Why the digital transformation of industries is creating a more sustainable future

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

What should companies be thinking about, and what do they need to know, when it comes to achieving climate goals?

There are three things that companies need to know when it comes to setting climate goals. The first thing I would say is that if you're going to set a climate goal as a business, it needs to be a businesswide effort. It cannot live within just the corporate responsibility or the sustainability team as it often does. It really has to be incorporated across the entire company.

The second is that if a company is going to set a climate target, it needs to be able to commit budget and resources to meeting those goals. It can be expensive to incorporate these goals across operations, so that is something that companies need to be prepared for.

Finally, there must be room for creativity and flexibility. It’s important to recognize there are a lot of things we don’t know yet. You have to be able to jump in without knowing everything, which is hard for a lot of companies. It's risky, but ultimately worth it.

What's been the limiting factor to effect change and reach those goals?

Some of the rate-limiting factors are that all these companies are setting targets, whether or not they’re aligned with the Science Based Targets initiative, and everybody’s competing for renewable projects. But fundamentally the biggest challenge is that companies are trying to balance growing and turning a profit while also doing right by their stakeholders and the environment — but these two priorities are not yet weighted equally. We’re getting there, with shareholders and investors urging, but it’s not quite even yet.

What needs to change for it to be even?

Some things are happening already. Stakeholders are leading the charge here for more transparency and information around how products and services are made, for more data to be released publicly. Everyone from investors and shareholders to policymakers, employees and customers have interests here. How a company operates and how it makes its products are important questions, no matter the industry.

And how can technology help with that?

This is a big question. As a first step, companies need to look at the data and understand their sustainability baseline. For some companies, just getting their environmental data in order is a big undertaking, but you can’t really set a target until you know where you’re starting from.

Once a company understands its sustainability baseline, it is important to identify areas that the company can feasibly make more sustainable, and then address those areas. Implementing technology that improves connectivity and provides greater insight into operations will prove to be the solution for many companies. An example of this could be a manufacturing facility installing energy sensors into its machinery that can monitor energy consumption in real time and turn off different machines when not in use. Another example might be a farmer using drones for pesticide distribution. The drone collects and interprets real-time data, which allows for more efficient and accurate spraying so that crops are covered with less pesticide residue. It all comes down to digitization — as companies and eventually industries digitally transform, they will also become more sustainable.

What role does 5G play in combatting climate change?

5G is the core infrastructure to driving digital transformation, and as a result, will contribute in a significant way to combating climate change. We produced a U.S. report that highlights the many ways 5G technology can achieve critically needed sustainability benefits. The findings show that 5G will enable the reduction of 374 million metric tons of greenhouse gas emissions, save 410 billion gallons of water nationwide, reduce pesticide usage in the United States by 50% and increase fuel efficiency by 20% through optimized lane management systems and traffic management systems enabled by C-V2X. There are so many use cases that illustrate that when 5G is fully realized, it will help reduce emissions in massive amounts that will have an actual impact on the planet.

How has Qualcomm managed its own commitment to address climate change?

In 2014, we committed to a 30% greenhouse gas emission reduction goal for Scope 1 and Scope 2, which is tied to our own operations and the electricity we buy. Since committing to that goal, we have reduced our Scope 1 and 2 emissions by 20%. Last November, we took it a step further and set a net zero goal across Scopes 1, 2 and 3 by 2040, and we have interim targets set to align ourselves with the Science Based Targets initiative.

We were the first large cap semiconductor company to make a net zero commitment. We know the Earth’s population is growing: It's expected to grow from 7 billion to 10 billion people by 2050, which means there's going to be more energy being used. We set this goal to highlight that this an important issue and something we are prioritizing throughout the company. Things have to change, and we are doing our part to change the status quo.

What’s that journey been like?

It's been really incredible. We are focused on what we can do to reduce our own operational footprint and how we can help our partners across industries reduce theirs as well. Examples of this might be through leveraging 5G to digitally transform their business or developing energy-efficient products. What many people don’t know is that Qualcomm has been building energy-efficient products since our founding — power efficiency is in our DNA — so we are really well-positioned to play a larger role in the digital and green transformation of industries.

What's the one thing that companies implementing new technology to digitally transform their business and meet climate goals often overlook?

There is pressure to get things done quickly, but it’s important to pause and look at what makes sense for the business. Every company is different — what makes sense for Qualcomm, which is primarily fabless, may not make sense for another company with a huge manufacturing footprint. If you’re a retailer with a huge supply chain doing a ton of shipping, it’s a different model.

All of this goes back to sustainability and, frankly, ESG more broadly needing to be a businesswide effort, with people from across the company working on these issues. What makes sense for the tourism industry is not necessarily going to work for a semiconductor company. But both can reduce their footprint.

A fireside chat with Qualcomm youtu.be