Horizon Pulp & Paper Ltd.

AI Reshapes Packaging Value Chain for Sustainability

Nikhil Krishnan — Thu, 26 Jun 2025 13:12:15 +0000

In our previous blog article on combining Digital and Sustainability transformations, we shared how aligning both strategies can unlock greater value for businesses.

Within the digital context, the impact of Artificial Intelligence (AI) on industrial future has been frequently discussed.

If used correctly, AI can be a powerful enabler of shared value for businesses, customers and the Environment.

This is because AI can analyze vast amount of data to carry out complex tasks – aiding businesses in making better, faster and more sustainable decisions.

The following are some of the ways AI can reshape packaging value chain for a low carbon future:

Optimization for Operational and Sustainability Excellence

Generative AI can help identify opportunities for reducing waste, emission and resource use in a supply chain through optimization algorithms.

For example, AI can help automate systems’ energy consumption by forecasting demand and adjusting energy supply using weather patterns and energy usage trends – thus, improving energy efficiency. [1]

AI can also help improve recycling processes during production and support circularity by designing reuse and recycling solutions for end of product life cycles.

AI is leading a new age of industrial efficiency which leads to cost efficiency and improved sustainability performance.

Enhanced Customer Experience for a Low Carbon Future

AI can map customer experiences and devise solutions for enhancing customer experience at each brand touchpoint.

Packaging itself is an important touchpoint for the end customer. AI algorithms can help improve packaging design to improve user experience – creating benefits for the entire downstream value chain. AI can also identify optimal material structures and composition for packaging design to reduce Environmental impact.

Thus, AI can enhance customer value and Environmental value.

AI still requires Human Touch

A core idea in Toyota’s lean manufacturing philosophy is ‘Jidoka’ – which translates to “automation with a human touch”. It allowed machines and operators to work together towards identifying and solving problems [2].

Similarly, people are still required to provide quality data for AI. While AI can provide ideas and structure for a solution, we humans need to verify the solutions and apply the right solution for the right context. AI models are known to consume vast amount of energy. Therefore, it is in our hands to use AI efficiently and purposefully towards solving complex problems.

In conclusion, AI can enhance customer experience and sustainability in the packaging value chain. However, its real power lies in collaboration with humans. Humans and AI need to work together in solving complex problems.

As we move forwards, we should ask ourselves: How can we combine Artificial Intelligence with the sound judgement of people to build a sustainable future?

References

“The CEO’s Guide to Generative AI: Sustainability”. Link
Kaizen Institute. “Jidoka: The Foundation of Automation with a Human Touch”. Link

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Digital and Sustainable Transformation create greater value when combined

Nikhil Krishnan — Fri, 26 Jul 2024 11:21:49 +0000

The global business landscape has entered two paradigm shifts:-

Industry 4.0, which is underlined by digitization of industries and leveraging of data analytics, automation and disruptive technologies.
The need for Climate oriented solutions which mitigate the increasing impact of climate change.

Digital transformation and sustainable transformation are equally essential for businesses to remain competitive, create value and contribute to economic growth.

Digital and sustainable transformations can be effective drivers of:

Value creation: Digitization allows for better understanding of value required by a stakeholder. It also allows for better, faster and easier delivery of value. A sustainability strategy holistically considers long term impact on all stakeholders including the Environment and society towards creating shared value.
Innovation: Digital and sustainability promote new approaches to solving problems, creation of new business models, as well as new skills. [1]. They also foster opportunities for open innovation and collaboration.

Both transformations present several opportunities for businesses.

Moreover, businesses formulate more effective solutions when they combine digital and sustainable transformation strategies.

These strategies have the power to strengthen and complement one another.

According to the United Nations Environment Programme (UNEP), there are two approaches to combining digital and sustainable transformation:-

1. Digital technologies can be used towards achieving sustainability goals. UNEP defines this approach as Digitalization for Sustainability. [2]

2. Sustainability can be considered in design, development and usage of digital technologies. UNEP defines this approach as Sustainable Digitalization. [2]

How can digital technologies help in achieving sustainability goals?

Digital technologies advance sustainability in various aspects of global value chain as follows:-

Sustainable product design:

Digital technologies provide unprecedented access to information and data-driven analytics. These can be used to implement circularity in design decisions such as choice of material, functionality and length of life cycle.

Digital twins can be used to test sustainability KPIs of product designs efficiently. For example, Schneider Electric builds digital twins of its medium- and low-voltage switchgears to carry out simulations and analyze possible performance over the product lifecycle.

The design is then adjusted to meet desired sustainability KPIs accordingly prior to manufacturing. [3]

Responsible supply chain:

Digital data driven insights can help create a climate-resilient and responsible supply chain. According to IBM, generative AI can help identify opportunities for waste and emission reduction in a supply chain through optimization algorithms. [4] Another example is of Dutch chocolate company Tony Chocolonely which uses a cloud-based platform named Beantracker to ensure traceability in their supply chain. The platform tracks the supply of cocoa beans from West Africa to the company’s production facilities in Europe, helping Tony Chocolonely create a responsible supply chain.[5]

Digital makes global supply chains visible. This enables transparency – a key factor for sustainability and performance improvement.[6]

Increased production process & resource efficiency:

Digital organization and visualization of vast amount of data make it easier for businesses to analyze their processes and resource efficiency. This helps businesses make better decisions towards improving efficiency.

