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SAP Finds Savings of $33T, 7.6 Gigatons of Carbon in Digital Business

Six industries could enjoy massive savings and emissions cuts by digitizing their business processes and applying data to monitor resource use. According to SAP, Europe’s largest software company, each of the identified industries could cut at least half a gigaton of carbon emissions by making such changes, and together, they could help save around $33 trillion worth of resources and reduce greenhouse gas (GHG) emissions by 7.6 gigatons by 2030. In order of highest potential emissions cuts, the six industries SAP identified are: utilities (2.2 gigatons); agriculture and food production (1.6 gigatons); transportation and logistics (1.5 gigatons); construction (1.1 gigatons); manufacturing (0.7 gigatons); and retail and consumer production (0.5 gigatons).

By Hannah Furlong | Published 8 years ago | About a 3 minute read

Six industries could enjoy massive savings and emissions cuts by digitizing their business processes and applying data to monitor resource use. According to SAP, Europe’s largest software company, each of the identified industries could cut at least half a gigaton of carbon emissions by making such changes, and together, they could help save around $33 trillion worth of resources and reduce greenhouse gas (GHG) emissions by 7.6 gigatons by 2030.

In order of highest potential emissions cuts, the six industries SAP identified are: utilities (2.2 gigatons); agriculture and food production (1.6 gigatons); transportation and logistics (1.5 gigatons); construction (1.1 gigatons); manufacturing (0.7 gigatons); and retail and consumer production (0.5 gigatons).

In a recent report, the Global e-Sustainability Initiative (GeSI), a global advocate for the use of technology to drive a sustainable future, claimed that digital solutions could cut 12.1 gigatons of carbon dioxide equivalent (CO₂e) from global emissions per year in 2030, holding emissions at today’s levels. The six industries identified by SAP would account for 63 percent of this reduction if they were to adopt the measures proposed by the firm.

SAP estimated the emissions reductions and savings by considering a subset of companies in the six industries that are currently using business software such as enterprise resource planning, data analytics, supply chain, logistics, production planning, resource optimization, and remote access, and analyzing how these might be applied in their industries worldwide. SAP offers recommendations for each of the six industries, as follows:

Utilities: Adopt integrated systems to bring more visibility to energy usage and highlight ways to both conserve conventional sources and to use more renewables. Initiatives include smart grid, smart metering, and expanded automation in power plants.
Agriculture and Food Production: Optimize yields and resource use by running simulations on weather, soil, seed, fertilizer, crop specifications and other data. Use asset management systems for farm equipment, livestock and crops to increase operational efficiencies.
Transportation and Logistics: Optimize ship routes, airline flight paths and vehicle movement with real-time traffic management and smart routing. Systems that enable ridesharing can also reduce the number of vehicles on the road to reduce emissions.
Construction: Use information technology to optimize processes for sourcing and delivering materials and assembling them during construction. Building management and environmental control systems can reduce energy consumption and resource usage in facility maintenance and operation.
Manufacturing: Apply data analytics for automation and resource management to make more efficient use of plant facilities, raw materials and energy sources. Internet of Things (IoT) initiatives, reconfiguring manufacturing processes to change outputs as needed, and working with supply chain partners to share machines and other assets such as trucks and cranes can also enhance resource use.
Retail and Consumer Production: Share available inventory and fixed assets across supply chain partners to reduce the amount of inventory needed on hand and lessen carbon consumption. Use data analytics to identify how to use less material in packaging and highlight ways to reduce energy and water use in manufacturing. Optimize e-commerce systems to reduce carbon consumption related to consumer traffic.

“The idea of digitization is essentially taking some of these business processes and automating them…. And decisions can be made by systems that are hyper-connected, and business processes – without human intervention – can be a lot faster,” Steve Van Wyk, head of business analytics at SAP Asia Pacific Japan told Eco-Business in a recent interview.

Digitization on an aggregate level could reap even bigger rewards. In agriculture, for example, networks of agricultural businesses can collaborate with the broader ecosystem of seed and fertilizer producers, equipment manufacturers, commodity traders, and data brokers to drive higher yields at rates that sustain the supply of arable land and other resources. In energy, using sensors and other technologies to capture weather pattern data could help regions or countries better manage fickle solar and wind power generation. Singapore, for instance, is investing in solar to achieve its climate targets and is hoping to use such data for enhanced efficiency.