Is it possible to be both sustainable and profitable? Many would argue these are conflicting objectives. But are they? Sustainability commitments are not just better for the planet; they are better for business, too.
In its research on sustainability imperatives, Accenture found that, "between 2013-2019, companies with consistently high environmental, social, and governance (ESG) performance enjoyed 4.7 times higher operating margins and lower volatility than low ESG performers over the same period.
The good news is that digital technologies make it possible for companies to not only monitor and reduce the amount of energy and raw materials used in producing their products but to also ensure they are resourced sustainably. All without negatively impacting their financial performance.
By utilising digital technologies, companies ensure their operations and supply chains are both sustainable and profitable by, first, tracking and evaluating the carbon footprint of energy sources, raw materials and parts across all production lines and equipment in the plant and supply chain (efficient production).
All efforts to improve production efficiency are strongly linked to improvements in sustainability. With the help of smart connected equipment, digitisation and analytics, companies can understand the carbon impact of energy sources, raw materials and parts and make sure all of these are used in the most efficient ways across a plant's production lines and equipment.
Second, taking sustainability into consideration during the various stages of a product's life cycle (green product).
Today, many of us will want to minimise our individual impact on the environment. We want to know the products we buy have been designed and manufactured in an environmentally responsible way, and that they can be responsibly disposed of or recycled at the end of their lives. In other words, the product's manufacturer's design criteria should be based on '5R' principles or how the final product could be Repaired, Reused, Refurbished, Remanufactured or Recycled. This is a critical part of achieving carbon neutrality for the business, its supply-chain and the product itself.
Third, making a public social commitment to environmental sustainability by setting science-based targets (social commitment).
Customer and investor demands for sustainable operations continue to rise and before long they will affect the capital and sales revenues available to industrial businesses. Companies must take action now to ensure the very survival of their businesses. This means making public social commitments to environmental sustainability by setting science-based targets to reduce emissions and slow climate change, achieving net carbon neutrality by offsetting the carbon footprint of both their operations and their supply chain.
Digital technologies are available today to make this sustainability challenge a reality. One such solution is Schneider Electric's EcoStruxure, dedicated to solving real-world sustainability and efficiency challenges.
Carol Koech, Country President, Schneider Electric East Africa