Automation and digital sensors also help improve energy and resource efficiency by automatically addressing inefficiencies in resource consumption and processes.

Horizon Pulp & Paper Ltd.’s Biomass powered Combined Heat & Power Plant is fully automated – helping improve resource and energy efficiency. The entire plant is operated by one person who makes decisions based on data insights on a visualization platform in the control room.

Fostering an inclusive economy:

Digital platforms can bring down barriers and allow previously marginalized groups to participate in the global economy. E-commerce platforms have created access for rural Micro-, Small, and Medium sized Enterprises (MSMEs) to global marketplaces. E-payment platforms have paved way for financial inclusion.

While digital technologies help advance sustainability goals, they could also have counterproductive effects on sustainability. Emissions due to high energy consumption and governance risks are some of the most common counterproductive effects.

Dr. Tilmann Santarius, professor of Socio-Ecological Transformation and Sustainable Digitalization at Technische Universität Berlin, states the following in a TED Talk:

“As much digitalization as necessary and as little as possible” [7]

While digitalization is imperative, the design, development and use of digital technologies should be carried out with sustainability, efficiency and responsibility in consideration.

How can Sustainability be considered in designing, developing and using digital technologies?

Some ways to incorporate sustainability in digital technologies are:-

Green computing

Green computing is the practice of designing, manufacturing and using digital technologies towards consumption of less energy. There are several actions that can be carried out as part of green computing. Green coding, for example, refers to writing code for software in a way that the software, once developed, consumes minimum energy possible when used.[8] Cloud computing, when carried out correctly, can reduce the amount of data transferred over a network – thus reducing energy consumption of the network. Use of Renewable energy to power IT infrastructure components such as data centers will also reduce emissions.

Optimized use of digital technologies

Use of digital technologies should be managed in a way that they are utilized only when it is required. The frequency and amount of data transfer and storage should be carried out optimally and efficiently.

Consideration of governance and inclusion principles

Digital technologies such as AI can lead to governance related risks such as algorithmic biases, data misuse and mass surveillance if equity and fairness are not considered in the development and use stages.[9] For example, Dutch government’s AI-oriented welfare fraud detection system, Systeem Risico Indicatie (SyRI), had biased algorithms targeting lower socio-economic status and minority-background neighbourhoods.[10] SyRI was eventually deemed unlawful in Dutch courts for non-compliance with the right to privacy under European Convention of Human Rights.

Governance gaps and principles of inclusion should be considered during the development and use of digital technologies.

To conclude, Digital and Sustainable transformations offer various opportunities for businesses. By combining the two transformations, businesses can potentially maximize the advantages and minimize risks presented by the two transformations.

The future lies in enacting a dual approach of Digitalization for Sustainability and Sustainable Digitalization. This dual approach should be ingrained in the organizational culture and decision-making process.

References

[1] Robertsone, G. and Lapiņa, I. (2023) ‘Digital Transformation as a catalyst for sustainability and open innovation’, Journal of Open Innovation: Technology, Market, and Complexity, 9(1), p. 100017. doi:10.1016/j.joitmc.2023.100017.

[2] Digitalization for Sustainability. UNEP. Available at: https://www.unep.org/topics/digital-transformations/digitalization-sustainability (Accessed: 12 July 2024).

[3] Thierry Cormenier (2024). How digital twins drive more environmentally conscious medium- and low-voltage equipment design. Schneider Electric Blog. Available at: https://blog.se.com/sustainability/2024/03/14/how-digital-twins-drive-more-environmentally-conscious-medium-and-low-voltage-equipment-design-2/ [Accessed 12 Jul. 2024].

[4] Ramos, M. (2024). How generative AI will revolutionize supply chain. [online] IBM . Available at: https://www.ibm.com/blog/how-generative-ai-will-revolutionize-supply-chain/.

[5] Binder, J. and R. Wade, M. (2024). Digital sustainability: The new frontier for greener technology and business. I by IMD. Available at: https://www.imd.org/ibyimd/sustainability/digital-sustainability-the-new-frontier-for-greener-technology-and-business/.

[6] Binder, J. and R. Wade, M. (2024). Digital sustainability: The new frontier for greener technology and business. I by IMD. Available at: https://www.imd.org/ibyimd/sustainability/digital-sustainability-the-new-frontier-for-greener-technology-and-business/.

[7] Santarius, T. (2021). Smart green world? Making digitalization work for sustainability. TED. Available at: https://www.ted.com/talks/prof_dr_tilmann_santarius_smart_green_world_making_digitalization_work_for_sustainability?subtitle=en [Accessed 12 Jul. 2024].

[8] IBM Cloud Education (2023). Why Green Coding is a Powerful Catalyst for Sustainability Initiatives. IBM . Available at: https://www.ibm.com/blog/green-coding/.

[9] Schoemaker, E. (2024). A Shared Vision for Digital Technology and Governance: The role of governance in ensuring digital technologies contribute to development and mitigate risk. New York: United Nations Development Programme.

[10] van Bekkum, M., & Borgesius, F. Z. (2021). Digital welfare fraud detection and the Dutch SyRI judgment. European Journal of Social Security, 23(4), 323-340. https://doi.org/10.1177/13882627211031257.

