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Digital technology shows how to realise ESG goals in 2022 and beyond


As momentum builds around embarking on a net-zero pathway, advanced technologies can serve to leverage operational benefits across every aspect of the energy value chain, explains Damien McDade, Vice President Pacific at AVEVA.

As global resolve begins to coalesce around the energy transition, 2022 will mark a turning point for industrial enterprises. At the recent COP26 summit, governments and private-sector companies around the world pledged to work towards keeping planetary warming to 1.5°C, and to support net-zero carbon emissions by 2050.

Now comes the difficult challenge of taking action to make good on those promises, while complying with stricter Environmental, Social, and Governance (ESG) regulations.

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.

Constrained operating environment

The playing field has changed, and businesses must adapt to ensure they survive – and thrive.

Businesses must comply with increasing regulations from policymakers as net-zero becomes an unstoppable movement.

If they are to maintain their social license to operate, companies must also comply with ESG pressures from their communities and from consumers who 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 labour shortages and continued supply chain disruptions as the pandemic continues to rewrite the operational playing field.

Digital technologies support the transition to greener value chains

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 per cent of the technologies needed to reach net zero are already deployed, some 15 per cent are in prototype trial, and a further 5 per cent 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 minimise environmental impact and costs are already available today.

Let’s take a look at how technology can help achieve the business imperatives ahead of us:

  1. Speed up design and implementation of new sustainable plants and processes: Energy companies transitioning to cleaner businesses, such as the ones related to wind, solar and biofuel, require new greenfield assets or may need to modernise 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.
  2. Digitalise supply chain management to reduce waste and improve efficiency: As the pandemic has shown, market conditions can change overnight. Simplifying and standardising downstream supply chain management enables the business to quickly adapt to market changes and take advantage of 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.
  3. Realise remote-working solutions for hybrid operations: Digital transformation serves as a proven buffer against continuing uncertainty that impacts workforce productivity. By leveraging AI and the cloud for edge-to-enterprise visualisation and intelligent data management, staff have universal access to data and context in a clear and simple way – 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.

Leverage technology to prioritise sustainability

Technological innovation can serve as one of the primary building blocks to realising a net-zero pathway when deployed alongside other solutions as part of a multi-layered approach, including substituting fossil fuels with low-carbon energy sources and ramping up efforts to improve carbon capture, utilisation 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 ten businesses recognise sustainability as a key area of focus for their companies over the next three years. In fact, 89 per cent of C-suite leaders are committed to helping tackle climate change.

As momentum builds around the energy transition, 2022 will be a landmark year for environmental action. 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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