With climate change continually close to the top of the global agenda, and as the 1.5-degree threshold is expected to be passed, understanding the role of technology and artificial intelligence in driving decarbonisation is more critical than ever. Technology can transform the way we measure, manage, and mitigate greenhouse gas emissions across industries, supporting businesses, governments, and societies to reach their net zero goals.
AI is set to reshape sustainability practices. For years, AI has been a hot segment in venture investing, and that enthusiasm is spilling into climate tech. In 2023, start-ups focused on AI-related climate solutions accounted for 7.5% of total climate tech investment, securing US$5 billion. By Q3 2024, that figure had surged to US$6 billion – 14.6% of total investment – exceeding the previous year’s total by US$1 billion. AI can be a powerful catalyst for emissions reduction, enabling businesses to identify high-impact solutions faster.
The supply chain is a volatile landscape prone to disruption, something businesses are weathering the impact of right now with geopolitical uncertainty and the introduction of new trade policies and tariffs. AI and technology-driven platforms can help businesses manage risks such as these and minimise their impact by modelling scenarios and designing supply chains with greater resilience to challenging times.
The critical role of data in decarbonisation
Data is at the heart of effective decarbonisation strategies. While Scope 1 and 2 emissions are, in theory and practice, relatively straightforward to calculate and control, Scope 3 data is intricate and complex. Scope 3 emissions encompass the entire supply chain, extending all the way to the end consumer. And importantly, typically, they account for the lion’s share of an organisation’s greenhouse gas footprint, often 26 times higher than emissions from direct operations.
A shift towards incorporating more primary data directly from suppliers and away from industry averages is essential. This approach will increase transparency regarding suppliers’ sustainability actions, helping businesses identify carbon hotspots and areas of non-compliance. Emerging best practices in procurement, such as carbon pricing mechanisms in tenders, are further enabling businesses to integrate sustainability into their commercial decisions.
AI and digital twins as catalysts for progress
Not too long ago, the prospect of measuring Scope 3 emissions seemed like an almost impossible task to businesses. Manual calculation of a value chain’s greenhouse gas emissions is time and resource intensive. However, technology has been a game-changer, not only improving tracking but also reducing emissions across supply chains.
AI is reshaping how businesses approach sustainability. Internet of Things devices are giving teams real-time visibility into emissions, while AI-powered analytics uncover actionable patterns and optimisation opportunities. As such, AI-powered platforms enable businesses to assess supplier maturity, automate the processing of bills of materials (BOMs) and product carbon footprints (PCFs), and generate accurate product-level emissions data. This primary data allows businesses not just to benchmark suppliers, but to make more informed procurement decisions and identify the most impactful decarbonisation pathways. As digital twin technology gains traction, businesses can go a step further, simulating different emissions reduction scenarios and model potential supply chain reconfigurations to forecast outcomes and accelerate progress toward net zero.
As AI and orchestration layers evolve, businesses are able to shift their focus from the laborious administrative tasks to the more strategic initiatives that will drive impact such as multi-tier supply chain mapping, supplier hackathons and building stronger engagement programmes with suppliers.
Building a resilient, low-carbon future
The convergence of AI technologies presents an unprecedented opportunity to redesign supply chains for resilience and sustainability. As the geopolitical landscape forces businesses to rethink supplier networks, now is the time to integrate emissions reduction strategies into procurement at scale.
Achieving a net-zero supply chain is not just a necessity for business resilience – it is a competitive advantage and a collective responsibility in the fight against climate change. The time to act is now, and technology holds the key to unlocking a sustainable future.