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Wellbeing Economy: the way forward for businesses

Nikhil Krishnan — Wed, 11 Oct 2023 11:12:36 +0000

Wellbeing of businesses is dependent on the wellbeing of people and planet.

This has been made clear by the current climate crisis.

Extreme heat in Europe during this summer led to work stoppages, employee strikes and health issues for workers. Abnormal forest fires, floods and droughts disrupted people’s lives, businesses’ supply chains and the economy.

Why does climate change affect businesses?

Businesses rely on the Environment for raw materials & resources to produce goods and services, and reliable supply chains.

Businesses rely on society for people to operate businesses. Ultimately, businesses serve the needs of people and society.

A disruption in the Environment leads to:

disruption in availability of quality raw materials
disruption in business supply chains
poor quality of products/services
increased costs
adverse impact on people’s health – leading to disruption in workforce

In other words, a disruption in the Environment leads to disruption in the economy and society.

Climate change therefore is not just an environmental problem. It is also a business and social problem.

The traditional economic model that prioritizes rapid economic growth at the expense of the Environment and Society is not viable. This model in turn does damage to Economy in the long term. Traditional metrics such as gross domestic product (GDP) fail to capture this aspect.

A viable economic model going forward is one that also creates long term prosperity for the Environment and Society.

What is Wellbeing economy?

Wellbeing Economy is defined as “an economy designed to serve people and the planet”. [1] In such an economy, business activities and solutions are people-centric and aim to preserve or regenerate the Environment. It aims to create long-term wellbeing for all. This approach leads to:

Opportunities in business innovation
Better management of climate risks through climate adaptation and mitigation
Resilient supply chains
Reduced costs
Customer trust
Engaged employees and communities

Both new and well established businesses alike can help create a wellbeing economy.

How can businesses contribute towards creating a well-being economy?

Businesses should re-examine and map their value chain to understand how current practices could be creating or destroying value for environment and society. The value chain has two sides:- supply and demand side.

The supply side concerns businesses’ sourcing, production, and provision of goods & services. To create wellbeing for people and planet on the supply side, businesses should ask themselves about negative impacts created on environment and society and eliminate such impacts. Businesses can:-

Design products in a way that they use less materials.
Work with supply chain partners towards lowering Environmental impact and ensuring fair treatment of all workers and employees throughout the chain.
Reengineer production processes to make them resource and energy efficient.

The demand side concerns consumption and disposal of products after consumption. To create wellbeing for people and planet on the demand side, businesses should ensure that their products/services are designed in a way that they can be consumed and disposed of easily without creating adverse Environmental and health impact. Businesses can recreate their product portfolio to include products/services that have positive environmental and social impact.

For the entire value chain, businesses can think about how they can innovate to further serve the needs of all stakeholders.

To conclude, businesses should realize that they ultimately serve citizens. Citizens have a right to good health, safety, and dignity. By internalizing this truth and serving the needs of citizens, businesses can act in a way that ensures that they create wellbeing for people and the planet.

References

[1] What is a wellbeing economy? Wellbeing Economy Alliance. Available at: https://weall.org/what-is-wellbeing-economy (Accessed: 11 October 2023).

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Renewable Energy is key in fighting the climate crisis

Nikhil Krishnan — Mon, 27 Mar 2023 07:37:16 +0000

In January 2022, we had written how widespread adoption of renewable energy is the only way for the EU to overcome its energy crisis responsibly. It is also the only way to avoid another such crisis in the future. This assertion stands even more true a year later as the EU rushes to accelerate the green energy transition by adopting renewables.[1]

Even more importantly, adoption of renewable energy is essential in fighting the climate crisis which is already having a devastating impact on our planet and people.

Fossil fuels are the primary cause of climate change. Fossil fuels account for “75% of greenhouse gas (GHG) emissions and nearly 90% of all carbon dioxide emissions.” [2] Renewable energy, on the other hand, has a significantly lower carbon footprint and can help cut emissions drastically.

Renewable energy will aid in decarbonizing our economy to achieve the net carbon neutrality required to sustain our planet.

In addition to low carbon footprint, there are other incentives for adopting renewable energy:

It is cheaper – The cost of renewable energy sources is now cheaper than fossil fuel sources. This makes renewables a feasible option for even low- and middle-income countries worldwide.[3]

2. It is implementable – Renewable energy sources are already around us. Thanks to rapid technological advancement, it is possible to implement renewable energy production conveniently and efficiently.

3. It improves air quality – Replacing fossil fuels with renewables would reduce the air pollution caused by fossil fuel related emissions. Thus, it helps purify the air and make it healthier.

4. It creates new career opportunities – Adoption of renewable energy would create three times more jobs than the fossil fuel industry, leading to a net increase of nearly 9 million jobs.[4]

There are a variety of options for renewable energy generation:

1. Solar: Solar energy is generated using sunlight, an abundant energy source. Sunlight is converted into electric energy through photovoltaic panels. Since 2010, the cost of solar power has fallen by 85% – making solar one of the most popular and economically feasible choices for energy generation.[5]

2. Wind: Wind turbines, on land or sea, harness the kinetic energy of wind to create electricity. Wind energy also finds use in agricultural settings. Stationing of wind turbines in agricultural fields has proven to improve crop yields.[6]

3. Hydropower: Hydro-electric power is generated by harnessing the kinetic energy of flowing water streams and converting it into electricity using a turbine and generator. It is one of the oldest methods of electricity generation. Hydro power generation facilities do not necessarily have to have dams. Even small size hydro power generation facilities can have a sizeable impact.

