research Archives - Energy Management Summit | Forum Events Ltd

Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd Energy Management Summit | Forum Events Ltd

Posts Tagged :

research

Cutting-edge innovations ‘driving investment boom’ in green hydrogen

 960 640 Stuart O'Brien
By:

The clean energy landscape is gaining significant momentum in 2024, fuelled by substantial support from major economies and venture capitalists propelling the advancement of green hydrogen technology.

Recent months have witnessed a pronounced uptick in interest and investment in this domain. At the forefront of this innovative wave is green hydrogen, a pioneering technology for producing net-zero, clean fuel.

This rising trend is also fueled by several high impact innovations in green hydrogen technology, as highlighted by Technology Foresights, a proprietary framework developed by GlobalData.

Globally, the surge in interest surrounding green hydrogen is unmistakable, underscored by significant developments in various regions. In India, projects valued at $2 billion have received clearance, with plans to invest up to $12 billion in the coming years dedicated to green hydrogen production. Mirroring this commitment, Italy has earmarked a substantial $1.1 billion fund specifically for the establishment of electrolyzer factories crucial to green hydrogen processes.

Notably, Morocco is aligning with this global trend, designating 1 million hectares of land for green hydrogen production. This momentum is further accentuated by substantial venture capital investments, as evidenced by leading investors such as TPG Capital and Temasek injecting multimillion-dollar funds into green hydrogen startups in recent months. These developments underscore a growing global interest in green hydrogen, propelled by both governmental initiatives and private sector investments.

Sourabh Nyalkalkar, Practice Head of Innovation Products at GlobalData, comments: “The evolution of hydrogen production technologies reflects a significant shift from carbon-positive to net-zero carbon solutions. The industry has transitioned from conventional syngas or methane reforming methods, associated with carbon emissions, to advanced technologies leveraging renewable sources like solar and hydro for hydrogen production. Notably, the innovation radar for green hydrogen highlights emerging technologies such as photocatalyst electrodes and electrochemical water splitting, anticipated to be impactful innovations in the long run. This progression underscores a concerted effort towards sustainable and environmentally friendly hydrogen production methods.”

Key players in green hydrogen production technology, such as Toshiba, Panasonic, and Topsoe, are at the forefront of innovation in photocatalyst electrodes. These industry leaders are expanding their focus beyond traditional materials like titanium and zinc, aiming to develop highly efficient electrodes capable of facilitating electrochemical reactions for hydrogen production. Importantly, these major players are securing contracts from public entities to establish hydrogen production facilities. For instance, Panasonic received orders from Greater Manchester, while Topsoe successfully secured projects from the Australian government, supplying technology crucial for green hydrogen production.

Nyalkalkar concludes: “The green hydrogen startup landscape is currently ablaze with innovation, attracting substantial investments from prominent stakeholders worldwide. In the first quarter of 2024 alone, leaders in the photocatalyst electrode startup landscape monitored on Technology Foresights, including Sunfire, Ohmium, and Verdagy, have collectively raised nearly $500 million from top-tier venture investors. This surge in investment and innovation activities suggests a promising future for the industry, prompting stakeholders in the energy sector to stay vigilant.

“To capitalize on this growing momentum, strategic pivots and exploration of new growth opportunities through collaborations and acquisitions are essential for securing a foothold in this rapidly evolving and promising space.”

Oil and gas outlook set to be dominated by geopolitics and supply chain dynamics this year

 960 640 Stuart O'Brien
By:

The oil and gas industry has witnessed a considerable upheaval in its supply chains amid the protracted Russia-Ukraine conflict and renewed tensions in the Middle East. Both of these conflicts could potentially disrupt global oil and gas supplies in 2024, and hence, the themes of geopolitics and supply chains are the hot topics for this year.

It is therefore important for the oil and gas industry to assess the impact of these themes while charting out their growth plans, says GlobalData.

GlobalData’s thematic report, “Top 20 Oil & Gas Themes 2024,” reveals the leading themes that could have a significant impact on oil and gas operations in 2024. Energy security concerns are expected to be the major driver for the oil and gas trade in 2024. Furthermore, the pace of the global transition towards clean energy is likely to be slow in 2024, as several countries are confronted with issues of energy security and inflation.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, said: “The fallout of the Russia-Ukraine conflict has resulted in the restructuring of global energy supply chains in the last two years. Moreover, global energy markets must also have to contend with rising tensions in the Middle East. Thus, geopolitics and supply chain dynamics will impact the decision making of oil and gas companies in 2024.”

