Learn about how business leaders can make better decisions that can positively impact our planet by going net zero.
October 19, 2022
6 min read
What if you could protect your bottom line while going net zero? As a business leader, wouldn’t you want to spend company money on vendors that are not only priced right, but who also do good for the planet?
To go net zero means balancing greenhouse gas emissions by removing the same quantity of emissions you produce in the atmosphere. Getting to net zero will require significant change and large-scale technology deployment across multiple industries - which opens up radical opportunities to build entirely new businesses. Allied Market reports that the demand for green technology is booming, at an expected CAGR of nearly 22% from 2020 to 2030.
If provided with reliable technology and data, we can all make better decisions that will directly impact the planet. Getting concrete guidance on which vendor to choose based on carbon neutrality, fair trade, or other sustainability factors, is not just something for the future - it’s already here.
The importance of “going net zero”
Why is it essential to cut greenhouse gas emissions to as close to zero as possible? The constant increase of CO2 is the main driver of global warming, causing natural disasters across the globe, daily. The Paris Agreement underlines the need for a permanent net zero - where the greenhouse gas does not return into the atmosphere over time. It doesn’t stop there; to reduce global warming, we need to reach net zero and also repair the harm prior emissions have done to the planet. We need to put a plan in action, and there is no better time to start than now, right?
On the path to a “net zero” future, renewable energy sources and energy efficiency will address around 55% of carbon emission reductions. Therefore, microgrids, energy harvesting technologies, and businesses adopting asset optimization strategies will be crucial, Gartner stresses in their 2022 Emerging Technologies and Trends Impact Report on Environmental Sustainability. Since the remaining 45% of carbon emissions are derived from everyday activities, specifically the production, distribution, and consumption of general products, services, and goods, it’s critical that each and every company takes responsibility for becoming a sustainable business.
Growing demand for green tech
The definition of “green technologies” is eco-friendly solutions that result in economic and social sustainability. The global green technology and sustainability market size was valued at $10 billion in 2020 and is projected to reach $75 billion by 2030, according to Allied Market.
In a recent report from McKinsey, they state that net-zero offerings could generate more than $12 trillion of annual sales by 2030 across 11 value pools, including transport ($2.3 trillion to $2.7 trillion per year), power ($1.0 trillion to $1.5 trillion), and hydrogen ($650 billion to $850 billion). The transition in the global economy opens up enormous growth potential for green tech solutions.
The need from the environment is there, but the customer demand seems to be lagging. In a CFO study Vic.ai performed earlier this year on the Future of Automation and Intelligence in Enterprise Finance, we asked what the main objectives for collecting better data and intelligence were. As you can see in the graph, optimizing processes, resources, and costs, along with approved improved control, scored much higher than getting insights on spending vs. CO2 emissions.
The question is: Is the environment not a big priority for large corporations (yet), or is the knowledge about intelligence products capable of providing insights on such metrics still (too) low?
Green tech players pushing for rapid change
Earlier in 2022, Vic.ai announced Spend Intelligence for Prescriptive Cost Optimization. Vic.ai Spend Intelligence will compare a company’s costs among peers and competitors, and identify cost optimization opportunities specific to each customer. In the press release, Alexander Hagerup, CEO of Vic.ai said, “With Spend Intelligence, we continue to push the boundaries of what AI can do for finance. In addition to cost reductions, we’ll eventually track and monitor carbon footprint to help companies calculate and reduce CO2 emissions.” As a company, we look forward to working more closely and more prescriptively with our customers to pinpoint changes that will translate into significant cost and environmental savings.
Other players include companies tracking the CO2 emissions linked to purchases - calculating the carbon impact of every transaction. Their goal is to encourage people to actively reduce their carbon footprint by demonstrating how small changes can impact the environment. An example is the Swedish Fintech company and the DO card, which uses the Aland Index as the basis for calculating the carbon footprint of each product purchased. Users set a maximum value for their carbon spending and get insights on compensating for their carbon footprint.
There are also good examples of credit cards designed to demonstrate the connection between saving money and lowering a consumer’s carbon footprint. The consumer gets cash-back based on “green spending,” which includes things like riding a Citi bike, taking public transport, and buying second-hand clothes, opting for brands with a more sustainable offering and lower carbon footprint than the alternatives. An example of this model is brought to the market by a startup called Future.
In conclusion, every tech innovation and a good-over-bad decision will make a difference in the rapid change required from all of us, both consumers and corporations. Vic.ai is committed to contributing to a better planet through various product offerings, which we’ll be rolling out within the coming 12 months. It’s time to decarbonize and achieve net zero! To stay up to date with our upcoming product offerings or finance tips, subscribed to our weekly newsletter below.