Businesses across Asia face increasing pressures from governments and consumers to reduce greenhouse gas emissions and take action to help meet global climate targets. We have seen that those that disregard their carbon footprint for new business opportunities face intense scrutiny from increasingly informed consumers. And while there is an amplified pressure by the need to ensure business resiliency and growth in the face of an uncertain economy, caused by the COVID-19 pandemic, there is good business sense in smart energy choices.
Many companies are turning to carbon offset programs as a way to meet rising expectations, while also looking to address organisation-wide energy consumption. The need to maintain, and in some cases, regain market share as markets across Asia rebound, is bringing energy choices to the foreground.
While carbon offsets are a good option for mitigating emissions in the short term, they can be just that - a short-term solution and part of a wider portfolio of solutions that include energy use. According to the International Renewable Energy Agency (IRENA), an energy transition investment can boost GDP and could add 5.5 million more jobs by 2023 and help jumpstart the economy – while helping to meet energy goals. This boost is needed now more than ever.
Asia-based companies are generally moving in the right direction and addressing their energy consumption, thought there is still some way to go. A survey of large companies with at least $250m in annual revenue by Schneider Electric found that 34 percent of energy professionals were less than confident that their current corporate sustainability goals would be effective in helping their organisation while and 14 per cent were not at all confident.
While we applaud those companies taking action, that half of businesses surveyed lack confidence spells trouble for the wider sustainability agenda and our future environmental prospects. Action on energy usage by all companies is critical if we are to contribute to the achievement of global climate goals by 2030, and cannot be forgotten as businesses focus on regaining strength post COVID.
Making Good Business Sense
While carbon off-sets will still play a role for companies looking to achieve net zero emissions or carbon neutrality, stronger, long-term commitments to reduce greenhouse gas emissions through data-driven energy management is a more effective solution to addressing climate change, while also impacting business performance overall.
In our experience, cutting energy consumption to reduce greenhouse gas emissions generates financial benefits and stronger business performance by encouraging operational efficiencies, reducing material usage and lowering energy consumption levels. These business benefits might spell the difference for companies’ survival in major business interruptions, as we have seen in the past few months. Companies with a strong energy plan and staunch commitments to reducing energy usage can generate a commercial advantage too, as consumers, partners and financial institutions demand further visibility of a company’s emissions exposure.
These same stakeholders are calling on companies to be more aggressive, innovative and transparent in addressing their energy usage to reduce their emissions footprint in line with global climate targets. With climate stakes rising, the absence of a business energy management plan can impact corporate reputation as well as bottom lines as governments begin to introduce carbon taxes to pass on the costs of climate change.
Increasingly, the digital tools exist to help businesses quickly enact and make sense of a holistic energy management plan. Companies across Asia that recognise the value of these new digital technologies to reduce their energy consumption can mitigate future risk against carbon constraints and differentiate against competition.
A Digitally-Powered All-of-Business Approach
Digital technologies have tremendous potential to contribute to businesses’ energy management capabilities and deliver the environmental benefit that companies have promised.
Our analysis shows that businesses that make structured, proactive investment in digital energy management, achieve better results than those who rely on the traditional ad hoc approaches of the past. Take for example the application of data-based insights, 79 per cent of companies surveyed worldwide said they collected energy data, this information was usually siloed and did not contribute to operational decisions.
New software can help to bridge the data sharing gap, connecting devices in buildings to analyse data and find opportunities for greater efficiency. By gathering appropriate information and offering analysis tools to help determine where and how energy is being used, reveal opportunities, audit performance as actions are taken, energy management platforms can empower employees, changing the company culture towards energy usage. We have seen that even energy-demanding industries such as concrete production can push toward more efficient, climate-friendly practices. China National Building Materials Group is a model in this regard, cutting energy use by 10 per cent.
Digitisation not only allows businesses to monitor and limit their energy usage, it also offers businesses a new energy landscape. Digital technologies allow businesses to manage their energy storage intelligently and smart grid solutions offer businesses the opportunity to tap into renewable resources. Our experience shows that clients can see an average of 30 per cent reduction in energy usage. This spells real potential for the region’s industrial carbon footprint.
The world faces a tough challenge of combating climate change, and business has a vital role to play in achieving global targets by 2030. Impactful progress requires that commitments to sustainable energy usage need to be deeply ingrained across all aspects of a business, not just at a reporting level. We cannot stand idly by. We must use the tools at our disposal – and digital tools are capable of allowing us to monitor, measure, and manage energy usage, storage and alternatives.
In doing so, businesses will set themselves up for long term financial benefits, increase their resilience in the face of volatile energy markets, increasingly stringent regulations, and an uncertain future due to the pandemic, and promote a culture of awareness that will serve its future business goals. It’s not just Asia’s businesses that are at stake, it’s our environment.
The writer is Zone President, East Asia & Japan, Schneider Electric