The Role of PLM and Technology in Innovation-Driven Sustainability

COP27’s zero tolerance for greenwashing and 5-year program to accelerate climate technologies.

According to the results of the carbon emission survey “Technology is the Fast Track to Net Zero” issued in October 2022, Boston Consulting Group (BCG) reported that “over 70 percent of organizations foresee at least $1 million dollars in annual benefits from emissions reduction […] and 37 percent anticipate annual benefits of $100 million or more.” Furthermore, BCG highlighted that “54 percent of organizations identify an improved reputation [and lower operating costs] as a key benefit of emissions reduction, and 37 percent list the ability to attract top talent.”

“The Technology Executive Committee (TEC) and Climate Technology Centre and Network (CTCN) […] launched their joint work program to accelerate the deployment of transformative climate technologies that are urgently required to tackle climate change,” states a COP27 press release. (Image courtesy of Kiara Worth / UN Climate Change.)

Having said that, the same BCG survey warned that about 90 percent of organizations still fail to measure Scope 1, 2 and 3 emissions, while those that do estimate an average error rate of 25 to 30 percent. The survey also reports that “although 92 percent of all emissions are Scope 3, according to the Carbon Disclosure Project (CDP), just 12 percent of organizations surveyed consider Scope 3 their top priority.”

Near the end of 2022 at COP27 in Egypt, the UN Environment Program (UNEP) and the UN Framework Convention on Climate Change (UNFCCC) launched a new 5-year work program to promote climate technology solutions under the “Technology Mechanism” umbrella. This program is set to foster “technology roadmaps, work on gender and technology, technology and NDCs [Nationally Determined Contributions] and digitalization, and common areas of work for the two bodies, including national systems of innovation, industry and the water-energy-food nexus.”

In this post, I discuss the role of the Climate Technology Center and Network (CTCN) and the Technology Executive Committee (TEC) in driving forward technology transfer opportunities. We are going beyond CO2 emission reporting towards combining innovation-driven sustainability and business value creation, and expanding on how this relates to the role of PLM technologies to foster innovation.

The CTCN is the implementation body of the Technology Mechanism, whereas the TEC is the policy body; in short, they will collaborate to catalyze and accelerate action to unlock transformational change. 

With this program of work, the CTCN acknowledges, on its website, the need “to rapidly accelerate the shift towards climate resilience and emissions reduction.” A COP27 press release backs this up by saying it will continue delivering on its mandate to respond to country-driven requests with a focus on strengthening developing country capacity to address technology challenges and opportunities for adaptation and mitigation.

“Established in 2010, the Technology Mechanism plays a central role in facilitating support to developing countries on climate technology development and transfer. This includes support for countries to implement their nationally determined contributions,” says the UNFCCC website. (Image courtesy of UNFCCC.)

With this 2023-2027 program of work, the CTCN aims to support countries in “seeking to enhance transformational impact and scale across its core areas through two proven technology enablers (national systems of innovation and digitalization) and five system transformations (water-energy-food nexus, buildings and infrastructure, sustainable mobility, energy systems and business and industry).”

The following two technology enablers will help accelerate collaborative innovation, enhance technology development as well as transfer, align and contribute to policy and regulatory environments. Specifically:

1. Digitalization covers digital solutions and the underlying infrastructure to support innovation and new product development (including cloud computing, IoT, big data analytics, AI and more.)
2. National systems of innovation include regulatory frameworks, planning processes and the advancement of technology transition pathways that stimulate the uptake of climate technologies.

In a recent publication entitled “Beyond technology transfer: Innovation cooperation to advance sustainable development in developing countries”  Pandey et. al. (2021) argued that technology transfer is not straightforward, especially in a changing environmental context. What worked in the past in one location might not work somewhere else for several reasons, including societal factors.

Pandey et. al. promote the need to focus on “innovation cooperation” to broaden the focus to the complete technology and product lifecycle with broader stakeholders contributing towards the same objectives. In fact, this approach leverages similar underpinning principles from product development practices, typically coupled with the associated PLM transformation required to make it happen.

Moving away from greenwashing implies implementing tangible action plans to drive associated business outcomes beyond the simple net-zero pledges. It is a question of credibility and accountability, but also a question of contextual value creation and risk mitigation. Organizations are likely to struggle when concurrently driving net-zero convergence and innovation if they delay or simply avoid tracking how business decisions and operations contribute to greenhouse gas (GHG) emission management.

When it comes to carbon footprint reduction, the real question is moving away from a “reporting challenge” to the need for a tangible and detailed implementation roadmap that works towards value realization. Other questions include:

• Beyond regulatory compliance, what business value do organizations aim to realize from GHG emission reduction (beyond fine avoidance)?
• How can organizations improve what is not (or at least not accurately) measured?
• Is there a technology gap in measuring and tracking ESG impacts, leveraging native enterprise ERP and PLM technology platforms?
• Why are some organizations greenwashing, and do they lack the incentives to drive business value from the circular economy?
• More fundamentally, are many organizations appreciating direct business impacts from emission reduction on their ability to innovate—including the ability to derive new business models?
• How are organizations tracking experimentation and critical decision-making in driving open innovation, from prototyping to developing the required production intent?

What are your thoughts?