The report also puts emphasis on the ESG theme and the themes contributing to the global energy transition. Within ESG, the environment and social aspects of oil and gas operations are the focal point of discussion as they are important for long-term sustainability. Newer industry themes that support the energy transition towards zero-emission technologies, such as renewables, low-carbon hydrogen, carbon capture and storage (CCS), and electric vehicles (EV), are evaluated for their potential impact on the oil and gas business in 2024.

Puranik continued: “Profitability is expected to be critical for driving the financing of decarbonization initiatives in 2024. Moreover, the Ukraine conflict has also exposed the vulnerabilities in clean energy generation and, in a way, pushed back the prospect of peak oil for the time being. This is also likely to benefit natural gas and LNG in supporting global decarbonization goals in the medium term.”

The report evaluates traditional oil and gas themes, namely liquefied natural gas (LNG), shale, and integrated refineries, that are enabling companies to remain competitive in the energy market. Shale oil and gas production could reach record levels in 2024.

The report also reveals how disruptive technologies, such as artificial intelligence (AI), blockchain, cloud computing, cybersecurity, the Internet of Things (IoT), robotics, and the metaverse, are impacting the oil and gas industry. Several prominent integrated oil companies (IOCs) have actively sought to digitalize their operations by employing digital technologies. These technologies are bringing in newer work dynamics to improve efficiency, reliability, and operational security.

Puranik concluded: “Oil and gas companies are expected to continue to expand the deployment of digital technologies across their operations in 2024. As the industry prepares to become agile and pursue a long-term energy transition, digital technologies will play a pivotal role in achieving these objectives.”

World Economic Forum urges businesses to help ‘close the climate action gap’

 960 640 Stuart O'Brien
By:

The Alliance for CEO Climate Leaders, a CEO-led community facilitated by the World Economic Forum, has released a new report calling on businesses and governments to shift from incremental to systemic actions to meet climate goals.

The report, Bold Measures to Close the Climate Action Gap: A Call for Systemic Change by Governments and Corporations, was published in partnership with the Boston Consulting Group (BCG) and complements the State of Climate Action report launched prior to the COP28 climate change conference.

According to the analysis, while individual climate action has increased, collectively the sum is not sufficient to reach the level of systemic change needed. There is a 600-plus gigaton gap in national emissions reduction ambition and policy that needs to be closed to limit global warming to 1.5°C. As such, stronger government action is needed.

Meanwhile, looking at CDP data for the 1,000 largest companies globally, likely well over 10% of global emissions are in the supply chains of those companies– showing the dramatic systems impact that the world’s largest companies could have.

“The first UN global stocktake and the first part of this report have highlighted a large climate action gap that we are not on track to close,” said Pim Valdre, Head of Climate Ambition Initiatives at the World Economic Forum. “We need to urgently shift into delivery mode, focusing on immediate actions with outsized impacts. Enabling these actions calls for public-private action to drive the right policies, technologies and financial solutions needed to achieve a system-wide transformation.”

While COP28 showed new impactful steps, such as the global agreements to triple renewable energy and double energy efficiency by 2030, more is needed to deliver on commitments, the report concludes.

The Alliance of CEO Climate Leaders, which consists of more than 120 top companies from diverse industry sectors and regions, representing more than $4 trillion in total revenues and 12 million employees, called for decision-makers at the international climate change conference to shift from incremental actions to those that can transform systems and reach exponential impact.

“While COP28 resulted in very good progress and many companies have already started climate initiatives, the sum of the parts is still insufficient. Companies remain constrained by obstacles such as high costs and interest rates, low customer willingness to pay, or a lack supporting permitting and regulations,” said Rich Lesser, Global Chair of Boston Consulting Group and Chief Advisor to the World Economic Forum’s Alliance of CEO Climate Leaders. “This report brings answers to these obstacles, with examples of practical actions that can transform systems from the inside. If all government and corporate leaders start acting on them now and together, we will go a long way towards the scale of impact that we need.”

