The first half of September alone saw eight devastating floods across four continents, as per media reports. This marks the latest in a series of extreme weather-related events that are gradually becoming the norm. Climate change is upon us and there are no two ways about it. Tackling climate change requires decarbonisation of electrification, industry and transportation sectors which contribute around 90% of CO2 emissions. This article is focused on sustainability in commercial and industrial(C&I) sector which is responsible for over 30% of annual global CO2 emissions.
Leading companies around the world are shifting their goals from only profit maximisation to profitability along with due consideration for the health of the planet. Companies are signing up for initiatives like RE 100 and committing to procuring renewable energy for their business operations.
Let us take the example of Google. The company has been using renewable energy since 2010 and has cumulatively signed corporate power purchase agreements (PPAs) totalling over 7 GW already. It is now working on achieving its goal of operating on 24/7 renewable energy by 2030 which means procuring 100% energy from renewable sources on hourly basis. Just imagine (or google!) the quantity of energy Google needs to run its data centres etc. Moving to the other tech giant Apple. As part of its pledge “to be carbon neutral on every product by 2030″, Apple has received commitments from over 250 manufacturing partners to use renewable energy for all Apple production by 2030.
It is not just the tech majors, but a lot of other companies in varied sectors from construction, industrial goods, consumer goods to healthcare etc. are committing to carbon neutrality by 2030. Soon business without clean energy will not be possible. All businesses must follow the lead of the above majors and develop a plan to secure their long-term clean energy supplies. One way will be to enter into long-term PPAs with providers or the other way will be investing directly in renewable energy projects whether onsite or away.
Renewable energy for reducing emissions is critical but is not enough, as 30% of CO2 emission is through industrial processes requiring high-temperature heat. We need to decarbonise such hard-to-abate processes. To reduce its scope 1, scope 2 and scope 3 emissions, industries must undergo a net-zero revolution. We can draw parallel to this revolution with the IT revolution, also called third industrial revolution(3IR), based on the sheer magnitude of the transformation. Usage of IT in organisations in the 1990s was limited to basic purposes such as creating documents through spreadsheets or word processing software. The invention of emails and worldwide web led to exponential increase in usage of IT across organisations. Computer hardware/devices, processors too began to evolve, and all kinds of programs and software were created covering each business process, function, or application and soon IT was ubiquitous. Further technological advancements in the field of IT have now brought us to fourth industrial revolution (4IR) comprising of disruptive technologies such as IOT, robotics, VR, AI etc.
The net-zero revolution is all set to follow the trajectory of 3IR. Companies are looking beyond rooftop solar and are implementing a range of climate technologies and practices such as EVs for business-related transportation, green building technologies for increased heating or cooling efficiency, electrification of heat sources, green hydrogen for hard-to-abate industrial heating applications for green steel and cement and like, sustainable fuels, carbon removal, carbon capture, and storage and so on and so forth. Sustainability is becoming all pervasive in all business operations. 4IR technologies catalyse faster adoption and integration of environmentally sustainable practices across the supply chain. For e.g., companies are deploying IOT sensors, digitizing supply chains, practicing AI led predictive maintenance, undertaking smart manufacturing etc to minimise their carbon footprint. They are collecting data to generate insights to optimise energy consumption across factories and offices, maximise renewable energy consumption, assess ESG compliance across the value chain and minimise waste generation. Achieving sustainability in operations reduces operating cost, increases access to financing, creates new revenue streams, permits premium pricing, enables market expansion not to mention the positive impact it has on employee morale and productivity.
For sustainability to be deeply embedded in the organisation we need a sustainability-oriented culture that promotes environmentally conscious decision-making and recognises it as a competitive advantage. Only then will companies be able to make decisive moves to green their operations, secure low-carbon materials and position themselves as eco-friendly and steal a march over their peers.
Rather than waiting for government diktat, C&I sector must proactively implement sustainability practices and capture the advantages. They must set bold targets and choose opportunities which will drive profitable growth. And they must act fast. The pace of change is accelerating, and ambitions must be set to stay abreast of the change if not ahead. Governments are also backing this revolution by setting ambitious targets for carbon mitigation. Investors are looking to reward companies rooted in sustainability. Companies that can demonstrate speed, foresight, and ambition for mitigating emissions stand to reap huge benefits.
Rahul Munjal is CMD of Hero Future Energies
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Updated: 21 Sep 2023, 11:58 AM IST
