Earth Observation is a collective term for perhaps the most important toolbox of our time.
Together, Earth observation tools allow governments, companies and investors to make informed decisions about sustainability issues from climate change and methane emissions to monitoring illegal deforestation and suspicious shipping activity.
The Citi Research report analyzes the nascent technologies behind Earth Observation, solutions provided and the three major sectors of the Earth Observation ecosystem.
Earth imaging can be done from planes, of course. But satellites are also increasingly important as they provide the means by which we can observe vast areas of the planet and monitor their development over time.
They use technology such as hyperspectral imaging to capture detailed data about the properties of materials. Scientists can then use these to assess atmospheric composition; the quality of water, soil and air; different pollution types; crop health; prevalence of diseases; geological threats and opportunities; and forest fires or areas vulnerable to them.
How Satellite Technology Can Assist Climate Action
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The authors divide the Earth Observation ecosystem into three buckets of activity:
1) hardware original equipment makers (OEMs),
2) data generators
3) platforms/analytics.
- Hardware OEMs focus on designing and building spacecraft for government and commercial contractors.
- Data generators’ focus is operating satellite constellations that generate different types of data.
- And companies focused on platforms and analytics procure data from data generators and either process it to make it easier for customers to manage or analyze it to help solve problems.
From an environmental perspective, the authors note, Earth Observation facilitates high-level decision-making, letting governments make informed choices in tackling environmental issues. It also gives companies the ability to analyze supply chains and environmental impact more rigorously and offers investors the chance to hold those companies to their commitments.
Finally, Earth Observation technologies make data accessible to a broad demographic beyond policymakers, raising public awareness of corporate actions’ environmental impact. That could bring about an era of far greater transparency and corporate responsibility.
Addressing two climate problems
Two fronts in the climate change fight could particularly benefit from Earth Observation’s tools: methane emissions and deforestation.
The authors note that methane emissions can now be detected from space, which is important since scientists calculate that methane is 80 times more potent than carbon dioxide as a greenhouse gas.
Methane leaks from gas pipelines, oil wells, fossil-fuel processing plans and landfills; reducing methane emissions is seen as one of the fastest ways to address rising greenhouse gas emissions and slow climate change.
Companies that source or place key commodities such as palm oil, beef, soy, cocoa, rubber and timber on the EU market are now under increased scrutiny to show that these products aren’t linked to illegal deforestation and don’t contribute to forest degradation, with operators given 18 months to accelerate supply-chain monitoring to meet new requirements.
Geospatial ESG’s arrival
Geospatial AI, the report says, has the potential to deliver greater supply-chain transparency and accountability, from the footprint of commodity supply chains to fugitive methane emissions.
The authors note research that suggests ESG insights can be scaled globally to help investors and financial institutions better understand environmental impacts at different scales and across different applications.
For example, Earth Observation has been used for many years by the insurance industry to model catastrophe risk and determine the extent of damage from an extreme weather event. The insurance sector is arguably at the cutting edge of modeling how such events are likely to change in different climate scenarios.
A growing interest in determining environmental risk and financial materiality has coincided with improvements in satellite technology and machine learning, spurring the emergence of data providers with in-house expertise that can be applied to challenges such as methane emissions and commodity-linked deforestation.
For more information on this subject, if you are a Velocity subscriber, please see the full report here Global ESG & SRI: The Earth Observation Ecosystem: A Critical Climate Enabler.
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