Private-sector action

The reports asserts that companies can and should drive systemic impact beyond their internal initiatives, highlighting five actions with the potential for dramatic impact:

Government action

Governments have a large responsibility to deploy mitigation solutions in a just and socially acceptable way. The report highlights five priorities to help close the 600-plus gigaton emissions gap:

  • Move up net-zero targets to 2050 or earlier, increase near-term targets, and raise financial and technical support from higher-income to lower-income nations.
  • Recognize and put a material price on carbon.
  • Double financing and incentives and make public procurement green.
  • Remove obstacles such as permitting lead times, supply chain bottlenecks, skill gaps and social distrust.
  • If progress remains too slow, consider more drastic measures, such as hard technology bans, or massive adaptation and removal investments.

How to deliver these and other critical actions for the net-zero transition will be discussed by business leaders at a meeting of the Alliance of CEO Climate Leaders during the World Economic Forum Annual Meeting 2024.

Digitalisation to be ‘main driver’ of Operational Technology

 960 640 Stuart O'Brien
By:

Almost half (45%) of industrial companies believe digitalisation will be the primary reason that new operational technology (OT) job roles will be created in the next three years.

The research, commissioned by Schneider Electric and carried out by Omdia, polled 407 industrial companies ranging from small and medium enterprises to large companies across western Europe (UK, Germany, France, Italy, Spain, Denmark and Sweden), the US, China, India, and Southeast Asia (Vietnam, Thailand and the Philippines). The study highlighted the scale of the global industrial skills crisis, with talent acquisition a key challenge for more than half of those surveyed (52%).

However, it also identified the cure for this problem. Alongside job creation, over two-thirds (70%) of those surveyed agree that digitalization will help to tackle talent shortages, highlighting the potential of digital tools to deliver more than just productivity and efficiency.

While the skills crisis rages, the industrial workplace is undergoing rapid change. Sustainability goals and advanced technologies, such as Artificial Intelligence (AI) and digital twins, are becoming further integrated into the workforce. The research found that 45% and 47% respectively believe that the increasing requirements of industrial companies to meet environmental and social sustainability goals will require a significant extension of existing job roles in the plant.

“Digitalization doesn’t just benefit productivity and overall efficiency. It’s vital for solving some of the people-centric challenges facing industrial businesses,” said Ali Haj Fraj, Senior Vice President, Digital Factory, Industrial Automation at Schneider Electric. “There’s a real opportunity for industrial enterprises to optimize and enhance OT roles. By reducing the time spent on administrative tasks and enabling people to better fulfil their potential, we can solve many of the key challenges facing these businesses and help build a more sustainable future.”

The survey found that over half of respondents (52%) consider talent acquisition and retention to be a challenge, but one that can be overcome, showing that a level of optimism is shared among industrial businesses around overcoming workforce challenges.

Three in five (60%) believe OT roles will change in the next three years, either moderately (41%) or significantly (19%). Furthermore, a large majority (73%) agree that digitalization will substantially change the nature of work in the next three years. Three in ten (31%) consider quality-control roles to be most significantly augmented or enhanced by digitalization.

The survey also found that in the next three years industrial companies expect new skills will be required in areas like robotics programming and integration (49% of the respondents say they have no or insufficient skills in this area) and data processing, visualization, and analytics (on average more than 30% have no or insufficient skills in these areas). While respondents say they are prioritizing investment in data processing, visualization, and analytics, robotics programming and integration is indicated as only a medium priority for almost half of those surveyed. A key recommendation from the research is thus for industrial companies to work with partners across the industrial ecosystem who can help meet technology skills deficits with solutions, training, and other capabilities to prepare their workforce for the future.

“The changing nature of the industrial workforce is, and will increasingly, necessitate investment in digitalization to empower staff and improve productivity and efficiency,” said Alex West, Senior Principal Analyst, Industrial IoT and Sustainability at Omdia. “If they don’t, the broader and more serious longer-term impact will be on innovation and an inability to mitigate talent shortages.”

The full report, entitled The Future of Work in Industry, can be accessed here.

