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It has been many years since the threat of climate change could really be considered merely theoretical.
There is more carbon dioxide in our air than ever before. According to NASA, 19 of the warmest years in Earth’s history have occurred since 2000. The sea level has risen almost four inches since 1993, while the ice in the Arctic Sea has shrunk by about 13 percent each decade since 1979. In fact, in 2012, Arctic summer sea ice dropped to its lowest levels ever recorded.
The list goes on, and the impact is inarguable: Wildfires, droughts, and heat waves are becoming more common, and coastal areas face the threat of inundation due to rising sea levels. In the years to come, scientists warn of the extinction of various species and, in certain parts of the world, mass food scarcity.
It can be a picture almost too stark to stare at closely. But Charlotte Degot, a managing director and partner at Boston Consulting Group (BCG), could not bear knowing all this without doing something about it—or at least trying her best. She wanted to be able to look at her children one day and tell them that in the face of climate change, she’d done something.
So she went out and built a tool that could change, well, everything. Simple, right?
We know by now that fighting for a livable planet takes more than just a village. Yes, governments play a foundational role in using policy and regulations to control emissions, but Degot saw a more immediate way to drive large-scale change: from within corporations, inarguably some of the largest producers of emissions in the world.
The numbers speak louder than words. CDP is the environmental nonprofit that pioneered corporate environmental disclosure more than 21 years ago, with over 13,000 companies worldwide disclosing through its platform last year alone. When it teamed up with the Climate Accountability Institute to study emissions in 2017, it found that 100 companies had accounted for more than 70 percent of the world’s greenhouse gas emissions since 1988.
In short, for anything to really change, the private sector needed to take a long look in the mirror.
“We want to help corporations manage their net-zero journeys,” Degot says. “What they already do for financial accounting, we can do for environmental accounting.”
Cynics argue that corporations have been slow to improve their carbon footprint due to bottom-line considerations, and to a certain extent, that’s true. But an even larger problem is the staggeringly complex data issue that climate change presents: The first part of changing behavior is to understand which behaviors to change, and frankly, measuring the product-level emission granularities of international supply chains is exceedingly difficult stuff.
“CDP manages the largest global platform for environmental disclosure and has had a huge impact on mainstreaming disclosure and driving corporate environmental action over the past 20-plus years,” says Dexter Galvin, CDP’s Global Director of Corporations and Supply Chains. “We're now working with BCG to help companies measure and manage the product-level emissions in their supply chains, because until now, it's been a very hard thing for them to measure. We have always asked for product-level data in our system as one of our questions, but only 2 percent of companies responded to that data point last year—because it's incredibly clunky, incredibly challenging information to get.”
Degot sees that as fundamental to the problem. Just 9 percent of companies measure their emissions comprehensively. And, as she puts it, “You cannot reduce what you cannot measure.”
As a leader within the sustainability and climate work for BCG GAMMA—BCG’s industry-leading artificial intelligence and machine learning arm—Degot saw an opportunity for her organization to develop a mechanism to track, aggregate, and interpret these massive amounts of corporate emissions data. As a data scientist by trade, she knew AI would have to be a driver. Humans may be better than AI at many things, but compiling and assessing millions of data points across hundreds of thousands of global suppliers is not one of them.
And that was the core of Degot’s idea: CO2 AI, a platform designed to help corporations track and broadly understand their emissions—and develop strategies to lower them.
Degot started in April of 2021 with just two other data scientists. Over the following year, BCG added another 70 employees to the effort—effectively making CO2 AI its own startup within BCG.
In short, the tool aggregates emissions data from across a company’s entire supply chain. But supply chain data volume and complexity are full-stop issues—they can’t just be managed in slick Excel pivots. Degot knew AI was the path forward; advanced algorithms could take dense information and produce predictive models that would inform a company’s path to reduce emissions. Most importantly, CO2 AI would allow a corporation to see what impact an identified optimization could have prior to implementation.
Supply chains were a prime target for CO2 AI. As CDP explains in its 2021 supply chain report, which draws on data from its corporate disclosures, those processes account for 11.4 times more emissions than direct operations. Take, for instance, an international wine and spirits corporation with billions of dollars in sales and customers around the globe. CO2 AI can track emissions from facilities, purchased electricity, raw materials, leased assets, IT systems, business travel, and waste. The platform can even simulate changes in the company’s glass design and supply chain to realize the importance that different variables—such as color, production, and design—have on the company’s emissions. CO2 AI then offers up solutions that could help lower that number, like changing the color of glass in a bottle from white to green. Ultimately, though, the impact goes far deeper: These emissions simulations are designed to catalyze large-scale change-making decisions across the organization, extending from product design to procurement, distribution, and beyond.
“It is crucial for corporations to set meaningful targets and successful action plans,” Degot says. “One of the most powerful tools we have to help us accelerate on this journey is artificial intelligence. It can process data automatically from diverse, unstructured services, like invoices and consumer behavior data. Now, instead of having one big average number, you have a model that calculates emissions at a granular level. The company can move to action because they can set meaningful targets, identify concrete initiatives, and calculate emissions over time.”
As of 2021, BCG’s own research suggests just 9 percent of companies measure their emissions comprehensively. Only 5 percent decide on any form of public emission-reduction targets—and just 1 percent actually reduce their emissions in a way that is in line with their targets. In other words, the private sector has an exceedingly long way to go.
Degot and her team see that as a major opportunity—CO2 AI can turn the 9 percent into something much larger. And to Degot’s point, when companies can effectively measure their emissions, they can far more effectively address them. As her team works to grow that number, the tool itself continues to improve. They are constantly fine-tuning its algorithms, adding new features, and incorporating data sourcing to better support clients’ net-zero journeys. And that’s just after one year of action. The new partnership with CDP will allow the platform to expand its services by enabling the sharing of product-level sustainability Scope 3 data in a secure and action-oriented way - so imagine how it will help companies to accelerate and collaborate over the next crucial decade of their net-zero journeys.
“Is AI the best solution? I would not say that. I would say that AI can be part of the solution, for sure,” Degot says. “This is about leveraging AI as part of many other things to move to action. And, for me, action is what we have been missing. We know the solutions—it’s now about identifying the right one.”
This article was produced by WIRED Brand Lab for Boston Consulting Group.
