Why Data-Driven Sustainability is Key to a Greener Future

Tom White:
Pekkoo, welcome to the IoT Podcast.

Pekko Paivarinta:
Nice to be here with you Tom.

Tom White:
Nice that you are here. And in fact, you’re the second person from IBM on the podcast. We started with Vicky Bunyard quite a few weeks ago now, actually. And Vicky obviously mentioned, you know, it would be good to get you on and some other folks to talk about sustainability. And that’s going to be quite a big topic actually for today, isn’t it?

Pekko Paivarinta:
Yeah, it’s top of mind for all business leaders, but also all across organizations and in our personal lives as well. So

Tom White:
Yeah.

Pekko Paivarinta:
it’s a really hot topic.

Tom White:
Yeah. For me personally, it really is. I think it is for a lot of businesses. It’s a lot of people individually, as you say, in our personal lives. So much so that when we rebranded our business in October 2022, you know, one of our five core guiding values was around being sustainable. Right. And I think that’s so important that we get away from this kind of wasteful society that and how IoT can really help with that. So we’ve definitely done a couple of shows on this in the past, but I’m looking forward to getting into this today with you to learn more about your personal view on it, and obviously that of IBM’s. So as a way to kick off, as every podcast in the world possibly kicks off in the same way, maybe you can explain a little bit about who you are and what brought you into this wonderful world.

Pekko Paivarinta:
Yeah, so yeah, I’m Beko. Coming from northern part of Europe, Finland, and born and raised in Finland. Actually moved to Australia at one point of time in my life and spent some time over there. And then came back to Europe and been working with IBM for 15 years. All my life with IT and really data. being in the center of everything. And that’s also my angle for the sustainability, because you can tackle the sustainability from multiple different angles. Mine is data and how can we help organizations with the data, how we can automate things, how can we visualize things, and so forth. But yeah, all my business life been with IT and data has been in the center of everything. I live in northern part of Helsinki, wife, two kids, and actually, just a recent experience, because there’s a personal aspect to the sustainability as well. The kids are at that age that they have all kinds of gadgets and devices, tablets, mobile phones, computers. We obviously have all kinds of household devices, washing machines and everything. And last autumn when the energy crisis started and the prices started to go up, I was really thinking that most of my devices are connected to internet anyway. I get a lot of data. I haven’t really used the data. I have all kinds of apps. But I really wanted to connect the dots, connect the devices. And with this kind of information and the information I got from the electricity company, when the prices are peaking and when they are low, we were able to reduce our energy bills by 30% with my own family just by having the data. And this is the same exact same problem organizations have. They don’t have visibility to data. So I’m really glad to be here with you and discuss these matters and how we can have a different take on the most things

Tom White:
Yeah.

Pekko Paivarinta:
if we have data.

Tom White:
I think that’s fantastic that you’ve really brought that to life with a personal example around it. There’s a lot of talk, certainly in technology, over the last five years to a decade around data, data engineering, data science, the interpretation, use of data, but I still believe we’re at our infancy when it comes to harvesting and interpreting that data in a measurable way. And ultimately, It has good and bad connotations, doesn’t it? You know, in the press, people may have seen, you know, stories about Cambridge Analytica with the Facebook scenario in the past and about how it can be used badly. But I am excited about, as you are, around how data can be used in a good way, particularly when it comes to sustainability. So I think that’s the overall theme today, isn’t it, around digital transformation, how IOT enables businesses and individuals to track and measure. their sustainability and performance more effectively through data. So to bring this to life then, Peko, to get into it, how can data collection through IoT devices contribute to a sustainable decision that an organization can make?

Pekko Paivarinta:
Well, in many ways, but if we come from how things have been done so far, most C-level managers, CEOs have announced targets for the organisation that we’re going to be carbon neutral by 2030, 2040, whatever the year is. The easiest part is it’s already done. that announcement has been done. The hard part is to really start the tracking, start to collect data, automate that. And it’s not an easy task because there’s so much of it. And… Some of that is not in our own hands. So we need to get data from multiple sources, from suppliers and things like that. So it’s gonna be a journey. So like nobody can say they are ready. I think IBM is a good example. We’ve been releasing our own sustainability reports for… decades. But they’re still, when we get more data, we have much more visibility and we can do much more things in our path to more sustainability world and how we can impact the people and organizations and environment around us. So it’s not only our own things, but definitely. And one of the things are really coming from technology background. What I really want to bring is the visibility and ease of use of data. Because nowadays there’s a lot of data engineers, data scientists who know this stuff. But I want to bring this to everybody. Because people tend to do sound decisions when they see how it’s impacting. they can take responsibility. Of course, there’s the security angle to data. There are bad people, there’s malicious intent. But overall, I think where I come from, now I’ve done a lot of security stuff in the past, but then again, I think what comes to sustainability, there’s a lot of good things to achieve. when we bring data from different sources. But it’s going to be hard. That’s

Tom White:
Hmm.