4. Geothermal: Geothermal energy is generated using heat that is extracted from within the Earth’s depths. This heat is converted into steam which is in turn converted into electricity using a turbine and generator. A notable advantage of geothermal energy is that it can operate throughout the year at high-capacity factors. [7]

5. Biomass: Biomass energy is generated using organic biomass materials such as plants, agricultural crops, wood, forest residues etc. Biomass stores energy from the sun through photosynthesis. When biomass is burned it generates green energy.

6. Renewable green hydrogen: An alternative to fossil based natural gas, green hydrogen is produced when renewable energy splits water into oxygen and hydrogen through the process of electrolysis. The green hydrogen gas is then stored and transported to its destination to be used as a fuel. Green hydrogen can be used in a variety of sectors including industrial, power and transportation. The long term and large-scale storage potential of renewable green hydrogen is its key advantage.

With various options available that are technologically and economically feasible, now is the best time for industries to invest in renewable energy.

Horizon started investing in renewable energy sources as an alternative to fossil fuels during the previous decade. As a result, Horizon’s renewable energy share of total energy consumed for manufacturing its paper products is 80% – far ahead of the EU target of 32%.

References:

[1] Ellerbeck, S. (2023) Can Europe’s rush for renewables solve its energy crisis?, World Economic Forum. World Economic Forum. Available at: https://www.weforum.org/agenda/2023/02/eu-renewables-energy-crisis/ (Accessed: March 9, 2023).

[2], [3], [4], [5] Renewable energy – powering a safer future. United Nations. Available at: https://www.un.org/en/climatechange/raising-ambition/renewable-energy (Accessed: March 9, 2023).

[6] Kaffine, D.T. (2019) “Microclimate effects of wind farms on local crop yields,” Journal of Environmental Economics and Management, 96, pp. 159–173. Available at: https://doi.org/10.1016/j.jeem.2019.06.001.

[7] Geothermal energy (no date). International Renewable Energy Agency . Available at: https://www.irena.org/Energy-Transition/Technology/Geothermal-energy (Accessed: March 9, 2023).

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Loss of Biodiversity is a business crisis. What can businesses do about it?

Nikhil Krishnan — Mon, 27 Feb 2023 08:58:46 +0000

United Nations Environment Programme defines Biodiversity as “the variety of life on Earth and the natural patterns it forms”.[1] It includes elements of nature at ecosystem, species, and genetic levels upon which the planet depends on. Humans depend on biodiversity for food, water, and medicines including nearly 70% of drugs used for cancer treatment. [2] The level of biodiversity often indicates the health of an ecosystem.

Unfortunately, we are witnessing a catastrophic loss of biodiversity due to human and industrial activity. While it is well known that loss of biodiversity threatens human welfare, businesses may not realize that loss of biodiversity also affects them adversely.

How does loss of biodiversity impact businesses?

Businesses rely upon biodiversity for their day-to-day activities. Loss of biodiversity disrupts the natural, social and human capital which businesses depend upon.

Biodiversity ensures a natural system wherein processes such as waste decomposition, water purification and crop pollination take place. These natural processes provide businesses with quality, clean raw materials and resources.

Loss of biodiversity therefore destabilizes this system leading to poor quality raw materials, resources, and supply chain disruptions for businesses. Several food industries can potentially collapse due to poor quality crops.

Biodiversity is strongly linked with climate resilience as it offers carbon sequestration. Biodiversity loss therefore leads to removal of carbon absorption systems present in nature. This in turn contributes towards climate change and increases climate risks and costs for businesses.

Poor quality food, unsanitary water, extreme climatic conditions lead to social unrest and anxiety. This in turn adversely affects stakeholders such as employees, customers and communities. Progress on several Sustainability Development Goals (SDGs) adopted by businesses which address hunger, health, clean water, climate action, life on land and water etc. is severely impeded as a result.

According to the World Economic Forum, more than half of the World’s GDP depends on nature. [3] Therefore, high business costs are linked to loss of biodiversity.

What can businesses do to help in conservation of biodiversity?

Every problem has an opportunity. The biodiversity crisis also offers opportunities for businesses.

Businesses should realize that by considering biodiversity protection in their strategies, they will only make their value chain more resilient. They should also recognize that biodiversity is intertwined with climate change and that preservation of biodiversity will lead to climate resilience. Therefore, the first step for businesses would be to make an assessment on their impact on biodiversity.

More than 400 businesses and financial institutions from 56 countries have supported mandatory biodiversity assessments and disclosures by 2030 at COP15, the UN biodiversity conference held in December 2022. [4] Now is the time for businesses to start making assessments of their impact on biodiversity.

Based on such assessments, businesses can create unique strategies to reduce their impact on biodiversity. For example, if a business’s activities are linked to forest, it can focus and work towards having minimum impact on forest biodiversity. Businesses can set targets aligned with local regulations and strategies such as the EU Biodiversity strategy for 2030 to monitor and manage their progress.

