply chains and ethics
I was astonished to read that Persefoni, a startup that is building an “ERP system for carbon data” has raised $9.7 million in a Series A funding round just six months after its launch. It’s a grand achievement and reflects the pressing need the world faces.
In the tech sector we are considered far from clean. In 2017, the energy consumption of bitcoin was estimated to be the equivalent to 30 terawatt hours (TWh) a year, the same as the whole of the Republic of Ireland. Now, as bitcoin rises in price and become more complex and energy intense to mine, it’s estimated it’s between 78TWh and 101TWh, or about the same as Norway.
Data centres are also big contributors. Recent predictions state that the energy consumption of data centres is set to account for 3.2 percent of the total worldwide carbon emissions by 2025 and they could consume around a fifth of global electricity. By 2040, storing digital data is set to create 14 percent of the world’s emissions, around the same proportion as the US does today.
Such is the urgency governments are taking swifter action. Indeed, this week UK Prime Minister Boris Johnson has announced plans to reduce emissions by 78% by 2035 compared to 1990 levels, almost 15 years earlier than previously planned.
What can be done in practical terms?
Activists say stopping the use of carbon fuels within the next ten years is one of the biggest things we can do. Finding ways to store carbon is also an essential, which is why so much emphasis is being placed on carbon neutrality.
What is it? Carbon neutrality means having a balance between emitting carbon and absorbing carbon from the atmosphere in carbon sinks – like the soil, forests and oceans. This means that the carbon oxide that’s removed from the atmosphere must be stored. In order to achieve net zero emissions, all worldwide greenhouse gas emissions will have to be counterbalanced by carbon storage or ‘sequestration’.
To provide some perspective, carbon sinks remove between 9.5 and 11 gigatonnes ( Gt) of carbon dioxide each year. But the annual global cardon dioxide emissions reached 38.0 Gt in 2019. It’s a stark reality and all the time forest fires burn and trees are logged we make matters worse.
It’s why carbon offsetting, whereby emissions in one sector are offset by reducing them somewhere else is becoming so important. And it’s why an ERP system for carbon calculations is so appetising to investors. Offsetting might be done through the use of renewable energy or using an emissions trading system.
As a result it’s becoming a supply chain imperative to know that you and the partners, and suppliers you work with are all taking action. We discuss our approach to carbon neutrality with clients and prospects far more frequently than ever before. In the past it was a nice to have, a tick on a long list of attributes and values we needed to meet. Now it’s a must have.
It’s clear then that to get this right, businesses need to change their business model in terms of how they work and who they work with. But more than this, it needs to be cultural too. Ethics plays a large part in identifying partners who are taking it seriously and do what they say they will – no matter how difficult or hard it is to do it. And it is hard – frankly the world would have cracked it by now if it was easy.
Change is happening: Even before the pandemic there was a will to change where and how people worked, even if the way to change wasn’t clear. The images of smog over cities clearing as lockdowns came in were quite a wake-up call.
Public conscience is moving the agenda on and governments and companies have been forced to re-evaluate how business is done. Sustainability is now a board room imperative and when linked with values and purpose can bring big benefit to commercial outcomes.
We’ve seen it ourselves at Voodoo. When you invest in a strategy for the long term it pays dividends, you attract like-minded companies and you can achieve things together. We can also learn from one another. Companies are far more interested in what we are doing and have done to not only be carbon neutral but carbon negative, whether they want to work with us or not.
Our approach in the last eight years hasn’t changed. We said from day one we would make choices that were sustainable. It’s about ethics before profit and it’s about building a team that want to know that they are contributing positively to the world around them, not just to delivering the best client outcomes. It hasn’t been easy, but it’s become easier the more technology, research and demand there has been to find solutions.
If you are just starting out on your journey, then take heart. It’s a good first step to be thinking about it. We know from our experience you will be able to make a faster start than we did. You can learn from others, you can adopt best practices that will make a difference, and above all you will find it much easier to transform your supply chain.
Can we help? If your supply chain needs a technology partner that understands carbon neutrality and will help you drive change then speak to us. We’d love to share ideas, learn and contribute to your success.