Pekko Paivarinta:
definitely something we’ve acknowledged.

Tom White:
I think for me and for certain viewers and listeners of our podcast, I think we can understand that when we’re involved in the technology industry and we have an interest in IoT and through sensors. But for the uninitiated or for people that perhaps don’t understand to the extent around data analysis and why it might be useful, particularly from an environmental impact, can you just explain why the harvesting and the analysis of this data is actually useful? and why it’s actually needed.

Pekko Paivarinta:
Yeah, well, there’s multiple reasons driving towards this. So first of all, there’s a general drive in the people’s mind. Not only the young people, but also more senior people are realizing that we need to leave the world to a better place, to our… kids going forward. But there’s also different angles like regulations, financial impacts. There is now a phase where there’s a different value for money if your investments are green or if they’re not, and if you are able to showcase that. So it’s not only that you say that these These are green. And the kind of the green washing has a really bad taste. That’s been done quite a lot. And we really need to move from that to really data backed information. So it’s not like just the marketing. doing a lot of nice work around our operations. But really, how can we prove? Is it auditable, for example? Like, I can claim whatever, but then again, that’s not good business. And a lot of young people, they select their workplaces based on the actions of the organization, not what they say, but how they act. So that’s why. I really think that data is crucial.

Tom White:
Yeah, yeah, I completely agree with you around the last statement as well around how the younger generation can see through Greenwash and would rather join a business based upon their actions, which is the right thing to do ultimately, you know, and so, you know, it’s, and this is why the use of data from a sustainability point of view and using it in the right way is excellent. Just to bring this to life then, can you name some examples of IoT applications that collect data specifically to drive sustainability initiatives?

Pekko Paivarinta:
Yeah, well, from our portfolio, like there’s tons of solutions. In IBM portfolio, we’ve really made a huge effort on this. So in the reporting side, data platform side, we’ve made an acquisition of NBC last year. They’ve been in business for 15 years and really focusing on being the single source of truth for what comes to ESG data. So not only the environmental, but the social and governance side as well. And then, but that’s kind of the reporting layer. There’s a link to weather data. So that’s an important part of almost every kind of industry nowadays, where the weather is impacting. Not only how we impact the global warming and the weather, but how… weather is impacting our operation. So that’s also something we need to link most of the times. But when we have this kind of baseline and understanding where we are, then we can operative analyze this with asset management solutions, real estate solutions in our portfolio. We have tools for that. For some industries, it’s the IT heavy. And over there, we have made some investments and acquisitions lately with Turbonomic and Instana, really focusing on how can we optimize the cloud usage and data center usage, not only from the price perspective, but also the environmental impact. And that’s really cool stuff we have there. and helping organizations to address the need to move to modern IT solutions, modern application stacks, but still able to tackle their complexity, also from the environmental perspective.

Tom White:
Hmm.

Pekko Paivarinta:
And then again, supply chain is obviously, for most organizations, supply chains… upstream, downstream supply chains. They are bringing a lot of emissions in, for example, carbon footprint. And that’s also something we are addressing with the IBM portfolio in different technologies, including blockchain technologies and so forth.

Tom White:
Yeah, that’s excellent. It sounds like there’s some really discernible action there for the acquisition of the company that you mentioned and the initiatives that IBM are taking. But I would imagine there’s still quite a lot of challenges as well, isn’t there, that you’re facing around this.

Pekko Paivarinta:
Definitely, because there’s so much data and different sources of data like real estate, supply chain, IT. Combining different sources, some we might own, some we might have suppliers, and getting that kind of data is not an easy task. But yet we really want to automate this because coming there, In the European Union, we have the new regulations in front of us, the CSRD frameworks. And we really need to start to show with the data where we are, how we’re going to improve our actions. And the only way to improve our actions is to have the baseline, to understand what our current emissions are, for example. and how can we improve. But the problem is that most organizations, they don’t have a clue where we are today. And that’s why it is so important to start with the data and start bringing this automation and visibility of data to the organization. Not only to the top level, but everywhere in the organization. So. People can make decisions based on data, not just gut feelings.

