ESG investments witnessed a record high last year, touching $649 billion in 2021, a grand upswing from $285 billion in 2019. They say numbers do not lie, and it looks like corporate sustainability has finally evolved—from an incremental investment to a strategic priority.

But what happened in the past few years which led to this sudden momentum? Simply put the rise of digital technologies and acceptance of digitalization, spurred by the pandemic, is spinning a brand-new story in corporate sustainability.

However, the emergence of technology that helps manage environmental impact is only one side of the story. Of late, organizations are also facing massive pressure from governments, consumers, and investors alike to straighten up their sustainable development goals or risk going out of business.

The Collective Push Toward Sustainability

For years now, environmental regulations have been driving investment in industrial plants. For instance, in the 90s, oil refineries majorly invested in hydro-processing to remove toxic impurities and developed unleaded alternatives. As the climate crisis becomes more severe, today environmental regulations are rapidly moving from soft policy initiatives to strict laws.

A big credit behind this legislative move also goes to the modern-day, empowered consumer who is more environmentally aware and demanding than ever before. Therefore, many companies are driving a step-change in their strategies. The idea is to become part of the solution for tackling climate change and not be the problem.

And why not? Especially when going sustainable these days can boost profitability in more ways than one—from significantly improving revenue and reputation to production efficiency. For instance, energy is the highest controllable operating cost on most sites. Even efficient companies can achieve 10-15% cost savings through no-cost improvements and attractive capital investment projects. Saving energy has always been and will be the most reliable way to reduce operating costs in a volatile market. Some of the biggest names in industry are saving billions of dollars of their massive utility bills through energy conservation.

Digital Transformation (DX): The Center of Sustainable Initiatives

The case for going green has never been stronger for companies with the convergence of digitalization and sustainability. New-age technology solutions driven by Artificial Intelligence (AI), machine learning (ML), IoT, and remote sensing vastly improve the ability to optimize and automate energy initiatives. Yokogawa and KBC believe that Digital Energy Management Systems will soon offer industrial autonomy, having transitioned from industrial automation (IA2IA). This means that plant assets and smart manufacturing solutions will have the ability to adapt human-like learning and govern themselves independently. In fact, a recent Yokogawa survey amongst 534 respondents from 390 companies in the chemical & petrochemical, oil & gas, renewable energy industry sectors reveals significant impact of industrial autonomy on environmental sustainability.

The impact of digital technologies on energy transition is a win-win situation from all ends. Cloud and open platforms not only eliminate the need for infrastructure and reduce the cost of ownership but result in faster delivery cycles. In addition, DX and virtualization technology make collaboration, knowledge sharing, and learning easy, which in turn improves decision-making.

It is easy to see why companies from across sectors are vigorously working on their energy programs while leveraging digital technologies. The outcomes are too favorable to miss and imply reduced reporting costs and improved shareholder confidence. Organizations that fail to employ sustainability initiatives, on the other hand, struggle with ad hoc and unpredictable reporting and shareholder pressure. Moreover, the chances are highly likely that companies that avoid ESG goals will not exist in 20 or 30 years as better, environmentally friendly alternatives will exist.

Simplifying Energy Management with DEMS

Digital tools are also the only way organizations can live up to the promises of COP26, which declared net-zero as a core principle for businesses. In fact, for many of our clients at Yokogawa and KBC that have publicly stated net-zero targets, the next stage is to define the roadmap and KPIs and use automation to improve productivity and safety with the goal of industrial autonomy.

The power of data insights will also play a critical role. For example, if an energy engineer has a detailed drill-down of emissions influencers or an operations manager has a focused view of production or energy trade-off, with clear emissions and energy cost impact, then it will enable informed, quicker, and better responses than ever before in achieving the net-zero journey.

To meet sustainable energy goals, Yokogawa and KBC clients have been opting for the Digital Energy Management System that provides clear energy and emissions visualization and tracking tools and minimizes emissions by reducing the gaps in the process. DEMS connects all the missing pieces in energy management and provides—real-time data from reliable data sources, proven analytics alongside first principles models and codified IP of the past 40 years, and intelligent visualization that matters to the user.

Sustainable soon to be Business as Usual

The 2020s have been declared as the “decade of action” in emission reduction by the UN. Today, the only way to live up to corporate sustainability goals is by adopting a brand-new way of thinking. The energy renaissance is here to stay, and companies that fail to jump on the ‘data-led innovation’ bandwagon are at serious risk of falling behind. If organizations remember that every small move toward sustainability today is an investment into the future and that profitability and sustainability can co-exist—the day is not far when net-zero will no longer be a distant goal but a modern-day reality.

To learn more about how digital technology is imperative for effective energy management, CHECK out our on-demand webinar Using Digital Technology for Effective Energy Management. Or reach out to me directly via LinkedIn!

The time to act is NOW.