Leveraging industrial software to optimise business processes boosts the bottom line and contributes to a healthier planet, writes Amish Sabharwal, executive vice president, engineering business unit, at AVEVA.
Post-COP27, held in Egypt in November 2022, countries the world over are urgently working towards emissions reduction goals. Several nations have made good on fresh environmental pledges, including the US-China agreement to boost cooperation in combating climate change; India’s pledge to achieve net zero by 2070; and 23 countries committing to phasing out coal.
Business also has a key role to play in fighting climate change, which is why we are seeing the prioritisation of environmental, social and governance (ESG) goals growing across all sectors, with many organisations working towards net zero by 2040.
However, it will take more than discussions and pledges to keep the global temperature rise below 1.5 degrees Celsius.
Regional ESG focus
Investors now focus on sustainable outcomes. Of course, this is the right thing to do, but it is also becoming a business necessity as investors turn their backs on investments that don’t support sustainable outcomes.
For example, investment and asset management firm BlackRock has made commitments to extend funding exclusively to companies that demonstrate progress against their ESG initiatives.
Today, moving towards greener capital projects and operations isn’t only to gain regulatory approval, it’s needed to secure access to funding.
Sustainability drives profitability
There’s a growing body of evidence pointing to the fact that higher sustainability performance converts to improved bottom lines. Most ESG studies reveal a link between high sustainability standards and reduced capital costs. Swathes of global reports evidence a positive correlation between stock price performance and good sustainability practices.
One of the most powerful ways to quickly and easily discover potential sustainability gains is through digital transformation.
The latest technologies can help design sustainable plants more quickly, and build and run them more efficiently. According to international professional services firm Deloitte, digital transformation can provide a five to 10 per cent reduction in build costs and a 10 to 20 per cent reduction in operational costs.
Digital transformation also benefits existing brownfield sites by enabling improved decision-making and real-time performance optimisation. The benefits of simultaneously driving forward asset efficiency and sustainability initiatives can include reduced energy consumption and less waste and emissions.
This is achieved through use of technologies such as artificial intelligence (AI), process simulation, cloud computing, big data analytics and digital twins to operate assets sustainably by understanding their performance and predicting future behaviour.
The insights provided by digital technologies can help reduce operational and maintenance costs by approximately 20 per cent; dramatically reduce fuel costs by 28 per cent; significantly improve asset safety, efficiency and reliability; and drive productivity, all by providing fast and accurate data about what is happening across the business.
Climate concerns driving digital transformation
A recent AVEVA survey found 85 per cent of industrial leaders plan to drive sustainability by increasing their investment in digital transformation during the next three years.
A case in point is multinational chemical and consumer goods company Henkel. The laundry and homecare giant used an energy monitoring system to analyse and lower energy use by 16 per cent year-on-year, saving 37 million Euros ($57 million) to date and playing its part to shape a more sustainable future.
Another example of digital transformation’s effect on sustainability comes from Covestro, which used process simulation to improve energy efficiency and sustainability of its Germany-based brownfield sites.
Another successful case study to glean lessons from is Aker Carbon Capture’s implementation of a single engineering platform. This has helped develop new sustainable processes such as carbon capture by breaking down data silos and increasing engineering and design efficiency.
Using integrated engineering and project execution technologies on the cloud, the company has been able to improve collaboration between teams, resulting in increased engineering efficiency which allows them to deliver new carbon capture facilities 50 per cent faster.
“Working in the cloud has meant our people have been able to engage much more easily across projects and geographies, and we’ve been able to optimise the way we work together,” says David Phillips, head of UK and investor relations, Aker Carbon Capture.
“We’ve found digital transformation has helped us standardise our processes and improve efficiency, and we’ve been able to reduce our engineering man hours dramatically.”
Improved efficiency is better for stakeholders and the planet
As organisations focus on sustainability and look for ways to accelerate their path to net zero, they’re increasingly discovering that sustainable engineering and operations isn’t just good for the environment, but also the bottom line.
Digital transformation unlocks the performance benefits of advanced technology to gain efficiencies that improve sustainability and lower costs. Ultimately, optimised operations are a triple win for businesses, stakeholders and the planet.