Remote and hybrid work necessitates changes to the way processes are risk managed and structured. This is something we do often. Our work has some extremely fortunate side-effects (at times, equally or more valuable than our immediate goals for our clients).

Today we explore the impact of these changes driven by process risk management on the carbon footprint (not just the reduction in carbon footprint but a reversal in the footprint from reduced deforestation). 

Remote and hybrid work lies and builds on the foundation of digitalization and brings to life a digital-first or digital-only shift where companies look to automate their workflows and build the next generation of processes that better service their customers while enabling their employees to work from anywhere.  

Digitization for remote and hybrid work requires the data itself to be digitally native (i.e. to be created, used, stored and/or destroyed digitally).  Paper should not be a part of the picture.

Date originates, contributes and archives digitally without ever being turned into a non-electronic medium (such as paper). Remote and hybrid work cannot function nor be risk managed without true digitization. To be sure, digitization is much more than the ‘scan-and-email’ of information that resides on paper. So much more.  

So let’s look at the intricate impact of just one benefit of true digitization for remote and hybrid work – no paper. 

Carbon Footprint – From Paper But Not Just On Paper: 

Companies and their workplaces use a lot of paper. According to the U.S Environmental Protection Agency, schools and offices use printing and writing paper which makes up for the biggest contribution to paper consumption. Statistics tell us that an average office worker uses up to 10,000 sheets of paper every year, and about 45 per cent of paper printed every day in an office is thrown away at the end of the day. 

The carbon footprint of paper is very large, especially because every stage in the life-cycle of a piece of paper causes carbon emissions. From sourcing, pulping, transport and use and disposal, paper leaves behind a long, heavy and burdensome carbon trail 

With remote work and digitalization, there will be a significantly reduced usage of paper by companies and their employees. Reduced usage directly means lesser demand, lesser production and minimized harm to the environment. 

Lowered Use of Tools and Services Related To Paper: 

The usage of paper in companies requires tools like shredders, toners and printers regularly. In an office environment, the process of printing numerous copies, memos and instruction manuals is standard. 

Apart from that, courier services play a large role in sending and delivering files and folders across office branches and employees’ addresses. Courier services and the involved commute spike the carbon footprint. With remote and hybrid work there is no central place to courier to and the basic requirement is for everyone to be able to view information digitally on their devices. 

As remote work and true digitalization require a reduced usage of paper, there will be a decline in the application of tools related to paper as well. Devices like printers contribute to electronic waste and if not recycled properly, pose harm to the soil, groundwater and marine life. 

Research shows that about 66 per cent of last mile emissions are connected to six e-commerce and parcel delivery services and businesses. If remote work is to bring a reduction in official couriers sent and delivered to employees, there is bound to be a direct decrease in the commuting footprint of the same. 

With lesser usage and production of electric and plastic equipment and services for paper in offices, there will be reduced carbon emissions and footprint. Additionally, every office space will contribute significantly less to waste generation. 

Reduction in Metals and Mining: 

Offices and workplaces use stationery for using, binding, separating, and transporting, (files, pens, markers, staplers, punches, boxes, indexes, separators, lamination). Most if not all of these things are made up of plastic, metal, or simply, more paper.  

In addition, heavy metal and fabrication costs are expended on archiving, storing and protecting paper for the long-term against theft, water and fire, Thousands of tons of metal go into the construction of the same.  Also, there is a long carbon footprint of the transportation of the metals to the urban areas because trucks and vans that are utilized for this purpose run on fossil fuels. 

With remote and hybrid work and the digital transformation that has come with it, the need for excessive stationery tools and storage spaces is significantly lowered, with companies and governments using cloud storage to store information and data which is a fraction of the carbon footprint. In turn, there is a direct decrease in deforestation, paper production, metal mining, and carbon emissions. Further, reduced deforestation has an incremental impact by not adding carbon but absorbing it.  

ABOUT THE AUTHOR

A senior banker from the complex global markets space, Mr. Nishant Shah has worked for more than two decades across Citibank, Standard Chartered and JPMorgan Chase before taking over as our Managing Partner. Passionate with word and pen about finance, technology, macroeconomics and future trends, he is a Chartered Accountant by education and the winner of various prestigious awards during his career, including the ‘India Awards for Excellence’.

