Industry remains the top producer of pollution, with a mere 100 companies producing 71% of all greenhouse gas emissions, according to one 2017 study. In a time when governments and consumers are increasingly shifting towards sustainability, a business-as-usual path is hardly the most viable approach to take.
The fact remains that companies that implement sustainability plans into their strategies are more successful than those that don’t. Nielsen demonstrates that 66% of surveyed consumers would pay more to do business with a sustainable brand. Meanwhile, McKinsey showed that a sustainable strategy that reduces resource costs can improve profits by as much as 60%.
As the list goes on, the picture becomes even clearer: It’s impossible to ignore the clarion call of sustainability across industrial markets.
For businesses with large-scale heavy-asset holdings, however, making the switch isn’t as easy as, well, flipping a switch. The best approach would seek targeted opportunities for the transition, employing technology and innovative methods to create the greatest impact at the lowest cost.
Let’s dive into some of these opportunities.
Hybridisation is a key method in a sustainable transformation for every business. By employing hybrid machinery that can accommodate both fossil fuel and electrical energy sources, companies can switch partially first, instead of waiting years to create the ideal low-emission operation.
One example of a real-world use case is the use of “dual” boilers in chemical, food, and petrochemical industries. These allow part-time electrification of low- and medium-energy heating, with high-temperature requirements the purview of standard fuel-driven equipment.
However, it’s important to note that hybridisation is only a temporary solution in a transition to more sustainable, renewable energy sources. A company may be at risk of accusations of “greenwashing” if they see hybridisation as the end state, rather than a stepping stone.
You also have to be careful to avoid turning hybridisation into another means of brown-spinning, or spinning off the high-emissions assets of your company into another one in order to create the image of a more sustainable company. You can envision hybridising a large part of your company and then selling off the older, dirtier parts at a discount; this will serve no benefit in the long run, and can easily be identified by more industrious consumers and governments. Your brand could then suffer by association.
One of the great difficulties in managing a transition to low-carbon operations is the supply chain. How can you validate carbon emissions and environmentally-friendly practices at each stage, so that your entire supply chain is green?
The answer is found in digital technologies, such as AI and analytics. Such technologies can be used to capture efficiency and resource consumption at every link in the supply chain, and give decision-makers a bird’s-eye view of the entire chain. Business leadership can then employ these analytics and data to make policy changes or implement best practices to reduce emissions at each stage.
One example of this is German chemical company Henkel and its Environmental Management System. By analyzing more than 3,000 data points across its global manufacturing and logistics network, and sharing this data with supply chain managers across the world, Henkel’s Laundry & Home Care division was able to implement new practices and reduce energy consumption by 24%, with 9% coming from the new system alone.
Hydrogen is one of the fastest-growing areas of industry today, with the US market for merchant hydrogen growing steadily at 7% annually. As a versatile energy storage medium with a variety of applications across several industries, demand for the lightest gas will only continue to grow.
However, hydrogen production is currently highly carbon-intensive. Two methods of production, called “blue” and “green” hydrogen, are the frontrunners in environmentally friendly alternatives to current carbon-heavy processes. However, the method that “wins out,” so to speak, is still currently a topic of debate.
This is an important area to consider for low-carbon initiatives, because hydrogen may well be a powerful ally alongside renewables in the drive towards sustainable operations. If hydrogen produced through sustainable means becomes viable, then businesses would do well to adopt it as soon as possible.
Currently, 95% of hydrogen is produced with fossil fuel-derived methods, with the remaining 5% being produced with sustainable electrolysis techniques. But as renewable hydrogen grows, one may find an advantage in preparing to adopt it.
Innovative Recycling in the Chemical Production Industry
One substantial challenge involved in moving towards low-carbon methods are stranded assets. These are resources that previously generated value, but are now considered liabilities, due to outside changes.
A key example would be the vast oil and natural gas reserves that companies list down in their assets, but which might no longer be viable to extract. This may be due to pressure from environmental scientists, or because extracting them would cause the companies to lose money due to triggering environmental regulations and the loss of subsidies.
A big question arises here: Should companies extract these resources anyway? Or should they remain stranded to preserve the environment, while potentially rocking the economic boat with a drop in stock prices?
One opportunity here would be to respond to the demand for oil and gas products by investing in recycling practices. Plastics for instance rely heavily on these fossil fuels and are considered to be very difficult and energy-intensive to recycle. Indeed, only 9% of all plastic that is produced is recycled.
A recent study in Europe shows that as much as 60% of plastics currently produced could be replaced with improved recycling practices. By investing in recycling practices, industries may reduce their reliance on oil and gas, reducing the impact of these stranded assets.
It’s clear that businesses must shift towards low-carbon opportunities and sustainable initiatives if they want to succeed in the marketplace of the future. The opportunities we describe here sit on the bleeding edge of sustainability and can be powerful approaches for companies looking to start the transition as painlessly and efficiently as possible, or at least prepare for it.
However, one big concern is the actual measurement of the impact of these initiatives. How does one measure one’s carbon footprint accurately and accessible enough to make decisions about policy?
The answer lies in Carbon Analytics. Our company helps you automatically collect data on emissions at an asset level in real-time, and our proprietary analyses allow us to determine net emissions at each plant and site at a process level, allowing you to make granular decisions about how to reduce your carbon footprint.
We give you an areal view with a granular breakdown of your company’s sustainability and emissions efforts, and work with you to develop actionable insights from your data and identify areas of improvement. And we’re the only solution that brings down the whole process from years to weeks.
Book a demo with us now and let’s work together to make a better, more sustainable world!