How to maximize the use of data for better decision making around cutting CO2?

Answers to some of the world's most pressing questions might be locked into the world's ever-growing databases. Data and effective data systems are crucial to realizing the 2030 Agenda and the Sustainable Development Goals. Only in context with other data, it can enfold its whole value. The UN World Data Forum (UNWDF), plays an important role in supporting efforts to leverage the value of data to support better policy making and address pressing global challenges. A critical global challenge is managing climate change and cutting carbon emissions. Data through better discoverability, analysis and communication can help support climate action and equip governments and companies with the knowledge and capacity to design solutions to cut carbon emissions.

Thematic Area 2 of the UN World Data Forum 2023 covers efforts to improve digital literacy so that people can use data to improve their lives, ensuring decision makers are accountable. While recognizing that transferring, processing, and storing data can be a carbon challenge in itself, this blog shares insights on how data can be used to improve efforts to cut carbon emissions through digitizing supply chains.

Digital supply chains allow companies to be more innovative, efficient, resilient, and responsive to change. They also increase collaboration and data exchange across organizations and industries. Currently, much data is locked into isolated silos, which limits its use and value. This represents a challenge to innovation, inclusivity, decision making, as well as climate targets and economic development. Still, only by connecting different data points, data can turn into meaningful information.

From an economic perspective, data exchange across organizations and institutions is crucial to fostering innovation and more equal economic opportunities. Therefore, digitized value chains offer significant benefits to all parties involved, such as manufacturers gaining a better understanding of how their parts are used, or vendors looking to improve their products or services.

Data can help identify gaps and synergies between stakeholders and ecosystems. Data from various sources can be used to gain insights into the relationships between different actors in an ecosystem, identify areas for collaboration or coordination, and understand the impact of different stakeholders on the ecosystem, enabling us to develop more effective policies and strategies for sustainable development.

With new regulatory and corporate disclosure requirements aimed at reducing Green House Gas emissions, it is becoming increasingly important that companies know how much emissions they are emitting. For example, Scope 3 emission reporting is changing accounting as we know it. Emissions that are created at the beginning of the value chain are now becoming liabilities for companies at the end of the chain. This means that all companies along the value chain will need to increase collaboration and holistic thinking.

This poses a challenge since companies often work with many different suppliers throughout one single value chain. Effectively tracking emissions relies on companies sharing data, which can be perceived as sensitive. Balancing transparency while protecting business intelligence, brings up interesting data governance questions and highlights a real need for reliable models to facilitate and secure data transfers.

Regulatory obligations around emissions however offer the potential to become value creation opportunities. The need to digitize value chains around emissions offers the opportunity to increase data collaboration, while helping to identify areas for improvement in carbon emissions management. However, most firms consider data, such as Scope 3 emission data, as competitively relevant, as in some cases it could give hints into product compositions, profit margins, or the identification of supplier networks. Trust and ethics remain a main challenge in data collaboration. New cryptographic technologies, such as Secure Multi-Party Computation, Zero-Knowledge Proofs, and Homomorphic Encryption, can allow for data collaboration, e.g., as required for Scope 3 emission calculations, while protecting sensitive inputs, potentially turning data graveyards into value banks for all parties involved, including small and medium-sized enterprises. If scaled, these sorts of technologies could help support more inclusive, innovative, and sustainable business practices by improving access, trust, transparency, and oversight of carbon emissions. This would further enhance data discoverability, build data literacy, and enable data-informed decision-making across knowledge silos.

Businesses and societies need to leverage their collective wisdom, embodied in the ever-growing Datasphere, in order to improve their efficiency and cut emissions. Challenges also persist with regards to responsible exchange of data for digital tools and the digitization of renewable energies. Artificial Intelligence can be used to forecast and anticipate grid events. Digitization using Big Data and AI helps address operational challenges of assets in renewable energy companies, but also helps in strategic and institutional issues.

Digitalizing entire value chains can be a big task, especially for smaller actors with complex supply chains. Companies can also be reluctant to share sensitive data. Incentives for participation and responsible and effective data governance practices, therefore, play an important role to foster trust and efficiency in data-sharing practices. Technological advancements may need to be complemented by protocols, standards, or templates for data-sharing communities to organize governance and interoperability of data-sharing initiatives.

Approaching the environment in which all digital data exists as a global Datasphere could provide a perspective shift needed to understand how data governance relates to sustainable value chains. Data collaboration, with the help of technical tools such as encryption, is one example of the innovative solutions available to address challenges. While we transition our existing technologies toward becoming carbon-neutral, it's important we understand the value of unlocking data to address common global issues.