Photo by NASA on Unsplash

Synthetic biology has ‘vast potential’ across industries

 960 640 Stuart O'Brien
By:

The emerging field of synthetic biology will unlock several new realms of innovation, ranging from environmentally friendly luxury materials to novel cancer therapeutics and even using DNA as a new form of data storage. Not only that, synthetic biology potentially provides advanced solutions to global challenges such as food insecurity, climate change, and plastic pollution.

That’s according to GlobalData research, which explains that synthetic biology, commonly abbreviated to synbio, involves changing the genetic material of existing biological systems by copying, cutting, or moving segments of DNA to give them new functions and characteristics.

GlobalData’s latest report, “Synthetic Biology,” highlights numerous industries, including agriculture, consumer, energy, food, healthcare, industrial materials, mining, packaging, and technology, that will be impacted.

Isabel Al-Dhahir, Senior Analyst in the Thematic Intelligence team at GlobalData, said: “The possibilities of synthetic biology are boundless. Pushed forward by the growing demand for sustainable materials, environmental remediation, and innovative therapies, synthetic biology could transform numerous industries. Growing enthusiasm saw venture capital investment into synthetic biology surpass $1 billion in 2023, a more than tenfold increase since 2016.”

Al-Dhahir continued: “Synthetic alternatives to meat, precious metals, natural fibers, fuel, and medicines, among others, continue to be developed. The environmental benefits of such innovations are often the focus, but these developments will also facilitate the next stage of supply chain management.”

Advancements in synthetic biology could enable lean supply chain management, decrease reliance on imports, and further support reshoring efforts. Accelerated by the COVID-19 pandemic and sustained by the US-China trade wars, supply chain shifts are already visible as countries and corporations try to protect themselves against further disruption.

Al-Dhahir concluded: “Synthetic biology is a very young and promising field with enormous potential. However, the market has struggled to find a firm footing. Mixed public perception towards genetically modified consumer products and unclear regulations poses a significant barrier. Additionally, the field is largely dominated by startups that do not have sufficient capital to scale their production. In healthcare and technology, however, there is increased mobilization in this market by the likes of Janssen, Novartis, and Microsoft.”

Photo by Warren Umoh on Unsplash

Carbon emissions reduction ‘requires rigorous compliance’ to net zero strategies

 960 640 Stuart O'Brien
By:

The carbon-intensive oil and gas industry is undergoing massive disruption with more countries and companies trying to implement net zero emissions by 2050 – but tackling emissions and supporting low-carbon industries will require a combination of well-designed regulation and increased investment in decarbonisation.

That’s according to GlobalData, which cites that greenhouse gas (GHG) emissions generated by oil and gas operations—also known as Scope 1 & 2 emissions—were reportedly accounted for 15% of the total energy-related emissions worldwide in 2022.

A further 40% of the energy-related emissions came from the use of oil and gas for power generation, heating, vehicle fuel, and industrial processes, also known as Scope 3 emissions. Against this backdrop, developed countries are aiming for net zero by 2050 while developing countries like China and India are aiming for 2060 and 2070, respectively.

GlobalData’s thematic report, “Net Zero Strategies in Oil & Gas,” provides an overview of the efforts to mitigate emissions from the oil and gas industry. It benchmarks leading companies, such as  BP, Equinor, ExxonMobil, TotalEnergies, and Shell, based on their emissions and net zero commitments.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, comments: “Oil and gas companies are currently working to reduce scope 1 and 2 emissions, generated by their operations. Several leading companies have set themselves the target to reach operational net zero emissions by 2050. To achieve this, companies are focusing on adopting new technologies, such as low-carbon hydrogen, carbon capture and storage; and making other operational changes like building renewable energy and biofuels capacities.”

PR18347.png

The 2021 United Nations Climate Change Conference (COP26) conference had called upon the participating countries to develop long-term net zero strategies. The COP27 summit of 2022 encouraged countries to consider nature-based solutions. The upcoming COP28 summits hopes to make grounds to fast-track energy transition and significantly reduce emissions before 2030.

Barbara Monterrubio, Energy Transition Managing Analyst at GlobalData, said: “To support global commitments towards climate change, countries and regulatory bodies have started introducing emissions trading systems or enhancing existing ones. This is pushing companies to strengthen internal targets and diversify their portfolios into clean and sustainable products and technologies. Even when the mitigation strategies approached by each company are different, they all converge on reducing emissions intensity and cutting operational emissions, reduce and stop flaring and include renewable technologies.”

