Tech sector sustainability efforts need full ecosystem approach
Tech companies looking to improve the sustainability of their operations need to rethink their attitude towards growth and collaborate across the sector to be effective in meeting the challenge on the timescale required by the climate crisis.
During London Tech Week’s ClimateTech Summit, representatives from both startups and large corporates discussed the importance of reorientating the sector in a more sustainable direction.
Chairing a session on how firms can accelerate positive growth at scale with climate tech, Accenture’s director of Europe innovation, Dagamara Puddick, noted: “Only 50% of CEOs have a clear roadmap to reaching the sustainability pledges that they’ve made, and only 5% have made positive progress at all.”
This is despite the fact that, according to Lubomila Jordanova, founder of carbon footprint reporting firm Plan A, the “window of opportunity” for effective climate action is currently about three years. “That’s kind of it,” she said. “After that, if we have not implemented solutions that are scalable, we are not in a position to be able to stop the climate crisis. Life is going to get quite uncomfortable.”
Jordanova said a big part of the issue is the way tech companies and the wider economy measure success through very narrow parameters, which is leading to inefficiency and obscuring the nature of the problem.
“We have KPIs like growth and GDP and [profit] margins that are really disassociated from reality because they don’t account for the missing pieces, which are the environmental, social and governance elements,” she said, adding that while tech companies will often make “bombastic commitments” regarding the climate, they often have no idea how they will actually achieve them.
“What we’ve been doing [at Plan A] for the last five years is creating this layer of assessment to enable businesses to have visibility on their actual impact on the planet, and on our society,” said Jordanova.
She said the reality is that many companies are heavily dependent on “scope three” emissions, which refers to all indirect emissions that occur in a company’s value chain that are not owned or controlled by the company itself. “These are the suppliers, the investments they’ve done – all of these different stakeholders need to work together, and with our platform, we’re enabling this collaboration to be possible, and for this missing layer of the economy to be included in the way we discuss progress.”
Speaking during the same session, Tessa Clarke, co-founder and CEO of food-sharing app Olio, said: “We have to stop deluding ourselves about growth. GDP growth is absolutely the wrong North Star metric for humanity – we need to move to something far more well-rounded that is focused on human wellbeing, because the reality of the matter is that GDP growth is inextricably linked to the consumption of resources.”
On the importance of decoupling growth from consumption, Clarke noted that Earth Overshoot Day – the day in the year where humanity has used all the resources the Earth can naturally replenish in a year – is getting earlier and earlier each year.
“Back in 1969, Earth Overshoot Day was 31 December,” she said. “If you fast-forward to last year, Earth Overshoot Day was 29 July. Our whole economic system is taking us barrelling over the edge of a cliff because it’s based on this premise of endless growth.”
Speaking during a keynote on climate tech, Octopus Energy CEO Greg Jackson said there are a range of technologies that can help solve the climate crisis – from renewable electricity generation tools and electric vehicles to direct carbon capture and nuclear fusion – but the only thing holding back progress is the current economic system, which is preventing us from “unleashing the power of cheaper, greener energy”.
On redefining growth, Ryan Shanks, head of sustainability for Europe at Accenture, noted that while innovation in many areas is done one company at a time and then used for competitive advantage, the opposite is true for climate change-related innovation.
“What I’m seeing in our portfolio work at the moment, if it relates to the circular economy or the energy transition, etc, is none of our individual clients can actually do anything on their own,” he said. “They are hugely reliant on an ecosystem – policy folks, regulators, entrepreneurs, not-for-profits – of people coming together.”
Shanks said that to achieve innovation at scale, the first thing organisations should do is adopt an inter-disciplinary approach from the ideation stage. “I mean the technologists, the consumer folks, the business model people and finally, increasingly for us, social scientists and ethicists, working side by side,” he said.
“Now on a day-to-day basis, they’ll tell me that working together slows each of them down – the creatives want to work on their own, and the tech want to work on their own – but I’ll say it catches up in the long run because it speeds things up to get to scale.”
A collaborative ecosystem approach can be especially helpful when it comes to decarbonising technology supply chains because, according to Mark Fischel, founder of carbon management startup Aklimate, 80%-plus of corporate carbon is embedded within supply chains.
“A lot of this comes down to a data challenge,” he said. “There is no way really to show and track improvements in your supply chain unless you get primary data from your suppliers.
“I think there’s a really great opportunity here, where typically supply chain engagement has been very top-down, audit-style compliance. What is really the next frontier is shifting from that compliance model, really to a more collaborative exercise where the corporate buyer actually provides lots of incentives – and the tooling to make that a reality.”
Peter Votkjaer Jorgensen, a partner at Maersk Growth, added: “Startups are an essential part of actually achieving anything you want to achieve – they are much better at identifying problems, solutions, and so forth. But might have slightly more challenges in terms of scaling certain things.”
Concluding, Jordanova said: “I think collaboration is absolutely critical for any success that we can assume to expect on the sustainability topic. I think one element that is quite unconventional associated to collaboration is this whole concept of collaboration over competition.
“We don’t have time to be thinking in the paradigms of ‘oh, this company is doing exactly the same as me’ or ‘this competitor of ours has targeted the same’ – the only space for competition is probably where you up your targets and you become even more ambitious than your competitors, but the actual decarbonisation of our economy is dependent on us learning from one another.”