Process Mining Will Move CO2 Reduction Goal Management One Step Forward

Since the Paris Agreement entered into force in 2020, governments and companies have been taking measures to reduce CO2 emissions more actively. There has been steady technological progress, but have companies prepared their emission management strategies?Companies will face the situations described below in the coming years, so they will need to obtain clear numerical data.

• The plant is in full operation in extremely hot weather: how much CO2 has the plant emitted today? How does it compare to the usual volume?

• Manufacturing line mergers: how has the carbon footprint changed?

• Expansion of EV cargo truck fleet: compared with conventional rail transport, which method of transportation reduces CO2 emissions more effectively?

The following is a real-life example of a business that developed a solution using process mining to address these needs and is currently working towards achieving new goals.

I interviewed Mr. Dirk Hermans and Mr. Raphael Niecko, the Digital Team leader and the manager of the FAAS, Ernst & Young ShinNihon LLC about their initiatives on the solution for analyzing CO2 emission targets.

Emission management is still being performed manually without using technology

"I was speaking to an expert on CO2 reduction, who told me that the current emission management process did not use technologies and involved plenty of manual work and that there were no analytical functions available. That's why I began to explore possible solutions," said Mr. Niecko. EY figured that the process mining method, which is increasingly used to drive operational efficiency and compliance management, would be useful for managing CO2 emissions. Thus, EY offices in Japan and India teamed up and began to build a process mining model using Celonis in March 2020. They completed a prototype in six months with support from Celonis engineers. During the development of the prototype, they received advice from Dr. Lars Reinkemeyer, a world-famous process mining expert. The completed prototype received positive feedback from Dr. Lars Reinkemeyer, who said, "This initiative is a significant accomplishment that marks one step forward for sustainability. I'm looking forward to even greater progress."

Emission management based on scientific approaches

This solution design combines CO2 emission analysis with operational efficiency analysis, an area where process mining is traditionally applied. This allows companies to make management decisions based on conventional operational efficiency goals as well as CO2 reduction targets, which will become increasingly important in the future.

Specifically, this solution will enable the following:

• Calculate the most recent CO2 emissions based on real-time linked data

• Perform a drill-down analysis for each material supplier, product, production process, production area, etc.

• Simulate CO2 emissions for alternative production volume or logistics methods

EY's solution uses Celonis as the process mining tool, which enables the real-time calculation of CO2 emissions. Without the numerical data of current CO2 emissions, it is impossible to implement practical reduction measures while performing business duties. The manufacturing industry is by no means the only area where an analysis of CO2 emissions is needed. According to Mr. Hermans, this solution is used by financial institutions to evaluate the businesses of potential loan borrowers in terms of ESG. This solution will allow companies to make management decisions based on operational efficiency goals as well as CO2 reduction targets, which will become increasingly important in the future. It may be a game changer for businesses in the age of ESG.

The need for enhanced CO2 emission data will grow in the coming years

In order for companies to utilize this solution, each company will have to prepare its own numerical CO2 emission data. Although this solution is still in the prototype phase, EY hopes that each company will begin to plan practical measures for CO2 emission management based on this prototype. This solution is designed based on the premise that companies will prepare their own data or use the data that is already being used in the market or by experts. Mr. Niecko said, "As more companies employ this solution, there will be more complete data available in the world. This would allow us to create industry-standard shared databases, and develop more CO2 reduction measures." EY hopes to continue with this project both as a business and as a form of social contribution. The company is currently recruiting participants with the aim of launching pilot projects with multiple companies in 2021.

Before today's interview, I considered the analysis and management of CO2 emissions to be an abstract concept that was still a long way from becoming a reality. However, the illustrative demonstrations using process mining has made this concept much more feasible and realistic to me.

Finally, Mr. Niecko added, "Today, we look at the calorie information when we are shopping for food products, but there may come a time when people will select products based on their CO2 emissions." This may happen sooner than we think.

Satoshi Ueda

Evangelist