Sustainability and Technology in Retail and Hospitality

Source:

Excerpts from “Sustainability in Retail and Hospitality” featuring Pablo Orvananos, Global Sustainability Consulting Lead Hitachi Digital Services.
 

Executive Summary:

With a significant carbon footprint within the ICT (Information, Communication and Technology) sector itself, there is immense potential of leveraging technology to drive decarbonization. Strategic approaches for companies to accelerate their sustainability journeys, identifies common challenges in applying technology to sustainability, and presents key technological solutions that can facilitate ESG reporting, emissions management, and supplier engagement. Real-world examples from eBay and Hitachi’s own offices illustrate the tangible benefits of technology-driven sustainability initiatives.
 

Main Themes and Important Ideas/Facts:

1. The Significant Environmental Footprint of Technology:

• Almost 4% of the total carbon emissions come from the ICT (Information, Communication and Technology) sector so if you put this into context, its more than the whole aviation sector.” This stark comparison underscores the responsibility of the tech industry to lead by example and to develop solutions for broader decarbonization.

2. Hitachi’s Dual Approach to Sustainability:

Hitachi adopts a two-pronged strategy towards sustainability:

• IT Green Transformation for Growth: Focuses on helping customers in their decarbonization journey through a “greener portfolio” and “end to end sustainability solutions.”
• Green Transformation for Core: Encompasses internal efforts to make Hitachi a more sustainable company.

The synergy between these two approaches is highlighted: “The good thing of these two things is that they interact with each other… we use our own tools our own companies which retrofit our own tool our tools and then makes them better and makes them evolve much faster.” This creates a valuable feedback loops for rapid innovation.

3. Accelerating the Sustainability Journey through Strategic Shifts:

Here are three key areas where companies can make “step changes” rather than incremental improvements:

• New Partnerships: Collaboration with competitors, clients, suppliers, and academia can unlock significant potential.
• New Business Models: Embracing circularity principles (reuse, refurbish, repair) and “as a service” models can fundamentally alter environmental impact.
• New Technologies: Leveraging identified “12 technologies that are going to impact on sustainability” is crucial for accelerating progress.

4. Common Challenges in Applying Technology to Sustainability:

Several hurdles often hinder companies in their technology-driven sustainability efforts:

• Scaling Solutions: Moving beyond pilots and Excel-based systems to company-wide implementation is a major challenge.
• Upcoming and Changing Regulation: Proactively considering future regulations like CSRD, ESRS, and the Critical Raw Materials Act is essential for long-term compliance.
• Integration with Existing Platforms: Siloed applications and technologies create integration complexities that require ongoing maintenance. A holistic approach from the beginning is recommended.
• Justification of Investment: Creatively building the business case for sustainability investments by highlighting various benefits beyond energy savings (e.g., maintenance, market share, regulatory compliance) is crucial.
• Data Quality and Availability: Assessing existing data before investing in new data collection is important to maximize the value of current resources.
• Legacy Assets: Integrating existing infrastructure into the sustainability journey needs careful consideration.
• Sustainability Maturity: Companies need to be realistic about their current level of maturity and their ambitions. Many UK companies are currently focused on regulatory compliance rather than deeper sustainability integration.

5. Key Technological Solutions for Sustainability:

There are several critical technology categories that can significantly aid sustainability efforts:

• ESG Data Aggregation and Reporting Tools: These systems are essential for collecting, aggregating, and simplifying ESG data for reporting purposes, including compliance with frameworks like CSRD. Key features to consider include flexible data ingestion, auditability, pre-built frameworks (e.g., CDP, GRI), and integrated emission factors.
• Emissions Platforms: These tools facilitate emissions calculation (including converting spend and energy data), simulating decarbonization journeys, and crucially, managing Scope 3 emissions through automated, AI-driven emission factor allocation for purchased goods and services. The ability to onboard suppliers for free and integrate with procurement systems is vital.
• Supplier Engagement Tools: Automating the process of sending questionnaires, reminders, and tracking responses from suppliers is crucial for efficient data collection and risk assessment within the supply chain. These tools should ideally align with relevant regulations and provide insights for helping suppliers decarbonize.

6. Real-World Examples of Technology in Action:

• eBay: Hitachi helped eBay deploy 40,500 sensors in their data centers to capture various operational data. This data was then used to create dashboards providing insights into power utilization efficiency, carbon utilization efficiency, and water utilization efficiency.
• “The results of this is that we helped a company as big as eBay to reduce 13% their carbon footprint just by giving visibility of what was going on and then give them these ratios and helping them improve them by how they operated their equipment.” This demonstrates the power of data-driven insights in achieving significant emissions reductions.
• Hitachi’s Own Offices: Hitachi is working with LoweConnex to install IoT sensors across their 120 global offices to understand energy consumption and identify opportunities for reduction.
• “Out of this we’re estimating around a 7% reduction in our cost on energy.” This showcases the applicability of these technologies even for internal sustainability efforts.

Key Takeaways:

• Technology plays a vital role in enabling and accelerating sustainability initiatives.
• Companies need to move beyond incremental changes and embrace strategic shifts in partnerships, business models, and technology adoption.
• Addressing the challenges of scaling, regulation, integration, investment justification, and data management is crucial for successful implementation.
• Leveraging specialized technology solutions for ESG reporting, emissions management, and supplier engagement can significantly streamline and enhance sustainability efforts.
• Real-world examples demonstrate the tangible benefits of applying technology to achieve substantial reductions in environmental impact.

Next Steps:

 
Organizations in the retail and hospitality sectors should:

• Assess current sustainability maturity and identify areas where technology can drive significant impact.
• Explore the potential of new partnerships, circular business models, and innovative technologies.
• Proactively plan for upcoming sustainability regulations and ensure their technology investments are future-proof.
• Prioritize data quality and develop a robust data strategy for sustainability reporting and analysis.
• Consider leveraging existing market solutions for ESG management, emissions tracking, and supplier engagement to avoid “reinventing the wheel.”
• Learn from successful case studies and explore opportunities for technology implementation within their own operations and supply chains.

 
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