How to reduce our digital carbon footprint by 50%: ESCP Green Hackathon solutions

The planet is experiencing unprecedented climate change.

In the last twenty years, digitalisation has positively impacted the global environment. However, the digital revolution still has its price: because of emissions, consumption, and waste, its environmental footprint is less and less ecological.

It is crucial to recognise the problem and take action to create awareness in people and companies for sustainable digital development.
The Internet alone consumes 10% of the world's electricity and pollutes six times more than ten years ago.
The carbon footprint of our digital devices and the systems that support them represent approximately 3.7% of global greenhouse gas emissions. And it is expected to double by 2025.

We must act now to reduce our Digital Carbon Footprint!

THE CHALLENGE
On November 9, 2021, the ESCP Turin Campus Career Service & Corporate Relations team brought together 17 companies and challenged our students with a Green Hackathon focused on the Digital Carbon Footprint. More than 150 ESCP students, divided into 31 groups and supported by 37 mentors, competed to design innovative sustainable ideas to reduce the Digital Carbon Footprint of a company by 50% in one year.
ESCP students had only six hours to prepare a 15-second video describing their ideas and a one-page report detailing the practical requirements to transform the concept into reality. The results were judged by a jury composed of Alessandro Lanteri, Paolo Salza, Brooke Hopkins, Martina Spriano and Christophe Debuysscher.

THE FINALIST PROJECTS

The jury, as well as the mentors, were impressed by the quality and value of the projects proposed by the 31 ESCP student teams. Three of them were selected to pitch their projects during the final leg of the event:

Greentopia, made up of Fabio Belfiore, Giovanni Francia, Florindo Sarpi, Sidney Togu, Matteo Trulli, presented a proposal to limit the storage of useless data on the cloud by implementing an expiration date system on the data with the aim to drastically limit energy consumption.
Rose, made up of Michele Currado and Louise de Blommaert, designed a monthly competition for the most eco-friendly employee, based on the assessment of the efficient use of energy versus productivity. In order to help the company reduce its digital carbon footprint, the team has sought to increase the employees' awareness of the topic, making them play an active role in this value shift.
Susties, made up of Sophia Bernardy, Li Biao, Raffaele Campione, Quentin Cheret, Miguel Ulises Castro Espinosa, proposed a project to make data servers’ accounts as circular as possible. To do so, they decided to follow the framework of the 7 Rs of Sustainability: Rethink, refuse, reduce, re-choose, reuse, repair, recycle. For example, one of the suggestions for the R of recycling was to recycle the heat generated by data centres.

The latter was voted the winner of the "ESCP Green Hackathon | Digital Carbon Footprint".

Miguel Ulises Castro Espinosa at the "ZED - Zero Emission Digital" conference

THE PRIZE
The winning team Susties had the opportunity to present its project at the "ZED - Zero Emission Digital" conference, part of the IAB Forum 2021, organised by IAB Italia, on November 16.
Assistant Professor Alisa Sydow, game master of the Hackathon, and Miguel Ulises Castro Espinosa, ESCP MBA in International Management student and representative of Susties, participated in Milan's event.
The winning team also will have an exclusive lunch with a VIP from Davines and get to visit its innovative and sustainable plant.

SPECIAL THANKS
The second edition of the ESCP Green Hackathon was amazing, thanks to the efforts of all the people who made it possible. Special thanks to the game master, Assistant Professor Alisa Sydow, and Prof Francesco Rattalino, who kicked off the event, the jury members, the mentors and Turin Campus Career Service & Corporate Relations team.
Special thanks go to the seven inspirational speakers: Elena Chisena, Mauro Bombacigno, Francesco Mondora, Heiner von Brachel, Helena Babelon, Fabio Cancarè, Alberto Riccabone, to our technical partners Plesh and IAB Italia, and to the 17 companies who participated in the Hackathon: AlixPartners, Avio Aero - a GE Aviation Business, The Adecco Group, Boston Consulting Group (BCG), BNP Paribas, CACEIS, Davines, Eaton, Edison SpA, Electrolux, Facile.it, Free2Move eSolutions, PROMETEON TYRE GROUP, Reply, TeamSystem, U.G.A. Nutraceuticals Srl, UniCredit.

Congratulations to all the participants on your great work, and thank you for helping raise awareness about the Digital Carbon Footprint.

Campuses

Turin

ESCP Green Hackathon | Digital Carbon Footprint

Worried about our digital carbon footprint? Join us in a unique event: the ESCP Green Hackathon | Digital Carbon Footprint on November 9th. Now it is time to think about how companies can reduce their digital carbon footprint!

Turin

ESCP Green Hackathon: shaping a more Sustainable Future

News 23/04/2021

Turin News

ESCP Green Hackathon: shaping a more Sustainable Future

AlixPartners has challenged ESCP students with a Green Hackathon. They were invited to contribute their ideas on how to create an ecological, sustainable and green future.