The post Process Risk Management, Remote and Hybrid Work and Carbon Footprints. appeared first on Jackstien Practices, India.

As companies adapt to a distributed style of working, the demand for commercial office spaces and real estate continues to diminish. Office leases continue to spiral downwards, with renewals slated to go down even further as of mid-2022. 

The idea that an ample office space equates to the general success and growth of a firm is fast changing. Since remote and hybrid work is here to stay, renting and leasing commercial properties and expensive concentrated offices will soon be permanently reduced, need-driven, and spread out. Ultimately the large soul-and-energy-sucking office building will be outdated. 

But how does this shift benefit the environment? In more ways than one. 

Keep in mind that sustainability isn’t just going to remain a matter of preference for too long. It will slowly but surely be made mandatory. Risk managing your business against your carbon footprint will be critical and the surest way to start is to lean into the future of work in a calibrated form.

Pollution: 

Most office spaces are concentrated in urban areas to accommodate potential clients and the city workforce and to obtain exposure. Urban areas are also defined by a lack of greenery (while on this topic, recently, two teams in Barcelona published studies that connect the lack of green spaces in cities to the mortality of the population).  

With remote and hybrid work and a lowered demand for commercial properties, there will be a direct, positive impact on the environment in terms of increasing trees and plants in urban areas. This happens in two ways – an increase in residential homes as well as reduced deforestation to make way for commercial areas. This change will significantly tackle pollution – more trees will absorb more emissions of greenhouse gases, filter toxic chemicals and improve air quality in cities. 

Construction Materials: 

Generally, construction and building material (like bricks, steel, cement, marble, porcelain, glass, copper, foam, insulation, water, sand and the energy required to construct it all together) have a massive carbon footprint. 

Further, the construction happens in urban areas at greater intensity but the building material needed for building offices and commercial properties comes to the city from non-urban areas which further leads to millions of tonnes of carbon added to the environment from commercial trucks and other heavy vehicles that run on fossil fuels.  

Moreover, to support this, roads and other infrastructure are also needed. The Global Status Report for Buildings and Construction found that the construction sector contributed to 39% of energy and process-related carbon dioxide emissions in 2018.  

With a decline in the construction of commercial properties due to the remote and hybrid work setup, the need for construction materials, transport and the increasing carbon footprint burden will be lowered. And with that will come a reduced investment in supporting vehicles, machinery and infrastructure, and lesser carbon emissions in general. 

Office Materials, Metals, Mining, Facilities and Hardware :  

Offices and workplaces use a host of stationery items every day. The forced digitalization necessitated by remote work will bring a significant dip in the usage of everyday things like paper, printing ink, filing material and safety cupboards (a detailed look at this here). Apart from that, offices have regular facility maintenance that requires tools from floor swabbing buckets and external ladders. With offices closing down and workplaces shifting to a person’s home, the need for these things will widely decrease.  

There will also be a reduction in the need and maintenance of machinery material in offices by thousands of tonnes. We all know that the production of materials is a big source of greenhouse gas emissions. A lower requirement for tools, materials and machinery in office spaces due to remote and hybrid work will mean a significantly reduced carbon footprint per office space. 

Decongestion of Transport Routes: 

Concentrated offices and the commute to and from them, especially during peak hours, have clogged roads forever. Many workers have had to navigate through congested traffic ways on a regular basis. Traffic congestion brings an increase in carbon dioxide emissions and air pollution. At the same time, the green cover available to absorb and reduce these emissions has reduced for the same reason that the emissions themselves have increased – centralization of the premises. 

A minimized need for centralized office spaces and commuting to and from them will directly increase traffic operations management, lower the stress on public transport, significantly decongest commute routes in urban areas and lower the carbon footprint impact. 

Reduce the Skyrocketing Spread of Real-Estate: 

Centralised commercial spaces and properties take up space available for residential land in urban areas. At the same time, the need to live within a commutable distance increases. As a result, the urban sprawl increases outward in search of affordable housing facilities which in turn increases deforestation and at the same time leads to an increased commute back to the office properties and buildings.  

