New text classification capabilities can help automatically categorise thousands of lines of spend data using natural language processing (NLP).
IBM (NYSE:IBM) announced that it could help organisations accelerate the capture, calculation and analysis of Scope 3 GHG emissions through the integration of NLP in the IBM Envizi ESG Suite. The new text classification capabilities are designed to help enable a leap forward in efficiency and accuracy by helping organisations automatically ingest, organise and manage the spend data required for emissions calculations and external disclosures.
New findings released as a preview of the IBM 2023 Sustainable Business Snapshot, conducted by Morning Consult on behalf of IBM, revealed that there’s a perception gap among corporate sustainability professionals, including sustainability and IT decisionmakers. 93% of respondents think their company is somewhat or very mature in using data to track sustainability progress. But only 45% say they are ready to report on Scope 3 emissions.
IBM Envizi has been helping organisations to collect, calculate, analyse and report on GHG emissions for over a decade. IBM Envizi offers coverage for all 15 Scope 3 categories, using a calculation engine to apply GHG Protocol calculation methods that are underpinned by a robust data management system. It includes automated data capture, supplier survey data capture, Scope 3 emissions factor libraries, reporting framework templates, a dedicated Scope 3 analytics dashboard, audit tools and functionalities to support supplier benchmarking analysis.
The new functionality in Envizi helps address one of the key challenges organisations face with Scope 3 emissions, which is the categorisation of spend data drawn from financial or ERP systems.
With the addition of automated text classification using NLP, IBM Envizi can help streamline this process by aggregating, managing, categorising and preparing spend data, ultimately to help produce a unified and up-to-date dataset that maps to country and industry-specific emissions factors. To complement this functionality, IBM Envizi now includes an embedded spend-based emissions factor library that is harmonised across over 180 countries, creating uniformity in Scope 3 calculations for purchased goods and services. These datasets are designed to help organisations produce their emissions calculations quickly, accurately and efficiently.
“Growing regulatory requirements and external interests are driving organisations to disclose GHG emissions, including those from Scope 3,” said Christina Shim, Vice President and Global Head, Product Management and Strategy, IBM Sustainability Software. “As requirements increase and as organisations prioritise enhancing operational insights, so does the need for robust, auditable data management, calculation, and reporting processes. IBM Envizi is now integrated with the new capabilities to help organisations seamlessly garner insights from spend data to facilitate Scope 3 emissions calculations for ESG reporting.”
For example, a manufacturer may buy computer and electronic components from various suppliers. In one entry, these components may be recorded as ‘chips,’ and in another, they may be called ‘hard drives.’ Ultimately, they all need to be in the category of ‘computer and electronic components’ so the correct emissions factor can be applied. This application of text classification can help automatically categorise potentially thousands of lines of spend data, so teams can focus on higher value work.
IBM Envizi complements IBM’s existing portfolio of sustainability solutions and consulting expertise, including IBM Planning Analytics, IBM Supply Chain Intelligence Suite, IBM Maximo Application Suite, and IBM Turbonomic, that help organisations set, operationalise, and drive their environmental sustainability goals.
About the Authors
Associate Director, Investment Banking
Prachurjya has over 16 years of experience in investment banking with Acuity Knowledge Partners. At Acuity, he has led sector and product-specialist pilot teams across Capital Markets, ESG, Debt Advisory, Loan Syndications, Metals & Mining and Real Estate. He has been actively involved in setting up and on-boarding new ESG Advisory, ESG DCM and Sustainable Finance teams for various bulge bracket investment banks. Within DCM and Rating Advisory, he has been instrumental in helping the clients achieve over 30% in annual savings on both regular and adhoc tasks through standardization of the outputs and deployment of our proprietary BEAT tools.
Delivery Manager, Investment Banking
Puja has 7 years of extensive experience in ESG, Climate Change & Sustainability and she is supervising the ESG team at Acuity. She also has diverse experience in conducting ESIA, EHS compliance audits, ESG Risks and Controls, EHS & ESG Due Diligence assessments. Prior to joining Acuity, she was working with companies like KPMG Global Services, EY India and ERM India. She has expertise in provisioning extensive research requirements for clients through preparation of Peer Benchmarking, Target Compilation, Sustainability report, Sustainable Finance Updates and Sectoral ESG Thematic Detailing Engagement.
Connect with the experts at contact@acuitykp.com
