How Digital Technology Facilitates Compliance With ESG Targets
Around the world, industrial enterprises of all kinds are racing against the clock to keep planetary warming to 1.5°C, and to supportnet-zero carbon emissions by 2050. Public- and private-sector companies alike have committed to supporting the energy transition – but now comes the difficult task of making good on those promises.
Businesses in mature industries such as oil and gas, mining and metals, and power generation and chemicals will need to address new business imperatives if they are to build an alternative, sustainable energy landscape while maintaining current operations continuity.
Sustainability reporting on the rise
The playing field has changed, and businesses must adapt to ensure they survive – and thrive. Regulatory alignment has begun to coalesce around stricter Environmental, Social, and Governance (ESG) regulations. Alongside, more than 80% of companies worldwide now report on sustainability, a figure that rises to 90% for the largest corporations, KPMG reports.
If they are to maintain their social license to operate, companies must also comply with ESG pressures from their communities and from consumers who are looking for more sustainable solutions. Consumers are now embracing a more sustainable lifestyle, whether in terms of consumer goods or clean energy alternatives, and are questioning brands about their environmental credentials, increasingly making spending decisions in line with their convictions.
On the supply side, businesses must reconcile these imperatives with volatile prices,increasing labor shortages, and continued supply chain disruptions as the pandemic continues to rewrite the operational playing field.
Digital transformation key to greening the value chain
With energy sector businesses forced to operate within these new constraints, digital technologies will be indispensable in supporting the transition to greener value chains at both the upstream and downstream ends. McKinsey estimates that up to 80% of the technologies needed to reach net zero are already deployed, some 15% are in prototype trial, and a further 5% are in the R&D process.
From AI-infused analytics to data-led platforms that enable industries to unify information streams for responsible decision-making, the smart solutions that empower companies and help them identify ways to minimize environmental impact and costs are already available today.
Harness digital tools to facilitate ESG imperatives in 3 ways:
Energy companies transitioning to cleaner businesses, such as the ones related to wind, solar, and biofuel, require new greenfield assets or may need to modernize existing installations. A data-centric approach, combined with the latest technology, can drive faster and more effective engineering cycles across the project’s life with an eye on the sustainability footprint.
Integrating artificial intelligence-infused simulation with the engineering database can rapidly enable speed and deliver the breath of insights needed to build the most carbon- and energy-efficient plants at the very first attempt. There is no room for error given the short window of time available to achieve our net-zero ambitions, as well as the increased transparency around ESG reporting.
As the pandemic has shown, market conditions can change overnight. By simplifying and standardizing downstream supply chain management, businesses can quickly adapt to market changes and capitalize on emerging economic opportunities.
Migrating to a unified enterprise platform with built-in data management and embedded business process workflows builds digital resilience while plugging value leaks, reducing waste, sustaining productivity, and supporting quicker decision-making in service of a circular economy.
Digital transformation serves as a proven buffer against continuing uncertainty that impacts workforce productivity. When companies leverage AI and the cloud for edge-to-enterprise visualization and intelligent data management, staff gain clear and contextual access to data, wherever they are.
Not only can they execute operational processes remotely, but they can also collaborate with colleagues and business partners anywhere around the world, thanks to virtual environments that replicate real-time operations connected to a reliable operational data management source. Greenhouse gas emissions can also be reduced along the way, through reduced travel and minimal use of materials such as plastic and paper.
Digital technology can improve your sustainability game
Technological innovation can serve as one of the primary building blocks to realizing a net-zero pathway when deployed alongside other solutions as part of a multi-layered approach, including lower carbon energy sources and ramping up efforts to improve carbon capture, utilization, and storage.
As a recent AVEVA survey shows, the energy industry is committed to driving to net zero and tackling climate change. Nine out of 10 businesses see sustainability as a key focus areafor their companies over the next three years. In fact, 89% of C-suite leaders are committed to helping tackle climate change.
As momentum builds around the energy transition, companies that act now to integrate technology in service of ESG goals will drive long-term value through to 2050 and beyond.
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