How to utilise AI to reduce carbon costs in big-sized business?
Artificial intelligence is one of the innovations that has changed the outlook of almost every industry. It is not just changing the personalised experience of the customers but also plays a significant role in reducing carbon emissions created during operations. It has now become a key player in helping different businesses in reducing carbon emissions to save the planet, says Ritesh Sutaria, CTO and director at Prompt Softech.
For example, Artificial intelligence technology has already helped cut down the energy industry’s carbon footprint via efficiency improvements, specifically in customer engagement, fraud detection, and energy trading.
Carbon has a cost and is also very expensive, especially when it comes to large corporations having a big carbon footprint.
AI is an effective tool that can assist such businesses by cutting costs and making the decarbonisation process more feasible. It will help in managing carbon emissions and also help in improving productivity by automating operations.
What do you understand by carbon costs?
Carbon costs are explained as business expenditures associated with managing and complying with responsibilities or liabilities under laws and regulations related to greenhouse gas (GHG) emissions. With the increase in the carbon trading markets and the utilisation of carbon pricing, there is now a price affixed to carbon dioxide emissions that corporations are obliged to pay. Businesses have to pay carbon taxes or emissions trading schemes (ETS) and also other small expenses like cost related to carbon accounting and other miscellaneous costs.
How Artificial Intelligence helps businesses to keep carbon costs down?
To know the role played by AI in reducing carbon costs, we must understand what practices help in keeping carbon costs down. It all boils down to minimising emissions and being as efficient as possible.
- Measure emissions created by business – Carbon accounting is the first step to reduce carbon costs. For businesses that are aware of how much carbon their operations emit, it’s easier to establish goals and formulate decarbonisation plans.
- Eliminate inefficiencies in business – Efficiency is the way to lower the emissions, so businesses must determine and eliminate inefficiencies in their operations as much as possible.
Boosting operational efficiency in businesses:
When we talk about efficiency in business operations, it should be combined with AI as it is the most significant selling point in industries, and it has a direct connection in reducing carbon emissions. AI technology can eradicate redundancies and take over monotonous, repetitive tasks that human employees would otherwise do.
AI empowers businesses to distribute their human resources to higher-value tasks that require human interference to improve productivity. The importance of AI increases in big businesses as the size of their operations enjoy more significant benefits from the efficiency enhanced by AI technology.
Various forms of AI technology have a direct effect on operational efficiency.
- Conversational AI in organisations – Offering prompt, 24/7 customer service isn’t enough, and cost-effective and low-cost alternatives can be ineffective. AI-powered chatbots can solve this issue by immediately responding to customer concerns at any time of the day.
- Workflow automation in operations – Businesses can improve the productivity of their employee by eradicating manual tasks using automation. As mentioned earlier, artificial intelligence can handle repetitive and monotonous tasks by automating them and releasing the workforce for priority tasks that directly affect productivity. Examples of workflow automation are: streamlining IT service requests, using virtual assistants to set meetings and appointments, and AI-based customer relationship management software.
Accumulating data on emissions
AI is emerging as a hero by modifying data collection. For example, Artificial intelligence in the beauty sector permits companies to go through millions of product reviews to collect valuable data quickly. Within the decarbonisation context, AI’s role in data collection is prominent. Decarbonisation methods are data-driven and emphasize the importance of more efficient data gathering and analysis methods. Without data, organisations will operate blindly, especially in cutting carbon costs. The amount of carbon emissions is linked to carbon-related expenses, so organisations must know about the amount of carbon they release into the atmosphere. AI can accelerate the carbon accounting process and makes it more efficient. With carbon accounting, businesses have a digital platform that simplifies managing GHG emissions while decreasing their environmental impact.
Some examples of such technologies:
- Plan A – It is a Berlin-based company that utilises an AI- and digital-driven SaaS platform to enable companies to achieve the goal of net-zero carbon emissions.
- Tomorrow – It is a Danish-based company that utilises AI and machine learning to automatically estimate the environmental impact caused by our daily activities.
Recent progress in the maritime transport industry highlights the importance of Artificial Intelligence in handling carbon emissions. The maritime organisation, IMO, will implement two new rules, one of which is the Carbon Intensity Indicator (CII) rating. To execute this, the IMO will require shipping operators to submit a Ship Energy Efficiency Management Plan (SEEMP) commencing January 2023. This plan describes the steps they executed to make their ships more energy efficient in a cost-effective way. Operators will leverage huge benefits using AI-powered tools to assist them in creating the SEEMPs.
Conclusion
Lower carbon emission implies lower carbon costs. This is not a big issue for small businesses but a problem for bigger companies.
Ritesh Sutaria
Lower carbon emissions means lower carbon costs. Their larger-scale processes emit a large amount of carbon, creating higher carbon taxes and more costs on carbon management. Besides the changes like cutting plastic use, large businesses must depend on AI to improve operational efficiency, cut down carbon emissions and maximise the carbon management process. Thankfully, AI technology keeps updating and organisations will have even more alternatives per their business requirement.
With the changing climate and increase in temperature, it is essential to take the initiative that can lower carbon emissions and other greenhouse gases. The only possible way is to add technologies to this initiative and track down the reasons causing GHGs. Therefore, including AI in business for carbon emission management, not only just cut down carbon costs but ultimately helps save the environment.
The author is Ritesh Sutaria, CTO and director at Prompt Softech.
About the author
He has over 20 years of experience in product engineering and leading an Organisation. He also has demonstrable organisational skills in putting together customer-focused team of high-caliber achievers who have delivered remarkable performances.
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