Why sustainable engineering is good business
Sustainable engineering is not just good for the environment, it also improves capital and operational efficiency, which brings financial gains, highlights Amish Sabharwal, Executive Vice President, Engineering Business Unit, AVEVA.
COP26 saw the world’s nations come together and make new environmental pledges, including a 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.
However, we all know that it will take more than government pledges to keep the global temperature rise below 1.5°C.
Industry has a key role to play in fighting climate change, which is why we’re seeing the prioritisation of environmental, social and governance (ESG) goals growing across all sectors, with many organisations making a pledge to achieve net zero by 2040.
Investors now focus on sustainable outcomes
This is, of course, the right thing to do, but it’s also becoming a business necessity as investors turn their back on investments that don’t support sustainable outcomes. Investment and asset management firm BlackRock, for example, has made commitments to extend funding exclusively to companies that demonstrate progress against their specific ESG initiatives.
Today, moving towards greener capital projects and operations isn’t only to gain regulatory approval, it’s also needed to secure access to funding. And investors aren’t doing this out of the kindness of their heart. They understand that sustainable engineering and operations aren’t just ethically commendable, they’re good business, too.
Sustainable engineering and operations offer financial gains
There’s a growing body of evidence pointing out that higher sustainability performance converts into a better financial performance. An impressive 90% of studies on the topic found that high ESG standards reduced companies’ capital costs and that 80% show a positive correlation between stock price performance and good sustainability practices.
One of the easiest ways to discover potential sustainability gains is through digital transformation.
The latest technologies can help you design sustainable plants more quickly, and also build and run them more efficiently as, according to Deloitte, digital transformation can provide a 5–10% reduction in build costs and a 10–20% reduction in operational costs.
Digital transformation also benefits existing brownfield sites by enabling improved decision-making and real-time performance optimisation. Driving both efficiency and sustainability initiatives forward simultaneously, benefits can include reduced energy consumption, waste and emissions.
This is achieved through the 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 can help reduce operational and maintenance costs by approximately 20%; dramatically reduce fuel costs by 28%; significantly improve asset safety, efficiency and reliability; and drive productivity, all by providing fast and accurate data about what is happening across the business.
Sustainability is driving digital transformation
It’s understandable then, that a recent AVEVA survey found that 85% of industrial leaders plan to drive sustainability by increasing their investment in digital transformation over the next three years.
Two-thirds of organisations believe the ability to share data sets across teams in real time will have the greatest impact on sustainability, while significant sustainability gains can also come from solutions such as data monitoring. Digital solutions like cloud computing, machine learning, AI and digital twins will be needed to achieve these capabilities.
Take multinational business Henkel, for example. The laundry and homecare giant used an energy monitoring system to analyse and lower energy use by 16% year-on-year, saving it €37m (AU$54m) 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 the energy efficiency, and therefore sustainability, of its Germany-based brownfield sites.
“Process simulation can directly determine the optimal energy-efficient process by simulation-based optimisation. When comparing the optimal process with the actual energy consumption directly it reveals the inefficiencies of our processes and opportunities for improvement,” said Christian Redepenning, Covestro’s Global Technology Expert, at a recent AVEVA webinar on building a sustainable chemical industry.
Then there’s Aker Carbon Capture’s implementation of a single engineering platform. This 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, Aker was able to improve collaboration between teams, resulting in increased engineering efficiency which allows them to deliver new carbon capture facilities 50% faster.
“Working in the cloud has meant that 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,” said David Phillips, Head of UK and Investor Relations at Aker Carbon Capture.
“As a company, we’re really focused on accelerating the uptake of carbon capture and to do that we need to reduce the cost of the process and end product we’ll supply our customers. 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.”
Sustainability’s good for business
As organisations focus on sustainability and look for ways to accelerate their path to net zero, they’re discovering more and more that sustainable engineering and operations isn’t just good for the environment, but also for their bottom line.
Digital transformation unlocks the performance benefits of advanced technology to gain efficiencies that both improve sustainability and lower costs. Going green will help keep your business in the black.
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