Tom White:
Yes, I think that’s very important. There’s a life lesson that is, isn’t it? Go actually on the data rather than the feeling. You need specific examples. I think that challenge there with the amount of data is one that’s across a number of industries, isn’t it, actually? So I think people can sometimes get a bit blind to the amount of data and the interpretation of that. But it’s a good point. But I would imagine on a smaller scale, there are some success stories. Perhaps you can talk around about how people have actually managed to harness this properly with the data that’s coming in from all the various points. Can you share some of those stories for us today, Peco?

Pekko Paivarinta:
Yeah, definitely. Before I share a success story, I just a couple of weeks ago came across with one example where organization had announced that they will be carbon neutral by 2030. So the announcement was done last year. And this year, they said, realizing after starting collecting data and seeing difficult the journey is. They announced they’re going to postpone this target by 10 years. So I believe we’re going to see much more of this. But that doesn’t mean we can’t start and really enjoy the small success because this is a journey. And we’ve done different approaches with the organisations we’ve done with Sunde and Velt in Denmark, especially for bridge, really extending the life cycle of a bridge by 100 years with a lot of automation and bringing drones to the maintenance and really avoiding to build a new bridge in the time frame. and avoiding huge amount of CO2 emissions for building a new bridge. And also airports, we are doing a lot of things with airports and there’s a lot of data flowing around with people moving and travelling and really preventive maintenance. Because sustainability is also really optimizing operations. And when do you do your maintenance? Do you have a scheduled maintenance? Can you do preventive? And really, not to do too early, not to do too late. And ship hauling is one of our customers in there. But. At the same time, we are experimenting things with Boston Dynamics, for example, with the robotic dogs and so forth, bringing visual inspection in there, so really bringing the AI capabilities and not need to be a data scientist. to build a model for visual inspection. Like anybody can do this in half an hour and cool stuff like that. So things are moving, but again, I would say, don’t try to eat the whole cake at once. You’d really need to start from somewhere and start the journey. That’s obviously what we have found out.

Tom White:
I think there’s some fabulous examples and clearly you’re very passionate, IBM are doing some great work with some great customers, some great organisations. You mentioned Schiphol Airport there in the Netherlands, always very forward thinking. For me, my personal view on this is I hope that the governments around the world treat this in the right way. There are some sort of horror stories around. at the moment around 15 minute cities and taxation and carbon use, et cetera. And I wouldn’t want sustainability to be used as a way to tax people more. Right. You know, it should be the right thing to do because we need to look after our planet and we need to be more sustainable. We don’t need to build another bridge and expend lots of CO2 if we can fix the current one. But I wouldn’t want individuals to suffer because of it. But that’s out of our hands. But it’s something that we need to lobby the governments to make sure we do this in the right way.

Pekko Paivarinta:
Yeah, definitely.

Tom White:
You know?

Pekko Paivarinta:
I agree. Of course, there could be an interest to use this in different ways. And not always so positive ways. So definitely an area where technology is an enabler. We really need to have the governments and institutions in this journey with us in a right way. manner.

Tom White:
Yes, yeah. And I guess time will tell with that actually, won’t it? But provided we’re all united, it should work. Moving on, Peko. So supply chains in Europe, we touched upon data from supply chains. The tourist is quite complicated actually and complex. I guess the question is, who owns that data? And is that perhaps one of the reasons why… the analysis of that data isn’t as thorough as it should be because there’s a question mark actually about who should analyze it based on who owns it.

Pekko Paivarinta:
Yeah, that’s a difficult one and that’s basically something I face on daily basis with customers. How do we do? Like the ESG is having three different scopes. We have the scope one and scope two which are basically our own buildings and cars and energy and so forth. And that’s really a tricky one, because how do you do measurements with data? Like there’s a lot of spend-based estimations, estimations ongoing on the top 10 suppliers of any organizations or 20, no matter what’s the number, but moving from spend-based estimation on to actual data. It’s going to be hard because a lot of organizations, they still don’t have proper information on scope one and two. And usually, scope one and two of my supplier are part of my scope three. So if my supplier doesn’t have their scope one and two in place, it’s really hard for me to get that data to showcase that, hey, my supply chain is in good shape. But I truly believe that this is an area where organizations will be focusing. And it will be also impacting on the supply chains because sourcing and purchasing departments, they… will most likely to have an element of sustainability in the decision-making criteria. And so it’s not only cost or speed of delivery or whatever the criteria is. I believe there’s going to be a sustainability angle coming into this. And that’s also driving the data aspect. But at the same time, Really, if you don’t have the data, you might be dropped out of certain supply chains, because you are not able to showcase your emissions and your ESG data.

