With world leaders and business executives currently descending on Sharm El Sheikh, Egypt, for the 27th United Nations Climate Change Conference (COP27), organizations are under pressure to ensure that their sustainability initiatives are not only in place, but are delivering results.
Whilst governments, CEOs and boards are mostly in agreement that it is imperative to achieve Net Zero carbon emissions by 2050 to avoid a total climate disaster, the reality is that for large, complex organizations this isn’t an easy agenda. Sustainability targets at a top level are simple enough to outline, but enabling decision makers at every level across a company to help ensure carbon emissions are reduced is another matter.
Process mining vendor Celonis believes it can play a critical role in this. At its annual user event, Celosphere, in Munich this week the company announced new sustainability apps for procurement and supply chain to help organizations do exactly that - use data to make better sustainability decisions.
The thinking is that if customers have better insight into the impact of their processes on the environment, and this data can be surfaced to users across the organization, then better decisions can be made day-to-day about how a company operates. Small changes at scale can make a big difference over the long term.
Speaking at the event, Janina Bauer, Global Director of Sustainability at Celonis explained the challenge at hand. She said:
We have been asking all of our customers and we have seen that all of them are setting increasingly ambitious sustainability goals. Sounds like a great message to the planet. But if we look at the data, only one out of two companies are actually effective against their sustainability goals. And less than four out of 10 achieve their social and governance goals.
If companies don’t achieve their sustainability goals, that’s obviously hurting the planet, but they also don’t get the potential value out of successful sustainability initiatives.
And why is that? Why is it so hard to operationalise a sustainability strategy? To go from vision to action? One word: complexity. It’s not just the standards and definitions and the subject itself. But because of the processes that determine the operations of a company that aims to be sustainable, they run across a variety of systems being error prone and non-transparent.
Bauer said that teams across the organization have competing initiatives and without the right data, it’s very difficult to get alignment and buy-in behind the necessary priorities. Data is scattered and is often only consolidated and collected in a manual, fragmented way, she added.
The supply chain is often a critical focus for a company when it comes to sustainability efforts, as it incorporates a large element of any organization’s carbon emissions. From production to shipping, the carbon footprint is often hard to understand and measure. Bauer said:
You simply can’t see what’s going on in your supply chain. You don’t understand the why, where and how. Lastly, and most importantly, driving and prioritizing the next best targeted action seems impossible. Right now we have the urgent need to cut costs, save time and improve our sustainability performance - and all of that at the same time.
And Celonis believes that its process mining technology, using its Execution Management System (EMS), can provide the help and guidance organizations need. She said:
That’s where Celonis comes in. You already know that the EMS transforms processes across the value chain and helps companies be better at the top and bottom line. And now customers can use EMS to reveal, reduce and prevent emissions - and eliminate inefficiencies and inequalities from business processes. All with the same gradual visibility and built in capabilities to take action.
By transforming your processes, everyone in your organization can be a champion for sustainability transformation. By embedding sustainability in your day to day work, all your business teams have the chance to contribute to sustainability goals. That’s because Celonis provides them with visibility, productivity and intelligence to accelerate meeting their goals.
Celonis is working with an ecosystem of sustainability partners to launch a series of new apps that tackle the challenges outlined above. It says that its objectives are to:
Align people around the right priorities in a data-driven way
Consolidate data together across systems and sources and reduce the manual effort to do so
Drive targeted and prioritized action against the biggest opportunities for impact
First up, Celonis is launching a new Shipping Emissions Reduction App, which has been developed in partnership with Climatiq, an embedded carbon intelligence solution, as well as with Celonis customers - including BSH Home Appliances, Delphi Technologies and the LEGO Group.
The app integrates the Climatiq Carbon Calculation Engine with the Celonis Execution Management System (EMS), to enable companies to calculate emissions from their shipments in real-time with industry-approved reporting standards. It also aims to automate carbon emissions reporting by using shipment data in an organization’s IT system.
The end goal is for customers to identify where in their logistics they have the highest carbon-saving potential and pinpoint the exact actions required to remove those emissions.
Speaking at the event was also Hessam Lavi, founder and CEO of Climatiq, who explained why companies need to automate their carbon emissions reporting. He said:
The core thing we do is that we allow companies to integrate carbon emissions into their existing tools and processes, instead of having to use another third party service. Our carbon calculation engine uses scientific data to connect to operational data and enrich that data with carbon emission metrics so that they can make decisions.
What we’ve seen is that carbon has emerged as a new business metric, similar to price, delivery and quality. Businesses need to actively measure and manage it. We think that the best way to do this is to break down silos and have it embedded into the tools that you already use, instead of having to go and purchase new software.
And because embedding it allows you to recalculate your emission data, it allows you to get an overview of all your emission data and help you create reports. But also it allows you to ‘bottom up’ this decision making that comes from many different contexts within your business, not just shipping, but all the activities a business has.
Lavi also highlighted why the partnership with Celonis is significant. He said:
We really think it’s the large complex companies that have the biggest needs. So we really need to automate this to get an understanding, so that they can have the biggest impact. With Celonis they’re combining the deep understanding of processes and the root causes of operations that cause emissions.
And then using that fantastic data that’s already there, layering it with our technology, they can convert that data into the emission calculations that they need - and then bring it back into Celonis for somebody to use and make decisions.
Sustainable spend management
In addition to the Shipping Emissions Reduction App, Celonis has also announced a collaboration with Ecovadis, a sustainability ratings platform, and IntegrityNext, a cloud-based supply chain monitoring and ESG risk management system, to launch a Sustainable Spend Management App. Currently available in beta, there are two versions - one specifically for EcoVadis and the other specifically for IntegrityNext.
The version of the app designed for IntegrityNext integrates with its monitoring system allowing companies to track compliance with international sustainability standards and regulations in the supply chain. Malpractice and reputational risks from suppliers are automatically flagged and measures can be directly triggered and documented for improvement.
Celonis said that the IntegrityNext platform integrated into the EMS will help procurement organizations monitor and improve supplier sustainability, increase sustainability transparency and mitigate third-party ESG risks.
Whereas, the Celonis and Ecovadis technology partnership integrates sustainability scorecards of suppliers into the Celonis EMS, as well as new ratings that may be requested using Celonis automation capabilities.
The aim of the new app is to enable companies to automatically remove spend associated with high-risk suppliers, and prioritize highly-rated suppliers. This should provide procurement teams with a single source to view, prioritize and manage supplier sustainability.
The sustainability session at the Celonis event was packed and the audience had a lot of questions, indicating that there is appetite for solutions to their ESG challenges. And the demonstrations at the sessions proved helpful to show how companies can quickly make on the fly decisions, thanks to their operational data, about how to reduce their carbon footprint. This will obviously require an element of change management too and authority given to make decisions that perhaps wouldn’t have been made in the past. For instance, a shipment that has 95% less carbon emissions but takes three days longer would maybe be acceptable in this scenario. But what’s key is that these decisions need to happen at scale for a difference to be made - and understanding process is a key part of that.