Most net zero targets set by oil and gas companies cover Scope 1 and 2 emissions. To reduce Scope 3 emissions, oil and gas companies are switching their products to lower-carbon sources of energy including hydrogen, LNG, biofuels, and renewables.

Monterrubio concluded: “Even when a fast progress is being made in tackling upstream and downstream emissions, switching to low carbon products is a long-term process, with many oil and gas majors in the early stages of their energy transition strategy. A combination of well-designed regulations as well as huge investments are needed to tackle emissions and support low-carbon industry.”

Photo by Sugarman Joe on Unsplash

Energy crisis putting business Net Zero goals at risk

 960 640 Stuart O'Brien
By:

82% of UK business leaders say the energy crisis will impact their organisation’s ability to meet emissions reduction plans – Of that figure, around half of organisations say they are delaying planned investment in sustainability and net zero plans (49%). Just over one third of the same organisations (34%) say they now have more immediate business challenges to meet. More than a quarter of these organisations claim that taking practical action to meet targets is difficult (27%).

That’s according to research published by Schneider Electric, which says that given the direct link between lower energy use and decreased emissions, organisations that maintain efforts to meet their emissions targets will also reduce energy use as a result. This in turn will lower their overall energy costs, and provide a useful boost to the bottom line in a challenging economic climate.

Crucially, the survey of more than 1,200 large organisations reveals that business leaders still recognise the importance of working to emissions reduction targets, as 39% believe that climate change and net zero ambitions will become more of a priority over the next three years. Only a small minority (12%) believe that national net zero commitments will be diluted in that time.

“Business leaders tell us that the energy crisis should be seen alongside the many other challenges they have faced over the last twelve months, including economic pressures, cyber security and skills shortages. Yet our research suggests that some of the UK and Ireland’s largest organisations are ‘kicking the carbon emissions can down the road’, as a result of the energy crisis”, said Kelly Becker, Zone President, Schneider Electric UK and Ireland.

“As fears grow about progress against global commitments made under the Paris Agreement, and the UK’s Climate Change Committee warns of a lack of progress on emissions cuts, the UK and Ireland need businesses and organisations in the public sector to play their part and stick to their net zero and emissions reduction targets”, said Kelly Becker.

The survey also reveals that only around one in five (21%) of those surveyed believe that energy prices will fall over the next three years, while over two thirds (69%) think their organisation will still be addressing the energy crisis in 12 months’ time.

Becker also urged business leaders to re-engage with their emissions reduction ambitions: “It’s not all doom and gloom: as our research shows, business leaders still believe in their climate change ambitions – they simply need to push the subject back up the corporate agenda.

“The technology required to help businesses decarbonise is already available – and the return on investment for these solutions has never been more attractive, with payback periods measured in months rather than years. Organisations still have time to meet their net zero commitments by understanding and addressing energy use, investing in renewable energy and energy saving technology, and embedding sustainability and carbon reduction targets in their business plans,” she added.

“What’s more, those that invest in green skills and green jobs will reap the rewards of a diverse workforce for decades to come. At Schneider, we’ve seen this for ourselves through our apprenticeship and graduate programmes.”

High-voltage switchgear demand to reach $30.3 billion

 960 640 Stuart O'Brien
By:

The global high-voltage (HV) switchgear market is forecast to reach $30.34 billion in 2027 from $25.02 billion in 2022, growing at a compound annual growth rate (CAGR) of 3.54% between 2023 and 2027.

GlobalData’s latest report, “Switchgears for Power Transmission, Market Size, Share and Trends Analysis by Technology, Installed Capacity, Generation, Key Players and Forecast, 2022–2027,” reveals that in 2022, the Europe, Middle East, and Africa (EMEA) region held the largest share of the market for HV switchgears globally, with a share of 44.60%. The region’s market share is expected to increase to 48.24%, in 2027, higher than the growth expected in all other regions.

Bhavana Sri Pullagura, Senior Power Analyst at GlobalData, said: “The growing demand for electricity is giving rise to the need for new power plants, particularly those modes of generation that have minimal impact on the environment. Several countries have begun to address deployment barriers to create a conducive market for increasing the use of renewable energy technologies and gas-based generation. The falling capital cost and low gas prices also resulted in increased development of renewables and gas power plants. This contributed to the growth of the switchgear market, which is expected to continue as countries seek to increase the share of renewables and gas in their generation mix.”