Tom White:
Yeah, yeah. I agree. I think it’s a complicated challenge. But I think we’ll get through it the more use cases that we have. And the more it’s at the forefront of people’s minds. And hopefully with podcasts like this, people will start to reflect and think about it and about what they do specifically with it. And I guess perhaps that leads on quite nicely to my next question around how organizations can effectively… communicate the value of IoT data-driven sustainability initiatives. Would you say, in your opinion, that successful case studies, PR like today, are there some of the examples about how organisations can do that?

Pekko Paivarinta:
I think they are. And overall, moving away from traditionally, there’s been a lot of work done towards sustainability report in different organizations in conjunction with the annual report. This is put out once a year and then all the sustainability members going for nervous breakdown for having a… two months off because they burned out. But moving away from this kind of annual reporting to really daily operations needs that you need to have the data available. And that’s basically what we are doing with NVC. We were first, we were the user of NVC. So we were the customer of NVC ourselves at IBM, using for real estate and other things, and really using it in our daily operations and showcase this data and visualize the data to people, not only on the C-level, but everybody, not only sustainability managers, but… facility management and so forth. And that’s why I think the importance of automating this kind of data can lead to faster decisions and also course correct if we are making bad decisions. So it helps us in a way. And yeah, so in VC. has been in the market for a long time, like 15 years, really focusing on this area. And while we at IBM, we’ve been releasing our sustainability report for decades. We needed to automate a lot of things and we really wanted to use the NVC. We investigated a lot of technologies in the market. And then when we use it, we realized, hey, everybody else is facing the same problem with data, lack of data, lack of visibility. And I think it also showcases that when we are using our own tools and technologies, it can be really a strength for the customers and organization we work with.

Tom White:
Yes, yeah, yeah. I agree with you, Paco, and I think that’s some fantastic examples, as you mentioned there, around how people can use it, why people can use it, and positioning, I suppose, isn’t it? So, you know, what is the benefit to the organization in doing this, making it crystal clear around how they can save money, you know, increase production, et cetera, like, you know, the baseline reasons. So really, really, really good advice. And coming near to the end of the podcast today, I think one of the most pertinent questions of all of this actually, we’ve kind of saved to last, which is, how does someone start doing this? So when you’re not an IBM, and with lots and lots of people, but you might be a small to medium size enterprise, 50 to 250 staff. You’ve got a lot of data, you want to do better, but you don’t know where to start. What would your advice be to them?

Pekko Paivarinta:
Well, we work with ecosystems, so nobody can solve this alone, not even IBM. So we work with an ecosystem of partners. And really, in my view, there’s two ways to solve this. And neither of them alone will solve anything. So there’s the sustainability consulting. where you really work with a partner and help the organisation to define their goals and define their impacts to the organisation’s structures and responsibilities and so forth. At the same time, we need tools. We need tools to automate data collection and visualise data and combination of these. is the way I would start in any organization. Get yourself some consultancy help with partner who can help with the sustainability angle. But then start the data journey early, because you can spend all your life talking and thinking about, but if you don’t have data available, no use. So that’s why. I would use the dual strategy of help and tools. So yeah, that’s my advice for any size of organization.

Tom White:
I think that’s very sound advice, Paco. Thank you for sharing it. It makes a lot of sense. I’ve really enjoyed today. I think it’s been really interesting, actually. Hearing some real life examples rather than it being theoretical, I think is really important. And firsthand to hear how you and your partners and the acquisitions at IBM have made in order to do this. And I think the example around the bridge is fantastic. And if anyone’s listening and hearing this and wants to find out more, then of course, we’ll put your details in the comments and a bit more about us, et cetera. But I think those examples alone should really get people’s juices flowing to want to do more, right? And to want to be part of this. So thank you for sharing it today. I have a quick couple of questions, actually, as we come to wrap up. At the time of recording, it’s the 24th of May, 2023. So I think we can still ask this question just about. But what would be your personal prediction for IoT in 2023? What do you hope to come to fruition by the end of the year?

Pekko Paivarinta:
I really think getting the IoT data away from the data scientists to everybody. We have already tools available. It’s a big change. It’s a big wish to happen in a short time. But that’s my really big… dream for this year and I believe it’s possible to showcase the data to everybody in the organization.

Tom White:
The way I see that, I see that like crowdfunding. So crowdfunding is enabled then everyone to own a piece of a company, but also for companies that might not have got that investment to get that investment. And getting data out to everyone, rather than just a few very clever, bright scientists, data scientists working in organizations, means that there’s more visibility, more understanding, and a general consensus amongst the public about the importance. So I agree with you actually, and I would say that would be hopefully one of mine for 2023, that the use and interpretation of data is not just confined to folks that are paid to analyze it actually, and that it is everyone. So thank you for sharing that. That’s really, really good. And I have a question.