ABOUT THE AUTHOR

A senior banker from the complex global markets space, Mr. Nishant Shah has worked for more than two decades across Citibank, Standard Chartered and JPMorgan Chase before taking over as our Managing Partner. Passionate with word and pen about finance, technology, macroeconomics and future trends, he is a Chartered Accountant by education and the winner of various prestigious awards during his career, including the ‘India Awards for Excellence’.

The post Commercial Real Estate and the Carbon Footprint Impact of Remote and Hybrid Work appeared first on Jackstien Practices, India.

As the economy begins recognizing and utilizing Remote and Hybrid Work models as fundamentally better, there has also been much discussion on the benefits for businesses and employees.

But the benefits to society as a whole haven’t received their fair share of discussion.

But the benefits to society as a whole haven’t received their fair share of discussion.

Let’s look at this aspect. Starting with the impact of Remote and Hybrid work on the human carbon footprint.

The most obvious impact here would the massive reduction in carbon footprint by cutting emissions from billions of hours of daily commutes. However, the impact is much larger than just the traffic emissions. Much much larger. We will touch upon that too.

The reduction in commute:

It is a no-brainer that regular office commute and the carbon emissions that come with it have a direct relationship with climate change.

One of the most domineering global issues at the moment, climate change negatively affects, among many other things, individual health, weather and food production.

Let’s look at one tiny microcosm. In 2021, research from Spain’s Institut de Ciència I Tecnologia Ambiental suggested that due to the traffic reductions triggered by Covid-19 in Barcelona, there was a significant reduction in nitrogen dioxide (the main pollutant generated by traffic emissions) by 10 per cent. If these are the numbers for just one city, the wide-scale positive impacts on a global level will lead to massive improvements. It may not immediately feel so, but 10% is a massive contribution to contributing to our carbon footprint reduction targets.

Now let’s look at how this impact rolls down.

Impact of reduction in commute – change in the buying pattern for cars:

If the need for commute reduces considerably on average, and people use public transport as and when they need to go on-premises. Why, after all, would people need and buy more private motor vehicles or replace existing ones so often? In another microcosm in the context of the United States, KPMG predicts that because of remote and hybrid work, 14 million fewer cars will be needed because people will drive less. Lesser cars mean lesser carbon emissions. This shift in the buying pattern will, of course, bring a change in the vehicle sales sector.

Impact of reduction in commute – change in public transit:

With people and companies operating remotely, there will be reduced congestion on the roads and highways. A 2021 report by the Department of Transportation found that only in the US is air travel predicted to behave at the same level as it was pre-pandemic.

Other modes will remain lower and public transit will see a permanent shift which will be a positive result as far as carbon emissions are concerned.

This change will also trigger a reduction in the construction of infrastructure related to public transport and the millions of tonnes of material that is part of the process.

Impact of change in the car sales and public transport  – Reduction in mining ore:

With a change in vehicle sales and vehicles needed for public transport comes a lowered need for materials such as metal and steel that are widely utilized inputs in the auto manufacturing business. These materials are produced from iron ore, and if their requirements are diminished, there will be a direct reduction in mining. Lesser mining would mean lower carbon emissions, and other harmful consequences to groundwater, soil and natural landscapes will also be minimized. Mining is also often directly linked to deforestation and soil erosion in several areas. Add these to the carbon positive benefits of remote and hybrid work.

Next, we look at

the impact of remote and hybrid work on carbon added by construction and real estate.

the impact of process changes driven remote and hybrid work on carbon footprint and deforestation.

Thereafter we will move on to societal benefits other than by way of reduction in the carbon footprint.

Remote and Hybrid work is a gift that keeps giving so long as you risk manage it well.

ABOUT THE AUTHOR

A senior banker from the complex global markets space, Mr Nishant Shah has worked for more than two decades across Citibank, Standard Chartered and JPMorgan Chase before taking over as our Managing Partner. Passionate with word and pen about finance, technology, macroeconomics and future trends, he is a Chartered Accountant by education and the winner of various prestigious awards during his career, including the ‘India Awards for Excellence’.

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