Businesses can also collaborate with other stakeholders dedicated to preservation of biodiversity. For example, the sourcing arm of British supermarket chain ASDA works with local government institutions, scientists, schools, and communities to help preserve biodiversity in Costa Rica through reforestation. [5]

In conclusion

Biodiversity loss has a direct impact on businesses. Businesses should take into account their impact on biodiversity in their strategies and take action accordingly to reduce their impact. This will improve their value chain resilience and help contribute towards climate resilience.

Forest is an important natural source of raw material for Horizon. Horizon’s paper products are manufactured using raw material sourced from responsibly managed forest only which ensure ecological preservation. Our products are recyclable, renewable, reusable and biodegradable – creating positive impact on nature. Through responsible use of wood biomass for renewable energy production, Horizon also contributes to forests’ value chain and phasing-out of fossil fuels.

References:

[1] UNEP and Biodiversity. UN Environment Programme (UNEP). UN Environment Programme (UNEP). Available at: https://www.unep.org/unep-and-biodiversity (Accessed: February 20, 2023).

[2] Why we need to fear the loss of biodiversity as much as climate change (2022) YouTube. Deutsche Welle (DW). Available at: https://www.youtube.com/watch?v=uR9YDrrYAqA (Accessed: February 20, 2023).

[3] Half of World’s GDP Moderately or Highly Dependent on Nature, says New report (2020) World Economic Forum. 19 January 2020. World Economic Forum. Available at: https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report/ (Accessed: February 20, 2023).

[4] Make it mandatory. Business For Nature. Available at: https://www.businessfornature.org/make-it-mandatory-campaign (Accessed: February 20, 2023).

[5] ASDA: co-operating for biodiversity. Cambridge Institute for Sustainability Leadership. University of Cambridge. Available at: https://www.cisl.cam.ac.uk/business-action/business-nature/natural-capital-impact-group/doing-business-with-nature/business-and-biodiversity/pages/asda-cooperating-for-biodiversity (Accessed: February 20, 2023).

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COP27 failed to pave way for decarbonization. But hope is not lost yet.

Nikhil Krishnan — Thu, 01 Dec 2022 12:52:58 +0000

Decarbonization and emission reduction are vital to avoid a climate catastrophe.

While the recent COP27 conference closed an important deal on loss and damage fund, it failed to establish a way forward for decarbonization. The conference reflected a general shift from focusing on mitigating climate change towards focusing on living with extreme climate conditions. It reflected a mindset that it is already too late to prevent an increase of temperatures by 1.5 degree Celsius.

Does this mean business sectors should give up on decarbonization and emission reduction?

Absolutely not.

While adaptation to a changing climate is important, mitigation to prevent further climate change is just as essential. Focus on emissions reduction is crucial to prevent temperature increase by not only 1.5 degree Celsius, but also by a more perilous 3 degree Celsius.

It is important to remember in case temperatures rise by more than 1.5 degree Celsius, current disruptions in weather cycles and biodiversity would worsen. This would only lead to further economic and social disruptions.

In case temperatures rise by more than 3 degrees Celsius, there will be catastrophic consequences.

Is all hope lost?

Fortunately, no.

There are already solutions available to reduce industrial emissions. Moreover, 2022 has also indicated that the world’s biggest greenhouse gas emitting regions are taking climate action seriously as they face an energy crisis. It is being recognized that climate action is directly linked to economic prosperity. Businesses are incentivized to take climate action.

If we take timely actions towards emission reduction, we still have a chance to prevent a temperature increase by 1.5 degree Celsius.

We need a change in mindset

A change in mindset is required to work towards emission reduction. We need to recognize that solutions already exist to reduce human induced emissions and it is possible to drastically reduce emissions. Business sectors can play a key role in emissions reduction. Common solutions to reduce emissions include:

– Rapid ramp-up of renewables over fossil fuels

– Increasing energy efficiency

– Investing in carbon capture systems

– Investing in ecosystem conservation

It is also important to note that the lower cost of renewables has made renewables a more feasible option over fossil fuels.

The United Nations Environmental Programme (UNEP) had outlined a six-sector solution in 2020 which can reduce more than 30 Gt of emissions required to limit the temperature increase by 1.5 degree Celsius. It is a helpful guide for different sectors in effectively decreasing emissions.

We need ambitious targets and bold action

As we witness devastating impact of climate change on our lives, the planet, and the economy, it is now more important than ever to create strategies with ambitious decarbonization targets. Only with ambitious targets can we strive to impactfully reduce emissions and demonstrate that it is indeed possible. The private and public sector should be bold in their climate action. COP27 showed that the world still hesitates to phase out fossil fuels in favor of renewable energy. That must change.

We need to keep talking about climate change

One reason for government actors’ increasing alignment of climate policy with economic policy is that people’s support for climate action has increased. The more people talk about climate change, the more we formulate ways to implement available solutions and encourage bold climate action.

Horizon has decreased emissions by 82% since 2010 levels. As a result, it is far ahead of the EU 2030 target for emission reduction. Horizon also has an 80% renewable energy share of total energy consumed in production. Having embedded sustainability in its core business strategy following the Paris Agreement, Horizon has been able to demonstrate that impactful climate action by a business is possible.