According to GlobalData’s 2023 Switchgears Market Report, the HV switchgear market in the EMEA region was estimated to be $11.16 billion in 2022 and is projected to reach $14.63 billion, registering a CAGR of 5.03% over 2023-27. The economic boom in countries in the Middle East led to an increase in demand for power, contributing to the growth of the market.

In 2022, Asia-Pacific’s market value stood at $10.77 billion, accounting for a share of 43.05% in the global HV switchgear market. The HV switchgear market in the Americas is expected to reach $3.11 billion by 2027, as the grid requires upgrades to replace aging assets and to accommodate the increasing sources of renewable energy.

China, one of the fastest-growing economies with the largest fleet of transmission substations, topped the global HV switchgear market in 2022 with a value of $7.73 billion, accounting for a 30.90% share. The country is expected to continue its leadership during the forecast period, reaching $9.19 billion in 2027.

Bhavana Sri added: “The need to build transmission infrastructure to deliver power from renewable sources in remote regions, the increasing domestic demand for electricity, large-scale renewable energy deployment, the projected growth in the gross domestic product, and rural electrification initiatives are some of the major factors aiding the growth of its HV switchgear market in China. The country is the world leader in ultra-high-voltage transmission, having made considerable investments in the development of transmission systems of voltage level of 765 kilovolts (kV) and above.”

The other major countries in the Asia-Pacific gas-insulated switchgear market include India and Japan. India ranks third after China and the US in the global HV switchgear market, with a value of $1.15 billion in 2022 and a share of 4.60%.

Bhavana Sri concluded: “GlobalData believes that policies established to address environmental challenges and capitalize on market opportunities offered by technologies would notably impact the switchgear market by the end of the forecast period.”

Corporate sustainability generating new business, not just carbon savings

 960 640 Stuart O'Brien
By:

Sustainability is not just about compliance and added costs – it can enable long-term value creation for companies, and in many cases, sustainability efforts can help save costs on materials, electricity, and water consumption.

That’s according to the latest Sustainability Assessment: Large Industrial Solution Providers report from ABI Research, which asserts that companies that are solving climate challenges for customers are enhancing and marketing current sustainability-focused solutions, while also generating new business units and revenue opportunities from decarbonisation activities.

The research provides an ‘in-depth and unbiased’ examination of 10 of the world’s largest industrial manufacturing conglomerates leading the way toward sustainable manufacturing operations while reducing carbon emissions for their customers.

In the assessment, ABI Research establishes the sustainability positioning of each profiled company—leaders, mainstream, and followers— and provides company-wide best practices and external customer use cases for reducing carbon emissions, water use, and waste across multiple industries.

Kim Johnson, Sustainable Technologies Principal Analyst, said: “Our assessment highlights that all the conglomerates in the index are building businesses to decarbonise society. However, several have communicated ambitions to be global climate change leaders. They also do very well financially, even in a tumultuous market environment.”

Schneider Electric is a sustainability and energy management-focused company, targeting carbon neutrality within its own operations by 2025. In 2022, with sustainability at the core of its business, Schneider Electric had all-time high revenues and net income, despite global inflationary pressures; their energy management unit is up 13%, and industrial automation is up 10%. Siemens ranked second in the index in industrial digital automation and green buildings and vehicles while receiving solid scores for renewable energy use. In 2022, Siemens had record profits, with their digital business up roughly 15% and the industrial business up 17%.

ABB was also a leading technology implementer for industrial automation and robotics with year-over-year revenue increases in 2022, while Bosch, which has already achieved carbon neutrality for Scope 1 and Scope 2 emissions (in 2020), had strong sales in 2021 and 2022 with climate response driving sustainable product development.

In 2022, Bosch’s corporate leadership stated that “climate action is driving the business forward” in mobility solutions, industrial automation, and building technology and appliances. Hitachi has also made significant investments in recent years for decarbonization, purchasing ABB’s energy and power grids business for expanding renewable energy, producing electric vehicle (EV) systems and infrastructure, and improving its Lumada solutions for industrial digitalisation.