Pekko Paivarinta:
And to continue a little bit, because I think even though they are really bright people handling the data, I think there’s much more business opportunities when we share that data within our organization. And like everybody can contribute to their business. And that’s what I think would drive more opportunities for organizations.

Tom White:
It’s a bit like marketing and sales, right? You know, marketing teams should work very closely with the sales team because there’s a fine line between marketing and sales. And we’re all, you know, we’re all trying to do similar things, which are going to grow our businesses and hopefully, as our business from the IoT podcast perspective and our group company in a sustainable and the right way, right? So yeah. Yeah, completely agree with that. You know, it’d be interesting to see, you know, five years time or 10 years time, how well all organizations, not just those equipped, especially in the technology world, use the data around them in order to make better data-driven decisions, particularly when it comes to sustainability. So thank you for that, Peco. And I have a question from our audience. So every week our audience ask a number of questions and with yourself coming onto the show, this is the question that I’ve got for you today. So what is the most surprising or unexpected impact you’ve seen from a digital transformation and IoT have on a business’s sustainability performance?

Pekko Paivarinta:
Well, maybe it’s the example I shared with postponing the target. It was a surprise that that particular organisation was very open about it. And I think we’re going to see more of that happening. But it was still a surprise that, hey, we’ve realised that this is… difficult thing and really driven by the fact that we made a challenging announcement to reach the target by 2030, but now realized that we need to postpone our target. But I think that was fairly surprising to me.

Tom White:
I think, yeah, I was going to bring that up earlier actually. My initial reaction on that is twofold. One it’s good to be honest and it’s good to show some humility in the sense that you may have got it wrong, you know, but to show that you’re certain that you want to do it and that you want to go carbon neutral and you believe in the benefit of it. But on the other hand, my concern and my worry would be, what’s the point of having a target if you keep moving the target? It no longer becomes a target anymore. And I did wonder from an EV perspective in the world as well, whether or not the EV target, certainly that we have in Europe anyhow, is manageable. And if we’re going to get to the point where we just moved the target, and the outcome of moving the target for consumers, for people that are… have a commercial business interest in there or people who, you know, every stakeholder to that, right? So I understand that and I think that is unexpected. I would just hope the target only moves once.

Pekko Paivarinta:
Yeah, that’s a fair concern and valid point you are bringing up because it cannot be just a moving target. Like we really need to have ambitions, target and really work towards those. Because otherwise you lose the meaning of target.

Tom White:
Hmm, hmm, hmm, absolutely, absolutely. Time for the quick fire questions, Pekko. So here we go. If you could have any IoT powered gadget in your home, what would it be and why?

Pekko Paivarinta:
I have so many of those. Uh, Probably the heating unit in my home.

Tom White:
Yeah, it’s the same for me as well. I remember years ago, growing up, you had to go to the central heating system and do it manually, and now it’s all done. So yeah, that’s a good one. A quote you live by.

Pekko Paivarinta:
Uhhh It’s easy to make things difficult, but it’s really difficult to make things easy.

Tom White:
That’s good. That’s good. And I know which side you should be on, right?

Pekko Paivarinta:
Yeah.

Tom White:
Last one. If you could learn any new skill, Peco, anything at all, technology or outside of technology, what would that new skill be and why?

Pekko Paivarinta:
language.

Tom White:
Okay.

Pekko Paivarinta:
I think there’s the communication between people and it’s a gift.

Tom White:
I often think we take it for granted being British that people speak English so well as a foreign language like yourself and we are so poor at it. We can barely say a sentence or order a coffee. If I came to Finland, I’d struggle massively, but I would imagine most people would be able to speak to me probably quite well actually. So I agree. I think language is a beautiful thing. The ability to be able to communicate to people, your common man across different countries, right? So yeah, it’s nice. Peco, I’ve really enjoyed today. Thank you so much for coming onto the IoT podcast. You’ve been a great guest. I’d love to hear about your passion for sustainability and IBM’s initiatives. Where can folks find out more about the work that IBM are doing specifically around sustainability?

Pekko Paivarinta:
Well, anybody can contact me on LinkedIn or other means. But yeah, just go to ibm.com and we have a lot of these case studies, use cases on sustainability over there and free trials and so forth. So there’s a lot of material available. So yeah, please try it yourself.

Tom White:
I will. Thank you. Thank you for coming on the show.

Pekko Paivarinta:
Thanks for having me.