References:

United Nations Environment Programme (UNEP) (2020) The six-sector solution to the climate crisis, Available at: https://www.unep.org/interactive/six-sector-solution-climate-change/ (Accessed: 30 November, 2022).

Katherine Lake (2022) ‘COP27 was disappointing, but 2022 remains an historic year for international climate policy’, The Conversation, 28 November, 2022.

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Climate change Adaptation or Mitigation? What should businesses focus on?

Nikhil Krishnan — Mon, 21 Nov 2022 09:38:27 +0000

The ongoing climate change is already making a noticeable impact on our daily lives.

Along with governmental actors and financial institutions, businesses have been preparing to address climate change issues.

When creating a sustainability strategy to address this issue, businesses may come across two different terms: climate change adaptation and mitigation. There are two aspects of climate change issues all sectors must consider in their response:

1. Changed climate patterns and damage already done which we must adapt to. (Adaptation)

2. Potential worsening of climate change in the future which we must prevent. (Mitigation)

Both problems are equally important to ensure long term survival.

In fact, the World Economic Forum’s 2022 Global Risks Report identifies “failure of governments and businesses to enforce, enact and invest in effective climate change adaptation and mitigation measures” as a major risk.

Thus, all sectors including businesses must use a dual approach that combines both adaptation and mitigation to address climate change.

Let us look closer at what adaptation and mitigation entail.

What is climate change adaptation?

Adaptation involves adjusting to present climate conditions as well as expected conditions in the future. Its main objective is to manage risks or potential disasters arising from imminent change in climate while ensuring continued operation of the business.

Businesses should carefully assess and identify potential risks unique to their organizations and plan on how to address these risks. For example, there could be an operational risk or threat to well-being of employees due to significant change in temperatures. The organization could accordingly build climate resilience systems or infrastructure to address such risks.

What is climate change mitigation?

Mitigation involves preventing further climate change by dramatically reducing carbon footprint. Successful mitigation can be achieved by:

– Reducing GHG emissions through reengineered processes and efficient technologies.

– Enhancing natural carbon sinks such as forest which help store carbon

– Investing in renewable energy as an alternative to fossil fuels

– Using carbon capture and sequestration systems

– Increased energy efficiency

A dual approach

In a business’s sustainability strategy, both adaptation and mitigation measures begin complementing each other overtime.

This dual approach provides the following benefits and opportunities for a business organization:

– Cost reduction

– Liability management

– Building climate resilience

– Conservation of natural resources

– Increased efficiency and competitiveness in the market

– Opportunities to enter new markets

– Creation of shared value with stakeholders

– Good corporate citizenship

Horizon has invested in both adaptation and mitigation measures to address climate change. As a result, some of Horizon’s accomplishments include, among others, outperforming EU 2020 Climate and Energy Targets in 2020. It was also awarded Contributor of the Year in 2021 for improving Environmental, economic, and social well-being of local community of Harjumaa in Estonia.

Horizon has outlined a clear path towards meeting EU 2030 Climate and Energy Targets. It has already met most of the targets and is on track to meet remaining targets before 2030.

References:

World Economic Forum (2022) The Global Risks Report 2022, 17th Edition, Cologny/Geneva: World Economic Forum. Link: https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2022.pdf (Accessed: 15 November, 2022).

NASA (2022) Responding to Climate Change, Available at: https://climate.nasa.gov/solutions/adaptation-mitigation/ (Accessed: 15 November, 2022).

United Nations Global Compact and United Nations Environment Programme in cooperation with the CEO Water Mandate (2022) Business and Climate Change Adaptation: Toward Resilient Companies and Communities (Caring for Climate Report), UN Global Compact and UN Environment Programme. Available at: https://www.iccr.org/sites/default/files/resources_attachments/businessandclimatechangeadaptation.pdf (Accessed: 15 November, 2022).

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Climate anxiety is affecting businesses. But it can be overcome with action.

Nikhil Krishnan — Thu, 13 Oct 2022 10:33:58 +0000

Climate change is already taking place. So is climate anxiety among people.

What is climate anxiety?

Climate anxiety (or eco-anxiety) arises from worrying about climate change and its effects on our daily lives. It affects our mental health and could lead to depression, difficulty in concentrating, increased stress levels or behavioral disorders. It could be caused directly by climate change (for example extreme heat, floods) or indirectly through issues caused by climate change (for example climbing energy prices or water shortages).

Young people have been particularly affected by this phenomenon. A medical journal research study surveyed 10,000 people aged 16-25 years in ten countries about climate change. It found that 59% were extremely worried while 84% were at least moderately worried. 45% of those surveyed were worried to the point of struggling with daily functional life. [1]

Young people however are not the only ones affected. As per a UK research, older people are also increasingly worried about climate change. [2]

How does climate anxiety affect organizations?

People are the heart and soul of business organizations. When climate anxiety affects mental health of employees, it affects their performance and hence that of the organization. Employees could feel hopeless and disengaged at their workplace. Even business leaders can feel hopeless in the face of disruptions brought on by climate change, which affects their ability to take decisions. Moreover, climate change poses economic costs for businesses which affect day to day operations as well as long term goals.