For sustainability-focused efforts and revenue opportunities in the near term, ABI Research highlights increases in both industrial Information Technology (IT) investments, such as 5G connectivity, Industrial Internet of Things (IIoT) and edge compute, cloud infrastructure and mobile applications, and Operational Technology (OT) investments, including digital platforms to conserve energy, promote greener buildings, enhance automation, and improve factory efficiencies.

For manufacturers, many of these IT and OT investments can help address the effects of inflation, skilled labor shortages, and supply chain constraints while also addressing climate change by enabling the reduction of energy consumption, water use, and waste.

In the future, ABI Research expects these industrial conglomerates to invest even further in a multitude of newer, wider-ranging sustainable technologies, such as bio-based fuels, lower-carbon materials, lower Global Warming Potential (GWP) materials, power grid innovation, energy storage, and hydrogen power.

For example, Honeywell already has more than 60% of product sales comprised of solutions that contribute to ESG-related outcomes, including bio-sourced materials, bio-derived plastics, hydrogen power, renewable power, energy storage, fleet electrification, sustainable aviation fuel, methane emissions monitoring and remediation, healthy buildings solutions, and more.

Moreover, the assessment found that large renewable energy units from Siemens, Hitachi, and General Electric are all working toward thoughtful, globally coordinated mineral sourcing and production schedules to meet future demand for renewable technologies and the increased transmission lines required for distributed energy networks.

“In learning more about these conglomerates and conducting the analysis for the assessment, we expected to find typical carbon reduction activities occurring within the companies, such as sourcing renewable electricity, improving the energy efficiency of operations, and addressing unabated emissions with carbon offsets. What surprised us was the depth and breadth of new decarbonization business units, products, software solutions, and consulting services, each directed at solving climate-related issues for customers. These solutions ranged from national-level mobility and infrastructure projects to greener chemicals used in consumer goods. These companies are all investing in a lower carbon future,” Johnson concludes.

Importance of data collection and reporting highlighted in sustainability research

 960 640 Stuart O'Brien
By:

ABI Research’s latest Sustainability Assessment has analysed the sustainability activities of 10 of the world’s largest industrial manufacturing conglomerates, highlighting the importance of Scope 3 activities – particularly the robustness of data collection and reporting tools – for achieving industrial firm sustainability objectives.

The Greenhouse Gas Protocol defines Scope 3 emissions as all value chain emissions resulting from activities and assets not owned or controlled by the reporting organization. There are 15 Scope 3 categories, although some may not apply to all companies.

According to the Carbon Disclosure Project (CDP), Scope 3 emissions typically account for over 75% of total emissions, with the share often being over 90% for companies in the industrial sector. For Schneider Electric, Siemens, ABB, and Bosch, who were classified as “sustainability leaders”, Scope 3 emissions are over 99% of total emissions.

Alex McQueen, Sustainable Technologies Research Analyst, explained: “Large industrials face many challenges in measuring and reducing Scope 3 emissions, as the process encompasses a wide range of activities from suppliers, consumers, and distributors. Measuring Scope 3 emissions requires dedicated resources, expertise, and specific data collection and management processes.” Large industrial companies may also find it challenging to obtain data from lower-tier suppliers that may not track their CO2 emissions. Additionally, there is no standardized methodology for Scope 3 emissions calculations and disclosures, creating difficulty in assessing the activities of a broad set of suppliers, each using different data collection and reporting methods.

As regulation regarding the disclosure of environmental data becomes more prevalent, companies should prepare by establishing a robust framework for measuring and managing emissions data. As a starting point, industrials with a high proportion of Scope 3 emissions should look to identify all relevant Scope 3 emission categories. After that, supplier engagement is vital, and industrial firms should seek support from third-party organizations, such as CDP Supply Chain and EcoVadis, in requesting and managing supplier emissions data. Companies may also tie requirements to provide environmental data into supplier contracts and set targets for reducing supply chain emissions.

“Investing in digital tools helps automate the collection, monitoring, and reporting of Environmental, Social, and Governance (ESG) data, and they can also improve value chain collaboration. Since Scope 3 emissions calculations require the tracking of vast amounts of data, leveraging digital solutions is crucial for effective emissions management and reporting,” concluded McQueen.