The idea for Zero Pro originated from conversations had back in 2017 between corporate bankers and the sourcing arms of some of the worlds largest consumer brands.
During these conversations, the brands were starting to talk about their strategies for reducing their environment impact. The terminology used back then was not as developed as it is today, but the common thread across all the conversations were these brands were they felt they had a good handle on Scope 1 and Scope 2 emissions. Scope 3 was the area that was causing the most concern.
This shouldn’t come as a surprise to anyone. Supply chains are inherently complex and opaque and can involve tens of thousands of suppliers, who are often not managed by the brand directly. It was felt that banks had a fundamental role to play in helping these brands on this journey but the challenge was going to be how to identify suppliers that needed the capital to invest in their businesses.
It really felt like there was an opportunity to build a product that can reduce the load from all parties and drive positive momentum in the market.
If we fast forward to today, eight years later, not many companies have materially progressed their Scope 3 goals and objectives.
Its not from a lack of desire though. Many companies have commmited significant resources and capital to this subject but not seen much in return.
The United Nations are now using more alarming language to describe the lack of progress made and it would appear that the world may not deliver on its 2030 objectives and the targets for 2050 are looking even more challenging. So much so that countries are publically stating Net Zero dates that reach far beyond 2050. India have said 2070 and China 2060. These are the two countries combined make up more than one third of the worlds population.
Not only did it feel like there was an opportunity to build a product, companies were starting to demonstrate a need for such a product.
The original concept for Zero Pro was to build a cloud based collaboration portal that allowed suppliers and buyers to interact and share information about what activities they undertake from as part of their value add process within the supply chain.
The objective was to provide the most accurate possible calculate of carbon emissions created and water consumed at an individual buyer’s product level.
The version of Zero Pro that we have today is the result of several years of design and development. The product is vastly different to the original concept and offers significantly more functionality that was originally envisaged.
We were fortunate to gain the insights and advice from one of the worlds largest retailers who helped guide us towards some core principles that we should build the product around. These were:
During the early development phases we found that the products design, especially the way it managed data didn’t allow us to meet these principles. We had to go back to the drawing board and start again. The complexity of the data we were trying to manage was significant and it took us three or four interations to really get the model right. We finished our baseline product at the end of 2023.
We originally set out to build a product that allowed companies to access accurate calculations of the impact on the environment of the products they sold and the underlying supply chains that supported those products.
What we have found out through our intensive research is creating accuracy in this space is not technically possible.
If we take a step back and think about this, it doesn’t make logical sense to say you cannot accurately measure the impact, especially as everyone has committed to Net Zero targets.
Some calculations are easy. Scope 1 and Scope 2 emissions are simple and straightforward to calculate. Scope 3 is a different story.
Whilst we can, and do, use a time study to calculate the impact of plant and equipment utilized during the value add process at each stage of the supply chain, the way goods are transported is much harder.
Air friehgt remains a critical component of many supply chains and whilst we can use a proxy to get to a fairly accurate calculation of the impact of air frieght per tonne per kilometer, what we cannot reasonably get to is the distance the flight actually took.
If you look at the flight data for any flight, it doesn’t really matter which one, and take the tracking data over a a two week period, you’ll see that the flight distance between the shortest route and the longest route can be as much as 10% different. On a long haul flight, this could vary by around 1.3 tonne of carbon per kilometer per tonne of cargo. For long routes like Hong Kong to New York the distance travelled varies by over a thousand kilometers.
To accurately make a statement on the impact of this leg of air frieght, you would need to recalculate the impact for every single journey. Whilst this is technically possible, it is not practical at this point in time.
Much of the transportation carbon produced in the supply chain is road haul transportation. If a articulated lorry is used to move goods from a seaport to a number of distribution centers, to accuractely calculate the impact of each stop would require a fuel reading to be taken at regular intervals which doesn’t happen today.
The answer today is to use informed proxies that are regularly tested and updated to ensure they are as accurate as possible. We have built a number of these proxies into Zero Pro and we are committed to continue to improve the accuracy of these proxies over time.
Our early conversations with companies involved a heavy focus on the use of AI to calculate the impact of a supply chain. We pushed back on this and we believed, and continue to believe, that AI cannot be used to gather more data about a companies supply chain.
We felt it important that companies spent the time and effort to properly gather the data they needed to fully understand their supply chains, but once this data is gathered, AI can be used to help companies understand the impact of changes they make to their supply chains.
We have developed several AI tools that can assist companies once the data has been gathered, including:
As AI capabilities continue to improve, we will continue to look for ways to integrate AI into Zero Pro to help companies achieve their goals. Especially in areas that can help companies automate complex analysis that is currently performed manually.
2024 was a difficult year for Sustainability. At the start of the year, the pressure from investors to make more progress in this space continued to be significant and companies continued to invest heavily.
By the mid year point, however, the wheels started to come off and many large companies realised that the returns on investment simply were not there. Sustainability teams started to be scaled down and investor pressure moved towards shoring up the revenue generation activities.
By the end of the year, Sustainability had become quite a toxic subject and not many were interested in engaging in conversations about it.
As we spoke to more companies about their sustainability journies, it started to become clear that what companies thought they knew about their supply chains was not as accurate as they thought. The compliance journey that many companies had been on in recent years has told us a lot more about who the direct suppliers are, but not at a level that allows us to effectively calculate environment impact.
The requirements of companies was actually much more basic than we had originally thought. We needed to build a product that allowed companies to fully understand their supply chains, the locations of the site of manufacture, how goods are moved around the various stages and where the input materials are sourced from at each stage.
From our learnings in 2024, we realised that the design of Zero Pro actually solved a lot more problems than just environmental impact. In fact, we started to understand that without a better data on the activities within the supply chain, spending money on sustainability is premature.
There are many other consideration that companies need to take into account before they start looking at sustainability. In fact, we believe that that environmental impact is an output from an optimized supply chain, not the other way around.
The Zero Pro we have today is a total supply chain optimization and analytics platform that allows companies to achieve:
Every conversation we have with a company sparks new ideas and new ways to improve the product. We are committed to continue adding new features on a regular basis and to continue to improve the product.
We see this evolution never ending as the world is never static and the needs of companies will continue to change. We see Zero Pro as an integral planning tool for companies to use to help them understand their supply chains and the impact of changes they make.