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How Salesforce, Amazon, Google measure climate impact

How Salesforce, Amazon, Google measure climate impact
Written by publishing team

From unusually high temperatures to rampant wildfires, the effects of climate change are becoming more and more common. Pressure is mounting on companies to show how they are taking action to tackle the global problem.

“Nothing will test the navigational prowess of every company, every industry, and every geographic region like climate change,” said Patrick Flynn, MBA ’12, Vice President of Sustainability at Salesforce. “It’s a storm that hits every company at the same time, and companies have a choice: rely on it, steer the ship to it, or drift on to it.”

In 2019, 90% of companies included in the S&P 500 published sustainability reports, up from about 20% in 2011, according to the Institute for Governance and Accountability, a New York-based consultancy. However, not all organizations set goals for themselves how They will reduce greenhouse gas emissions.

The need to match data with targeted actions is becoming increasingly important. Measuring sustainability isn’t easy, said Dara O’Rourke, SB ’89, chief principal scientist at Amazon, who founded the Sustainability Science and Innovation team, but having the right metrics and knowing what to measure helps tremendously.

This year, “the climate conversation has moved from denying and discussing science to discussing strategies for action,” but “we have to show real metrics, real investments in projects right now,” said O’Rourke, who was one of several panelists at the 13th annual Sustainability Summit. at the Massachusetts Institute of Technology. This year’s virtual event explored how metrics and benchmarks can be used to define and practice sustainability across industries.

Data can help companies take action

Many companies track their emissions and use what they learn to bring about change. “As eccentric as it is, the data is at the center of this,” Flynn said. “We need to measure impact” along with reliable data that “is visualized in a way that leads to convincing progress forward.”

O’Rourke, who is also an associate professor at the University of California, Berkeley, said Amazon is measuring its carbon footprint.

And while that’s important, he said, “it’s not accurate enough to actually take action on it” and “it’s not helpful for a business leader to know what they can do with their decarbonization business.” What matters are the metrics that allow companies to track their investments and progress in decarbonization. “The total numbers don’t really help with that,” he said.

Amazon has built detailed models of its business to show factors such as the grams of carbon dioxide emitted per unit conversion and the electricity required to run data centers. Having this kind of information allows a company to see minute details of its business — such as how much carbon dioxide and electricity is used in everything from transportation to data centers to packaging — and then share the results with business units. For example, transportation logistics can use this information to process vehicle and fuel types, vehicle usage rates, and route optimization.

Tracking data across a company can be tricky

One big problem many companies face: Sustainability data is usually located in different places in different systems and requires many parties to work together to get the metrics right.

“Often, there are many different systems, they don’t talk to each other, and the integration has to be done manually,” said Laura Franceschini, a member of the Global Sustainability Operations and Strategy team at Google. Even at Google, which is a big tech company, “people always think, ‘Oh, you have to have these really complex systems, like great databases and things that automatically track this data. “No. Spreadsheets, they are done manually, as in almost any other company.”

Google’s data centers require “fairly constant” energy use, but the company matches 100% of its global electricity use with renewable energy purchases, Franceschini said. (Amazon recently announced a plan to purchase enough renewable energy to cover all of the company’s activities by 2025, and Salesforce, Danone, and Bunge also have renewable energy plans.)

“The next stage in our climate journey is trying to figure out how to get to a point where our energy use is carbon-neutral every day of the year, day and night,” Franceschini said. “We’ve created a metric called carbon-free energy, which we’re tracking now, and we’re currently 60% carbon-neutral, and our goal is to get to 100% by 2030.”

Companies have to keep track of what’s going on upstream and downstream

Another challenge is collecting sustainability and emissions data for businesses that aren’t within your own company, said Robert Covelo, chief sustainability and government affairs officer for Bunge, a Missouri-based agricultural and food business.

While “getting data within our operations is relatively straightforward,” Covello said, “a lot of the data we have to collect is out of our control,” such as data from farmers the company works closely with. Standardizing the calculations for Scope 3 emissions, that is, emissions from corporate suppliers and end users, is not easy.

“That’s the biggest challenge – to keep getting first-hand data on what’s really going on with our farmers,” Coviello said.

Diana Prater, head of sustainable development for Danone in North America, echoed that sentiment.

And as a food company, she said, “a large part of our footprint is in our supply chain, and within our farmers.” She said the company has a collaborative relationship with farmers, as both parties have to understand farmers’ data and transformation opportunities. She said the company is responsible for “helping fund change at the farm level in partnership with farmers.”

What can companies do to move the needle?

  • Communicate and drive sustainability goals within the company.

After metrics are developed, companies need to communicate them to employees and stakeholders. “There is a really close connection between the data, the metrics, and the narrative,” Franceschini said. “You have to back up the claims and communicate what the data says in a way that makes sense.”

Prater said Danone, which is increasing its focus on renewable energy rather than oil and gas, has set company-wide goals that are embedded across the business. Ways to motivate action, she said, include making sustainability goals “linked to incentives and goals” that are able to reward “not only leadership in the organization but stakeholders across the organization.” “Those who sit on the financial team [should] They are motivated to help create the next generation of carbon accounting within the finance team.”

“Our company’s funding mechanism for reward groups has one key metric: our carbon target,” Coviello said. Since metrics affect company-wide rewards, everyone’s mindset is aligned with this goal. “Scale helps change the mind,” he said.

Covello said lawmakers are needed to move the needle on climate change, and companies need to share their data with them.

“We cannot miss the element of politics in all of this,” Coffelo said. “Getting this data in front of the appropriate policy makers to make sure that we are implementing the policies that will be required to move this at a faster pace than it is today.”

Flynn said he looks for moments where “it’s both dangerous if you don’t act and leadership if you do.”

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One such moment was Salesforce’s decision to implement a black water recycling system in one of its buildings in San Francisco – the largest such system in a high-rise commercial building in North America. The system collects wastewater from toilets and sinks, treats it and sends it back through the building.

Going forward, companies can use metrics to drive change, which is essential as more and more consumers are calling for action.

“The customer is demanding action and reliable data to show the credibility of the company’s climate action, and how it shows in the products they buy, and the goods and services they buy,” Flynn said.

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