Tech industry needs to collaborate to solve the ongoing energy crisis, SAP exec says

In order to help solve the ongoing energy crisis, the technology industry needs to collaborate, according to Scott Russell, executive board member and leader of customer success at SAP.

“The energy crisis is real. It’s ongoing. It’s not going to be fixed only through dialogue at the geopolitical level, it’s going to be solved through the use of technology and helping connect businesses, helping them to physically be able to address those challenges together,” he insisted.

Scott Russell. Credit: SAP

In the past year or so, countries across Europe have been in the midst of an energy crisis. Europe began to see some problems with energy supply back in 2021. Usually, during the winter months, the EU imports liquefied natural gas from the United States, Latin America, and Russia, but the power grid problems that Texas faced reduced the cargoes of liquefied natural gas during the winter, and on top of that, the past couple of winters were much colder than usual.

This year, the problem was further exacerbated by the war in Ukraine and the remaining effects of the pandemic, which led to high inflation rates, and driving up the price of energy, a report from The Week explained. 

Germany is turning to coal energy, since Russia has cut natural gas deliveries to Europe, and businesses and people are beginning to prepare for a cold and dark winter due to the high costs of heating and electricity. 

The effects of the energy crisis are also impacting other countries, as they work to support Europe. 

“The Canadian government is obviously committed to supporting its European partners. So whether you are on the receiving end, where you’ve got shortages or whether you have an opportunity to support such as Canada, I think collaboration is the second point that I would make,” Russell noted.

According to Russell, in Canada the intent to change and be more sustainable is present. 

At a government level, Canada is looking to achieve Net Zero Emissions by 2050 while also banning the sale of new fuel burning cars by 2035. 

But Russell also noted that while these are good initiatives, and Canada is heading in the right direction, it could do better. 

“We see their active investments around their sustainability strategies…But businesses need to lead the way here. We cannot wait for regulatory or other forums to drive this change,” he said.

He added that Canadian partners need to go from a priority to a reality, which means embedding the operational technology that allows business to track, manage and reduce carbon emissions to be able to create circularity within the company.

Russell suggested that it’s important for Canadian businesses  to debunk the myth that “profitability is impacted by sustainability.”

“We have increasingly seen where businesses can make profitability sustainable and sustainability profitable. They go hand in hand. Yes, it takes real focus, which means you’ve got to go from beyond reporting to managing your supply chains, managing your circularity to be able to then make it an embedded capability in your business. Technology works.”

He cited the shoe company Allbirds, which uses reusable materials from plastics and fossil fuels. Russell added that the company sources from renewable sources and distributes sustainably. Allbirds uses SAP’s platform as an enabling technology.

“T​​his example, if Canadian businesses did this at scale, I believe that we’d go from talking about sustainability to implementing and running more sustainably.”

Russell described a recent product the company launched called the Sustainability Control Tower, which is an example of how cloud technology can allow businesses to manage their risk with real time sustainable strategies. 

SAP says the Sustainability Control Tower enables businesses to transform into intelligent and sustainable enterprises based on financial as well as environmental, social, and governance (ESG) indicators, and allows companies to assess their global impact both within their operations and across their business networks.

Lastly, Russell talked about how the bottom line and the green line are not mutually exclusive.

“The operational rigor [for businesses] to manage their top line and their bottom line and the green line needs to be accelerated if we’re not only going to hit the overall goals, but we’re going to make sure that we do so in a faster way than what we’ve even reported and committed to.”

Businesses have been creating sustainability initiatives, but an initiative itself may not be enough. A 2021 article from Forbes highlighted a study which revealed that 65 per cent of companies have created a clear purpose statement around sustainability, while a further 23 per cent said they are in the process of doing so. However, creating a plan and actually executing it are two very different things.

“Leaders need to embrace sustainability and then step ahead of it,” Russell said.

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