According to a recent study, artificial intelligence (AI) has the potential to lower the carbon footprint of fast fashion by increasing supply chain efficiency, RagTrader reported.
The study, titled "Unleashing the Power of Artificial Intelligence for Climate Action in Industrial Markets," was co-authored by a group of researchers from around the world, led by professor Shahriar Akter of the University of Wollongong's Faculty of Business & Law associate deanship, and professor David Grant of the UNSW Institute for Climate Risk and Response.
Professor Akter stated that the study's suggested AI framework offers a data-driven approach to address climate threats, focusing on the environment, infrastructure, and market in an effective and systematic manner. This is because AI has the unique ability to collect, integrate, and evaluate massive data sets.
According to Professor Grant, the results of the study have a great deal of potential to assist businesses in meeting their reporting and assurance requirements concerning Scope 1, 2, and 3 emissions, as outlined in the World Resources Institute and World Business Council for Sustainable Development Greenhouse Gas Protocol (2004).
A portion of the research was devoted to Bangladeshi producers, who supply the majority of the clothing for well-known fast-fashion retailers like Primark, Nike, H&M, and others across 150 nations.
Governments and customers have put pressure on major companies in recent years to lower emissions and lessen the environmental effect of their international supply chains.
By 2030, Grant stated, "H&M has committed to a 56% reduction in emissions and 100% renewable electricity in its supply chain and operations." "More and more apparel brands—like Calvin Klein, Tommy Hilfiger, and Next—ask their suppliers to be environmentally and safety conscious and operate green factories."
AI-powered climate service solutions are technologies like big data and machine learning that can reduce “routine, repetitive, simple, and standardised tasks,” Grant explained. These include emission measurement, calculating individual products' carbon footprint, identifying risk factors, forecasting demand to reduce waste, and climate education.
In their study, the researchers surveyed 211 managers at manufacturing companies in Bangladesh with at least one year of experience using basic AI-powered climate service solutions. The findings showed that businesses employing AI-powered climate service innovation models improved energy efficiency, reduced emissions, and increased renewable energy sources.
“AI-powered climate service innovations can enable firms to adopt innovations that reduce the environmental impact of its business activities while improving energy and material efficiency and managing climate-related risks and opportunities,” Grant said.
“They also facilitate mitigation by reducing the firm’s carbon footprint, can identify and manage vulnerabilities, forecast hazards, and provide basic climate research and education to managers and employees.”
The research also found that missions from the global fast fashion industry are estimated to skyrocket by 60 per cent by 2030.
“AI-powered climate service innovation can improve environmental performance in terms of energy efficiency, reduction of wastage, optimum consumption of natural resources, and sustainable eco-design,” Akter said.
“An improved environmental performance can also enhance market performance by enabling firms to access new markets, secure new sales leads, and generate more revenues.”
In the paper, ‘environmental performance’ refers to an organisation’s performance related to pollution control, and market performance refers to the degree to which AI-powered climate solutions enhance profitability and competitive advantage.
“We show the significant impact of AI-powered climate innovations in the fast-fashion industry on two key indicators of firm performance: environmental and market performance,” Akter said. “We demonstrate that environmental performance can substantially impact market performance when a firm has robust AI-powered climate service innovation capabilities.
“We also found that focusing solely on environmental orientation is insufficient, and researchers must explore various technological and market dynamics to understand what constitutes more sustainable innovations in this area.”
Professor Grant added that a key feature of the model discussed in the paper is that it points to how AI can enhance the firm's environmental, social, and governance (ESG) performance and credentials as well as market performance in terms of productivity, efficiency, quality assurance, and overall competitiveness.
“AI can improve a business's long-term sustainability, growth, and profitability. In short, investment in AI makes business sense.” /BGNES