Hotpot
The world is getting hotter. I think everyone is starting to feel this. Global Warming is talked about every day nowadays and its effects are starting to be felt. Coupled with the pandemic and war it looks like we must start growing all our own food and raising our own cows. The failure of wheat and sugar crops, the increasing prevalence of new or eradicated diseases reappearing, floods, and sea level increases everywhere. We may notice that the old films always feature a very futuristic future with flying cars and teleportation doors, while the films of our time are more filled with wars between galaxies, zombies, and destroyed worlds.
We are not completely do nothing. The world once released the Kyoto Protocol. The Kyoto Protocol is an international agreement that reduces carbon dioxide (CO2) emissions and the presence of greenhouse gases (GHG) in the atmosphere. An important principle of the Kyoto Protocol is that industrialized countries need to reduce their total CO2 emissions. The Kyoto Protocol was convened in 1997, signed by 150 countries, and claimed in 2012 to reduce 12.5% of GHGs from binding countries' 4.7% reduction target. This claim was disputed by several parties who said that the 12.5% reduction was not due to countries implementing emission reduction measures, but because of the problem of the breakup of the Soviet Union. However, what can be stated with certainty is that since 1990 world CO2 emissions have increased by a staggering 51%. Furthermore, an alarming 42% of the world's CO2 emissions come only from the United States and China – two countries that are not signatories to the Kyoto Protocol.
After the Kyoto Protocol, we have the Paris Agreement. The 2015 Paris Agreement sets out the global framework for avoiding dangerous climate change by limiting global warming to below 2°C and pursuing efforts to limit it to 1.5°C. It also aims to strengthen the ability of countries to deal with the impacts of climate change and support their efforts. The Paris Agreement is the first legally binding universal global climate change agreement, adopted at the Paris climate conference (COP21) in December 2015. More fully, the Paris Agreement not only requires emission reductions but also emphasizes Transparency and global inventories. The results are quite encouraging. There are also signs that the expected temperature spike by the end of the century is easing slightly. Prior to the 2015 Paris summit, global emissions were on track to push temperatures to 3.5 °C by 2100, according to estimates by Climate Action Tracker, a nonprofit science consortium. Now, the track has leveled off to 2.9°C. It's just that we'd be fine with a 1.5°C temperature increase instead of 2.9°C. We are now at 1.1°C. We don't have much time. Everything we do has a good impact, but sadly it's not enough.
Green Trend
One thing that is still cherish us is the awareness to be “green” in general. Several countries and multinational companies have started implementing Green Procurement practices. The green economy trending keyword is still positive on Google Trends. The Green Technology and Sustainability Market is predicted to grow at a CAGR of around 26.4%. Standard Chartered said Multinational Company (MNC's) approach today could create a USD 1.6 trillion opportunity for a net zero carbon club, namely companies that reduce emissions in line with MNC's net zero carbon plan. This is a great opportunity for companies to focus on net zero carbon in the countries in this study, but it also measures the potential disadvantages for companies not implementing a net zero carbon transition.
Most MNCs are headquartered in developed western countries, but many of their suppliers are in emerging or rapidly growing markets. A focus on supply chain emissions shifts net zero pressure from west to east, and from large to small companies putting significant pressure on organizations that may be least prepared for the transition. MNC is aware of this. Nearly two-thirds believe that emerging market suppliers will struggle more than their developed market counterparts to meet reduction targets, and 57 percent are preparing to replace some of their emerging market suppliers with developed market alternatives to hit zero. This continues to increase to 78 percent by 2025.
Unfortunately, we still have another problem, namely Greenwashing. Greenwashing is a troubling trend that deceives consumers into thinking that what they are buying is sustainable or environmentally friendly when the opposite is true. Measurement, Reporting and Verification (MRV) has emerged as one of the key issues in the transition to a net zero business. MRV creates integrity on the green world. Solution needed to measure carbon emission specially on the Scope 3 carbon emission: the process of delivering goods in and out by third parties using any mode of transportation, employee business trips by airplane-train-car that are not owned by the reported company.
Inclusive Visibility that Supported by Industry
It is interesting to conclude a few things for us to bring forward. The problem of Global Warming is a problem of externalities. Externalities pose fundamental economic policy problems when individuals, households, and firms do not internalize the indirect costs of or the benefits from their economic transactions. The resulting wedges between social and private costs or returns lead to inefficient market outcomes. Because there is no world-class supremacy capable of enforcement, the problem of externalities is indeed difficult to overcome. This is because there is usually a Free Rider Problem. This can be seen in the Kyoto Protocol. Although the program produced good results, it failed in reducing emissions.
We can't force Free Rider to suddenly contribute, at least now. The solution is to create green economy inclusion. This inclusion has two parts: low carbon benefits and carbon measurement with integrity. Low carbon benefits can be obtained with carbon tax regulations and carbon trading, but they will not have a good impact without the inclusion of carbon measurements. And when we talk about carbon measurement, we can't necessarily talk about digitizing businesses.
Digitizing businesses, especially in Indonesia, is a challenge. Indonesia has a lot of MSMEs. According to data from the Ministry of Cooperatives and SMEs, MSME business sectors contribute to 61.97 percent or Rp. 8.6 trillion on all Indonesia GDP. Indonesian MSMEs contributed to absorbing 119.6 million or 96.92% of the total workforce in Indonesian business units. Nowadays Indonesia MSMEs digitalization only reach 20%. So, we must think about how to digitize 80% of MSMEs if we want to get inclusive carbon tracking.
Creating an Inclusive Green World
Imagine you could integrate your supply chain with your vendor as easy as connect to your friends or colleagues on Facebook or LinkedIn. We are offering a Global Integration Platform that enable vendors and customers to collaborate their entire supply chain primary data as easy, as reliable, as possible
We offer a comprehensive and ready-to-use supply chain platform. Users can get an immediate carbon emission calculation when they adopt supply chain solutions into their business processes. In our opinion, this solution is more able to solve problems in emerging economies because:
The process is simple, so the onboarding process is easy
Users don't have to be interested in carbon emissions and spend resources and time only on calculating carbon emissions. Users enjoy increased logistics efficiency and effectiveness as well as decreased fraud directly.
We are developing Supply Chain Carbon Tracking Ecosystem to help companies, mainly targeted MNCs and verticals now, to do an automated Carbon Footprint tracking in collaboration with their vendors, that mainly MSMEs, using primary data (IoT + Bill). There are four layers in our product. These layers sequentially represent the track (!), report (2), verify (3), and connect (4). User will use our track layer in their day-to-day activity. We then help them analyze their carbon emission by report layer. The result of the analysis then verified on the next layer. Then finally it could connect to external database. In our premises, we only will success in controlling Carbon emission when Inclusive Green World successfully established. In a growing economy like Indonesia, it means do digitalization and carbon measurement in a bundle.
Contact us for more!
Alfons Tefa (CEO) | alfons@automa.id | 6281228001114
ARTICLE WRITTEN BY: ALFONS TEFA
Alfons Tefa is the Founder & CEO of Automa Supply Chain.
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