ESG in Practice: How Digital Tools Can Shape Sustainability

Introduction

ESG (Environmental, Social, and Governance) is no longer just a buzzword in the corporate world. It's a framework that sheds light on how companies manage risks and seize opportunities related to environmental, social, and governance criteria. From a plant management perspective, ESG encompasses environmental considerations like energy, water, and waste management, social aspects including safety, and governance, which involves regulatory compliance and stakeholder communication.

Digital technology suppliers have eagerly jumped on the ESG bandwagon, offering solutions to address these crucial factors. However, as the dust settles, challenges, limitations, and disillusionment have started to surface.

Beyond the Hype: ESG as a Business Imperative

ESG isn't merely a passing trend or a feel-good exercise; it has the potential to create a lasting positive impact on businesses and their stakeholders. Similarly, digital technologies are more than just a business opportunity or a gimmick—they play a pivotal role in implementing ESG principles.

From Monitoring to Improvement: Real-Life Scenarios

Let's delve into some real-world scenarios:

1. Energy Consumption Tracking: A leading automotive OEM in East China realized their ESG platform could only capture energy consumption data but not track improvement actions and enforce operation and maintenance best practices.

2. Incomplete Compliance Actions: An Italian manufacturer faced compliance issues due to incomplete corrective actions in the plant, not consistent with their paper records. Their corporate IT system did not provide any support to manage critical activities effectively.

3. Building In-House Solutions: An European construction material producer in Asia opted to build their energy management system instead of adopting a Digital Twin solution. They achieved the same results, for a much lower price, but missed out on the associated ESG-related media coverage proposed by the vendor!

In these examples, digital solutions fell short of providing valuable risk management support. In some cases, companies even chose to develop more practical systems in-house.

Connecting ESG to Carbon Footprint and Energy Optimization

ESG often centers around greenhouse gas emissions, a key aspect of environmental compliance. Calculating the carbon footprint involves estimating greenhouse gas emissions and proposing actions to reduce them. Scope 1 and 2 emissions pertain to plant facilities and energy consumption, making energy optimization a vital focus.

Energy optimization entails a technical action plan encompassing facility modifications, operation and maintenance routines, and more. Maintenance, in particular, significantly influences carbon emissions by impacting energy consumption and embodied carbon in components and consumables.

HVAC and Beyond: The Role of Maintenance

HVAC systems often account for over 50% of emissions, making energy efficiency improvements crucial. This includes building modifications, sensor deployment for continuous monitoring, and O&M activities like temperature setpoint adjustments, equipment repairs, and leak identification and repair. Simple yet effective routines like lubrication and filter cleaning can yield double-digit energy savings.

In conclusion, the journey from ESG to carbon footprint to energy optimization and maintenance is a crucial step in aligning business operations with sustainable practices. Digital technology serves as the bridge that connects these elements, unlocking the potential for lasting environmental and operational improvements. Stay tuned for more insights on ESG in our upcoming articles.