How can organizations deal with climate anxiety?

Firstly, employees should recognize that having climate anxiety is absolutely normal. They should validate their feelings and concerns. They should share their feelings with fellow colleagues. Organizations should prioritize employees’ mental health and factor in climate anxiety when evaluating climate risks in their business strategies.

Secondly, the best way to tackle climate anxiety is to take action in addressing climate change problems.

How can organizations transform climate anxiety into purpose and action?

Employees and organizations should adopt a solution oriented mindset. It needs to be understood that there are solutions for problems posed by climate change which we can work towards.
Employees should start with gradually making lifestyle changes which can reduce their own carbon footprint.

Employees can raise awareness of climate change and encourage others to think about what they can do to alleviate this issue. No individual effort is too small to make a difference. It is important to keep talking about climate change and that we can make a difference.

On an organizational level climate anxiety can be transformed into purpose and action by incorporating sustainability in the business strategy.

Organizations can set goals which are aligned with United Nations’ Sustainable Development Goals (SDGs) and regional/international Climate target plans. These goals will guide organizations in working towards positive Environmental action. Existing solutions in renewable energy, emissions reduction and responsible sourcing can be utilized towards accomplishing these goals.

Horizon had embedded climate action in its business strategy even before the adoption of the Paris Agreement. Implementing various initiatives to reduce GHG emissions led us to achieve a reduction of 82% – much ahead of the 2030 EU Climate and Energy Targets. Investing in renewable energy production as an alternative to fossil fuels early on has led us to achieve an 80% renewable energy share of total energy consumed in production – much ahead of the 2030 EU Climate and Energy Targets. Such action makes our employees look forward to their work in contributing towards our fight against climate change.

To conclude

Climate anxiety is a growing concern and should be validated. The best way for people and organizations to overcome this anxiety is to lead lives and businesses with positive climate action.

References:

[1] Marks, Elizabeth and Hickman, Caroline and Pihkala, Panu and Clayton, Susan and Lewandowski, Eric R. and Mayall, Elouise E. and Wray, Britt and Mellor, Catriona and van Susteren, Lise, Young People’s Voices on Climate Anxiety, Government Betrayal and Moral Injury: A Global Phenomenon. Available at SSRN: https://ssrn.com/abstract=3918955 or http://dx.doi.org/10.2139/ssrn.3918955

[2] Helm, T., 2021. Eco-anxiety over climate crisis suffered by all ages and classes. The Guardian, [online] Available at: https://www.theguardian.com/environment/2021/oct/31/eco-anxiety-over-climate-crisis-suffered-by-all-ages-and-classes [Accessed 7 October 2022].

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What are Green skills? Do you already have them?

Nikhil Krishnan — Tue, 09 Aug 2022 06:50:56 +0000

Green skills are defined as “the knowledge, abilities, values and attitudes needed to live in, develop and support a sustainable and resource-efficient society”. [1] [2]

In business context, these are essentially any skills that contribute towards creating products or services which have positive Environmental impact.

Transition to Green economy for a low carbon future is absolutely necessary today. Especially when climate researchers have initiated a dialogue on possibility of human extinction due to global warming. [3]

Conscious adoption of Green skills across industries can catalyze the much needed transition to Green economy.

We need more people to be equipped with green skills today.

Fortunately, you may have already acquired green skills in your career.

You may even be adopting these skills in your current role. Whether you re-work processes to decrease water consumption as a process engineer or you source recyclable components in manufacturing as a procurement manager, you are exhibiting green skills.

Green skills can be divided into 4 categories [4]:-

1. Engineering/technological skills: These include design and technological skills that can be used in R&D, product design, implementation of clean energy projects, construction of smart buildings etc.

2. Science skills: These skills result from knowledge in core sciences such as biology, geology or physics. These skills involve management of natural resources such as water or land.

3. Operation management skills: These skills are used in optimizing operations towards positive Environmental impact. These include management of supply chain, product life cycle and lean processes.

4. Environmental justice and monitoring skills: These are skills which can be used to ensure compliance with Environmental laws and regulations.

Green skills and talent are seeing a growing demand in sectors such as manufacturing, energy, construction, healthcare, agriculture and transportation. [5]

The emergence of green skills can create new jobs which had not existed previously. Such jobs include sustainability manager, solar engineer and environmental lawyer.

There are various opportunities for green skill and talent development which can contribute towards both traditional as well as emerging industry sectors. Reskilling to meet European Green Deal practices in industries is possible.

If you are seeking a new role where you can apply your green skills, Horizon can be a good organization to choose.

At Horizon, we are constantly seeking ways to improve our Environmental performance towards a carbon neutral future.

We have exhibited good Environmental performance thus far. One of our achievements is being well ahead of EU 2030 target for renewable energy share (80% against EU target of 32%) and reduction in GHG emissions (80% against EU target of 40%). Previously, we have outperformed the EU 2020 Climate and Energy Targets.

We can be reached at info@horizon.ee.