Turin

Option E Improbable seminar - Entrée – Plat – Déchets

News 06/04/2021

Turin News

Art Thinking: imagine the improbable

The ESCP Turin Campus Option-E cohort of students from the Master in Management kickstarted the semester with a disruptive workshop: the Improbable seminar, a 3-day training course based on the Art Thinking method. This flexible method, designed by Sylvain Bureau, Scientific Director of the Jean-Baptiste Say Institute and ESCP Professor, makes it possible to create the improbable with certainty.

Turin

Foreign ownership: what it changes for the auditing of EU-listed firms and their governance

The free flow of capital across the globe finances an increasing number of EU firms, and with geographically distant ownership come issues of control. So to improve management monitoring, foreign owners tend to resort to auditing, and in the process, shape the governance of the companies they invest in. In research picked up by The European, Prof. Paul Pronobis and his co-author studied audit fees to shed light on these mechanisms.

From wealthy Chinese purchasing french vineyards to the GAFAs implanting data centres in Ireland or US hedge funds taking stakes in the Deutsche Boerse, examples of foreign investments in Europe abound. Indeed, the European Union (EU) is the top global destination of foreign investment. To give an order of magnitude, according to the European Commission foreign direct investment stocks held by third-country investors in the EU amounted to €7,138 billion at the end of 2019. Due primarily to the liberalization of many capital markets, foreign ownership has thus become an increasingly important source of financing for EU companies. This has direct implications for the audit market, specifically, for audit fees, as a new research paper in The European Accounting Review reveals. This in turn offers insights into the mechanisms that lead to changes in corporate governance across the world. The link between foreign ownership and auditing may not be instantly obvious, but it is explained by the agency problems that come with foreign ownership.

Auditing to improve control of assets

According to agency theory, potential opportunistic behavior by a firm’s management is a main concern of the firm’s owners. “Here, an external auditor serves as an appropriate instrument to mitigate such information asymmetries and the corresponding agency problems,” write the authors, professors Paul Pronobis (ESCP Business School) and Jonas Schaeuble (Hochschule Magdeburg-Stendal). “Although the threat of opportunistic behaviour by the management and the related need for effective control of it by the owner is innate to all firms, both aspects are likely more pronounced in foreign-owned firms,” they explain. While the geographical (and cultural) distance between say, the Silicon Valley and the suburbs of Dublin, is not comparable to that between London and 19th-century trading outposts along the Congo River for example, it does represent a disadvantage for foreign owners: “They are unprivileged in terms of information gathering and management monitoring” compared to their domestic peers, as the researchers specify. So it can be expected that they will be particularly reliant on auditing in order to increase the reliability of the firm’s financial numbers.

High-quality auditing more likely with foreign ownership

The two researchers explored the relationship between foreign ownership and auditing through empirical tests based on an international sample of more than 1,700 listed firms and corresponding financial, audit and ownership information from twelve Western European countries between 2005 and 2016. They indeed found that foreign ownership was significantly positively associated with audit fees. Why examine fees? The objective of foreign owners is to reduce the (heightened) information asymmetry through higher audit quality. The auditor needs to understand the business, have relevant work experience (e.g., be authorities in their field/industry), have international presence, among other things, hence will command higher audit fees.

Premium auditing as an investor protection mechanism

In their paper, Pronobis and Schaeuble also predict – and confirm – a greater willingness of foreign owners to pay higher audit fees for the statutory audit if the foreign owner is located in a country with a high quality of governance and investor protection. (This they measured with data taken from the Worldwide Governance Indicators (WGI) project.) The origin of the foreign owners does play an important role with respect to the demand for audit services, as foreign owners from countries with strong investor protection internalize and promote the importance of auditing as an effective control mechanism from their ‘home-country’. As foreign investors need to protect their home-country investors, they encourage the firms that they invest in to implement the same corporate governance practices that they themselves are subject to in their home country. In other terms, auditor selection and thus audit pricing are a mechanism through which foreign investors shape the firm’s governance.
In addition, the researchers found that auditor selection is a mechanism through which foreign investors shape financial reporting comparability. “As large audit firms use a highly-standardized audit model to ensure audit quality, foreign investors try to induce their target firms to switch to BIG4 auditors (KPMG, PwC, Deloitte, and Ernst & Young). These highly-standardized auditing models ensure audit quality through extensive auditing procedures and generally increase the cost of an audit,” they explain.

Concentrated ownership behind increased demand for audit services

The authors' third finding concerns the reinforcing effect of higher levels of foreign ownership. When the percentage of ownership held by the foreign investor increases, and thus becomes more highly concentrated, the ability of the foreign investor to influence corporate governance decisions, such as the firm’s demand for audit services, increases. Accordingly, they found that the price of an audit increases with the percentage of foreign ownership.

In conclusion, these results shed light on the underlying mechanisms through which foreign ownership influences investee firms’ governance, particularly audit contracting decisions. While previous studies had documented that international portfolio investment encouraged effective monitoring practices around the world, this new study extends these findings by showing that those practices also require more extensive auditing procedures. It also establishes the quality of governance and investor protection of the foreign investor’s home country as an important factor to affect the design and effectiveness of the firm’s implemented governance system. These findings also suggest that corporate governance practices, in terms of auditing, travel around the world through foreign owners’ cross-border portfolio of investments.

Campuses

Paris