By Joe Craparotta, Vice President IT Business
Progress made by organisations to improve their sustainability performance and reporting in recent years has certainly been encouraging. Furthermore, according to Schneider Electric’s Sustainability Index, over two-thirds of businesses agree that Australia must meet net zero emissions targets to remain economically competitive.
Even more optimistic, is the 77 per cent of businesses claiming that sustainability transformation is placing companies at the forefront of the competition.
However, as the race to reach emissions targets accelerates, the survey reveals there is still a long road ahead. Just 52 per cent of respondents admitted to discussing or having a decarbonisation strategy already implemented.
Problematically, with the world's attention focused on the alarming state of planetary stewardship and the credibility of sustainability claims facing scrutiny, numerous organisations, including high-profile ones, are now facing legal repercussions for making misleading or unsubstantiated sustainability claims—a phenomenon commonly known as "greenwashing". Its repercussions generate a cloud of scepticism and increasingly stringent standards and regulations.
The sustainability conundrum in mission-critical environments
In today's business landscape, organisations often face challenges transitioning to greener and cleaner practices due to concerns about the associated costs of materials, resources, and technology.
However, the cost of not prioritising sustainability far outweighs the initial investment required to adopt environmentally conscious business practices. It is crucial to consider that global warming could exceed 1.5°C above pre-industrial levels by the early 2030s.
While enterprises today grapple with the complexities of incorporating sustainable business practices, it is important to recognise that sustainability is an essential driver of growth. In reality, financial and operational performance and sustainability are intertwined and mutually beneficial, relying on efficiency to support cost reduction.
The Sustainability Index found that 55 per cent of businesses claimed they were driving investments in digital transformation to accelerate sustainability efforts. Furthermore, 41 per cent are prioritising automation, and 22 per cent are embracing electric vehicles (EVs). The figures outlined in the report are indicative of Australian businesses’ commitment to the acceleration of sustainability efforts to meet climate targets.
Particular challenges arise when organisations seek to align their mission-critical initiatives with sustainability goals. It can be complex to find the right balance between operational efficiency, cost-effectiveness, and environmental stewardship. However, it is clear that to reach sustainability goals, businesses are urged to move beyond outdated methods and rely more heavily on digital tools to help them understand their energy usage.
Organisations must recognise that sustainability is not just a moral imperative, but also a strategic business imperative. Increasingly, failing to address sustainability issues can lead to reputational damage, regulatory non-compliance, operational inefficiencies, and missed opportunities for innovation and cost savings.
How business leaders can shape companies’ sustainability DNA
The cornerstone of a sustainable transformation lies in examining the core values that underpin an organisation's operations. It is the duty of business leaders to take charge and implement the appropriate solutions that can reinforce the company's sustainability DNA.
Leaders have the power to shape the culture, policies, and practices that define how the company operates. By embracing sustainability as a guiding principle, leaders can pave the way for a transformation that aligns business objectives with environmental and social responsibility.
Businesses have a tremendous opportunity to enhance their long-term value by embracing sustainability at strategic and operational levels. Taking proactive measures to minimise environmental harm and ensure long-term resilience is crucial, and one way to achieve this is by adopting circular economy practices.
In the 2022-2023 Budget Review, the Australian Government committed $83.1 million over 5 years to support and expedite Australia’s transition into a more circular waste economy through the restructuring of Australia’s waste and recycling sector.
Schneider Electric’s circular economy approach aims to maximise the usability and value of products, components, and materials while minimising waste generation. It involves designing products with durability and recyclability in mind, optimising resource use throughout the entire lifecycle, and actively seeking opportunities for reusing materials and extending product lifetimes.
As part of our sustainability commitment, Schneider Electric continues developing innovative approaches that reimagine product design, business models, and services with circularity in mind. For example, EcoFit™, an approach used by Schneider Electric to modernise the electrical, critical power, cooling, and automation systems that sustain customer’s business operations, all while enhancing their environmental credentials. This involves outfitting businesses with advanced, digitally driven electrical solutions and active engagement in sustainable, circular practices.
Customers are increasingly seeking sustainable solutions and are more likely to choose businesses that align with their values. By offering products and services with a clear commitment to circularity, we can build trust and strengthen relationships with our customers, fostering long-term loyalty and competitive advantage.
Embracing digital technologies with the potential to decarbonise industries is a key driver for businesses to achieve their net zero greenhouse gas emissions goals more expeditiously. Recent analysis indicates that digitalisation procedures could save 6.6 megatonnes/year of CO2 emissions over 10 years at a negative abatement cost.
Technology has evolved to enable ‘Electricity 4.0’, the convergence of digitalisation and electrification, which offers enhanced control, optimisation, and analytics, revolutionising our approach to energy efficiency and therefore sustainability.
In the oil and gas industry, for instance, edge computing plays a significant role in improving sustainability, resilience, and cost savings. Edge bolsters the reliability of smart grids by swiftly identifying alternative power sources in the network during outages, ensuring uninterrupted power supply to customers until the main delivery system is repaired and operational.
Addressing climate change requires more than a quick fix. Leaders play a major role in ethically fusing sustainability and technology. They can spearhead initiatives to evaluate and monitor the environmental impact of their operations, promoting sustainability throughout the organisation. In doing so, they also enhance their ESG performance and effectively deliver on the sustainability goals that are demanded by customers.
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