References:

[1] Organisation for Economic Co-operation and Development (OECD). “Greener Skills and Jobs.” https://www.oecd.org/cfe/leed/Greener%20skills_Highlights%20WEB.pdf

[2] European Centre for the Development of Vocational Training (Cedefop): http://www.cedefop.europa.eu

[3] Lewsey, Fred. “Climate Endgame.” University of Cambridge. 1 August 2022. https://www.cam.ac.uk/stories/climateendgame

[4] Arthur, Charles. “What are green skills?” United Nations Industrial Development Organization (UNIDO) . 21 January 2021. https://www.unido.org/stories/what-are-green-skills

[5] Kimbrough, Karin. “These Are the Sectors Where Green Jobs Are Growing in Demand.” World Economic Forum. 23 September 2021. https://www.weforum.org/agenda/2021/09/sectors-where-green-jobs-are-growing-in-demand/

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Diversity & Inclusion are not buzzwords. They are the missing link to sustainability.

Nikhil Krishnan — Tue, 02 Aug 2022 06:42:53 +0000

In the 21st century, discussion surrounding diversity & inclusion (D&I) has become more prevalent in the world of business. Every year, studies and research only seem to strengthen the business case for diversity & inclusion. As per McKinsey & Company’s notable reports Diversity Matters (2015), Delivering through Diversity (2018) and Diversity Still Matters (2020), diversity & inclusion in a business organization leads to:-

– Well informed and comprehensive decision making

– Innovation through wide range of perspectives and ideas

– Higher employee motivation and organizational commitment

– Attraction of top talent (Note: Gen Z expects good D&I performance from companies)

– Stronger global brand image

– Stronger financial performance

Despite an overwhelmingly strong business case for diversity & inclusion, it may still be misunderstood as merely ‘a moral option’ for businesses. Some companies could even consider having to choose between focusing on diversity & inclusion and ESG initiatives, another important factor expected in modern business.

It does not have to be this way.

Diversity & inclusion is a company’s competitive advantage, especially in a globalized economy.

Customers are increasingly diverse with different social/ethnic backgrounds and needs. Having a homogenous organizational group leads to limited perspective, inclusion and decision making. This may not adequately serve all customers.

When a company embraces diversity & inclusion as a competitive advantage, it becomes easy to implement and essential in serving customer needs. Diversity & inclusion has become just as important as fulfilling ESG/sustainability initiatives. Just as ESG initiatives contribute towards stronger financial performance and well-being of all stakeholders, so does diversity & inclusion.

Moreover, one does not have to be chosen over the other.

In fact, Diversity & inclusion is the missing link to a business’s sustainability and ESG goals.

How is diversity & inclusion linked to sustainability and ESG performance?

Like customers, other stakeholders are also just as diverse in the modern world. In order to serve diverse communities, we must embrace diverse voices of the communities and in our own organization. Diversity & inclusion impacts each of the ESG components as follows:

1. E (Environmental):

– Better understanding of both global and regional scopes of environmental problems. Thus, organizations can devise strategies for different environmental problems in both regional and global contexts.

– Effective, inclusive communication on environmental issues both internally and externally.

– Bolder innovation in solving environmental problems through diverse ideas and perspectives.

– Prevention of environmental discrimination and ensuring the benefits of environmental impact is equally experienced by all people in a community.

2. S (Social):-

– Helps ensure equality and safety in the workplace. – This in turn improves employees’ work performance and commitment to company’s sustainability initiatives.

– Encourages ethical sourcing with positive social impact.

– Helps reach a wider community and eliminates any possible discrimination in social initiatives.

3. G (Governance):-

– Inclusive decision making from management board wherein interests of all stakeholders such as employees, Environment, customers and community are taken in consideration.

– Instillation of transparency and trust in the organization. Diverse stakeholders will trust that their concerns will be heard and acted upon while leadership takes accountability.

One step further: Diversity, Equity and Inclusion (DEI)

‘Equity’ in Diversity, Equity and Inclusion (DEI) is the final component that ensures proper inclusion of diversity takes place in an organization. It ensures justice, equality, fairness and proper governance in an organization. Thus, it complements the ‘Governance’ component of ESG system.

Combining DEI and ESG initiatives in harmony ensures far-reaching positive impact of an organization’s sustainability initiatives.

Creating possibilities, for Generations

Horizon consists of 350 employees from over 15 nationalities. Some of the nationalities include Italian, Estonian, Singaporean, Indian, Ukrainian, Finnish, Russian and Armenian. We believe that a diverse team is one of the reasons for our success in serving our local community and our customers in 74 countries worldwide.

Together with our parent group Tolaram, we believe in creating possibilities for generations through sustainable development.

Sustainable development was defined by the UN in 1987: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

It is essential for us to listen to diverse voices to create possibilities for both current and future generations.

References:

Hunt, V., Layton, D., & Prince, S. (2015). Diversity Matters. McKinsey & Company. https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/~/media/2497d4ae4b534ee89d929cc6e3aea485.ashx

Hunt, V., Yee, L., Prince, S., & Dixon-Fyle, S. (2018). Delivering growth through diversity in the workplace. McKinsey & Company. https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/delivering-through-diversity

Dolan, K., Hunt, V., Prince, S., & Sancier-Sultan, S. (2020). Diversity still matters. https://static1.squarespace.com/static/561d0274e4b0601b7c814ca9/t/5ede28f14191b966b7436ae0/1591617786565/Diversity-still-matters-McKinsey+2020_06.pdf

United Nations. “Our Common Future.” 1987.

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