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Sustainability is becoming a business imperative and more companies are investing in environmental, social and governance (ESG) initiatives.
“ESG-focused investing has grown rapidly. Global sustainable investment is now $30 trillion, up 68% since 2014,” McKinsey & Company predicted in 2019.
Companies are paying more attention to ESG standards as corporate social responsibility becomes increasingly important to communities, customers, employees and investors. In 2020, the World Economic Forum published a frame for consistent standards to support integrated annual reporting. Many leading organizations have since adopted it.
At the highest level, ESG standards are operational and aligned with the UN Sustainable Development Goals (SDG):
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- Surroundingsincluding climate change, greenhouse gas (GHG) management, impact on biodiversity, water neutrality, air pollution, waste and resource reuse.
- socialfocused on relationships with customers, employees, suppliers and other stakeholders.
- Managementpaying attention to internal practices and controls to make effective decisions, comply with legal requirements and report to external stakeholders.
ESG standards may sound restrictive, but they provide a framework that creates business value in several ways. McKinsey & Company finds that ESG initiatives drive revenue growth by entering new markets and expanding existing ones. It builds customer confidence, lowers operating costs through more efficient energy use, waste management and other inefficiencies. This also minimizes regulatory and legal interventions and increases employee productivity by establishing a strong external value proposition.
Research by KPMG has found it that “80% of companies worldwide now report on sustainability.” Environmental sustainability reporting has made significant progress in recent years, with 63% of organizations prioritizing reporting on climate change emissions.
As these initiatives spread, climate technologies are increasingly emerging. Indeed, McKinsey & Company estimates that 35-45% of the technologies needed “to solve the net-zero equation” are currently under development.
While life on land and in water is lagging far behind, with less than 20% of organizations prioritizing the sustainability of ecosystems based on biodiversity, these areas are quickly emerging as legal requirements in many regions.
There is no such thing as too much data
As with most major initiatives, data is vital. The development of these technologies and the programs that deploy them depend on data. With accurate, accessible, and actionable data, organizations can make better business decisions, evaluate detailed results, and create more accurate reports.
An emerging data source comes from satellites. Far beyond weather forecasts and online maps, modern satellites now produce massive amounts of data that help evaluate what’s happening on the ground. With predictive modeling, it is even possible to anticipate and prepare for likely future scenarios with great precision. The latest insights from space provide fresh, actionable and rapid perspectives on understanding and solving the problems below.
What data can satellites provide?
Currently, more than 1,000 satellites come into orbit every year, covering a wide range of possibilities. Several technologies, such as multispectral bands and synthetic aperture radar (SAR), capture high-resolution images, some of which the human eye cannot interpret without assistance. Using expertly trained artificial intelligence (AI), the digital images provide data on chlorophyll and moisture content in vegetation, greenhouse gas emissions, the extent of biodiversity and more.
With historical data from a previous hour and even a decade, AI analysis can detect deep trends in asset health, air quality, terrain, flora, fauna, and many other factors not typically available in boots-on-the-ground data. analysis. Capable of inspecting more than 10,000 miles a day, AI-powered satellites can reduce the labor costs of routine, physical inspections, freeing up budget and staff to focus on the more valuable, exceptional aspects of their work.
ESG: You can’t improve what you can’t measure
One of the applications of that data is to measure the progress of ESG initiatives. The approach of the United Nations is known as measurement, reporting and verification (MRV), which has gained wide acceptance by governments and industries. Essentially, MRV is needed because corporate and government commitments to sustainability measurements require baseline measurements to compare with ongoing progress measurements.
Typically, ESG and sustainability measurements fall into four areas.
An area is the nature-oriented measurement of land and water. It includes carbon stocks and annual change, biodiversity, water abstraction, return water quality, contribution to air pollution impacts and land use change.
The second common area is the monitoring of GHG emissions by quantity GHG levels, which are reported in terms of CO2 equivalents from operational activities and progress in reducing GHG targets.
The third is carbon offset measurements, which are often used in a strategy to offset operational emissions that are difficult to displace.
Fourth is to measure biodiversity of sustaining life, including species and habitats. Unlike carbon and GHG measurements, there is no generally accepted standard unit for measuring biodiversity, although many measures exist.
4 ways to increase business value for ESG using satellite data
With all this in mind, here are some ways to use satellite data to build business value from ESG initiatives. They are especially useful for industries with assets spread across large geographic areas, including electric utilities, gas utilities, energy, water and wastewater, mining, and transportation.
1. Optimize operations
Satellites can provide valuable information about weather, land and vegetation to optimize day-to-day operations. For example, utility companies may refer to satellite imagery when maintaining their distribution and transmission corridors. Satellite data can also help oil and gas companies plan pipeline routes, detect leaks, identify breaches and prevent environmental disasters. Other core industries with widespread assets, such as mining and transportation, also benefit from regular assessments of the health and risk of their assets.
2. Evaluate environmental impact
Land mapping helps to monitor the environmental impacts of various assets, but in the past it was necessary to hire professional environmentalists to inspect the land on foot or from helicopters over several days. The cost of these methods limits their scope and how often they can be used.
Now satellites can complete land surveys in just a few days for 10-20 times less cost. Water and wastewater organizations are benefiting from this progress. Faster and cheaper satellite surveys can be done more frequently and for more accurate verification of profits and losses within the carbon footprint.
3. Predict and limit challenges
Satellite data enables organizations to create accurate, predictive models to minimize their impact on the environment by establishing a baseline and measuring progress against biodiversity net profit targets, as is the case for all land development in the United Kingdom.
For example, with satellite data, oil companies can predict how much environmental damage will be caused by the construction of a new offshore pipeline and prepare their mitigation plans. Likewise, satellite data can help utility companies predict vegetation growth so they can manage right-of-way, detect invasive vegetation, and prevent potential outages and wildfires. The data helps them deploy maintenance crews before equipment and land are compromised.
4. Demonstrate progress to stakeholders
Satellite data also provides a way to measure, improve and report environmental statistics to customers, investors and regulators.
For example, satellite data helps to monitor carbon, methane and other greenhouse gas emissions to ensure regulatory standards and public commitments have been met. Transportation and energy companies can use the data to carefully plan and manage routes through wetlands and other sensitive areas with protected species.
The bottom line for ESG
Ultimately, climate technologies, such as satellites, improve the accuracy of information used by core industries, improving the effectiveness of their ESG efforts and relationships with communities, customers, employees and investors while building a better future for all.
ESG conscious companies can transform their operations, maintenance and sustainability in industries with geographically dispersed assets by using satellites and AI. With access to a continuous, near-real-time stream of reliable, critical data, core industries can make more informed decisions and optimize long-term plans, while reducing costs, improving reliability and achieving their sustainability goals.
Abhishek Singh is the co-founder and CEO of AiDash.
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