Climate data: A competitive differentiator for IT firms
Is your company curious about how to add climate related use cases, while keeping flexibility high and costs low?
Demand is on the rise for high quality carbon data and insights.
Fuelled in part by consumer desire for low-carbon goods and services, growing demand is also driven by new regulation. In the EU, large corporations and listed companies are required to account for direct and indirect emissions (Scope 3) starting in the financial year 2024 (with reporting starting in 2025).
There are several implications, including:
- Large companies in the EU must set up procedures and systems to account for and report on indirect emissions, such as purchased goods and services and employee travel, and
- Service providers and suppliers of goods to large organisations should prepare to furnish emissions and/or life cycle data.
In this context, IT companies are well positioned to add value to their products and thereby boost competitiveness. For example, ERP and travel solution providers sit on a trove of data related to purchasing, invoicing, employee travel and the like. When managed smartly - and enriched for example with a climate API service like Ducky’s - these data become actionable carbon information and insights that contribute business value.
There are many potential use cases to consider. Enhancing and streamlining carbon accounting and reporting is clearly a major one. Additional use cases include increasing transparency of climate "hotspots" and risks, educating employees about the climate implications of business activities, and even “nudging” and rewarding employers/customers for low-carbon behaviours.
How IT companies position themselves for success? Let’s walk through an example to illuminate the potential.
Employee travel - tracking & reducing CO2e
Employee travel can constitute a significant portion of indirect emissions (Scope 3), especially for service organisations. Managing and tracking emissions associated with travel activities, in an accurate and timely manner, is not an easy task especially for global companies.
Often, it is a time consuming and labor intensive task. If a firm employs external consultants/providers, this adds cost and can increase complexity in the form of managing another touch point and system. Further, most carbon accounting services don’t provide direct and timely feedback that can lead to climate-friendlier behaviours. This is where IT companies can create new value. How?
Let’s take the example of a travel expense product. One enhancement is to add functionality that converts transactional data, i.e., monetary expenses associated with the planned or paid for trip, to carbon footprints. When implemented well, an employee would receive a “climate receipt” during trip planning or immediately after a trip. A helpful receipt would not only show the carbon footprint figure associated with the trip, it would also provide:
- Context - to help employees understand what the footprint means e.g., number of trees planted,
- The main factors driving the emissions e.g., flight, and
- Tips to reduce emissions the next time.
If IT providers have activity data the service could support additional use cases. Activity data, for example transport modes used and distances travelled (point A to point B), allows businesses to track travel footprints with more consistency and accuracy than transaction data, which are subject to fluctuating prices and exchange rates.
Activity data enables benchmarking, climate nudging, and even gamification! For example, if an employee travels a regular route, the service could inform an optimised travel plan or route and indicate how much CO2e that would save (or avoid). The IT or client company or both could even provide rewards or incentives for users who make the lowest-carbon choice.
APIs as enabling tools
Climate APIs, such as Ducky’s Climate API service, are a great option for IT companies to consider. A good climate API service will provide:
- Rigorous, up-to-date, and high-quality climate data backed by the best available LCAs and standards,
- User context i.e., translation of CO2e figures into something relevant,
- Comparisons between options/choices in different sectors/areas e.g., transport, energy, food, etc,
- Transparency surrounding assumptions and methodology,
- A streamlined API implementation build on best practice.
Is your company curious about how to add climate related use cases, while keeping flexibility high and costs low? Please reach out to Ducky to explore how we can help position your company for success in the evolving market environment!