Sustainability is a Business Opportunity

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Past manufacturing practices prioritized creating and moving products with little regard for the environment. Consequently, the world will produce 27 billion tons of solid waste by 2050. Today in the EU, new ‘circular economy’ directives establish hierarchies for recycling to encourage businesses to adopt sustainable practices and implement waste reduction and recycling initiatives.

The number of Fortune 500 companies aligning with climate science has also increased. Sixty-three companies (13%) now have their target approved by the Science Based Targets initiative (SBTi), much higher than in 2017. Companies worldwide have recognized they must assume responsibility for the environment and embed sustainability into their strategic business decisions and operations.

Prioritizing sustainability is no longer a choice; it’s a necessity. And while sustainability strategies are often cited as “too expensive,” the truth is financial performance and sustainability do not work against each other – in fact, it’s the opposite.

Today, customers, investors, and business partners look for companies with a comprehensive sustainability approach. In addition, interrelated megatrends – like Europe’s energy crisis, price increases, climate change, and shifting demographics – are increasing demand for companies to create action-oriented environmental, social, and governance (ESG) strategies. Access to financing is another incentive, as investors and lenders increasingly require proof of sustainable policies.

The full potential of sustainability

Sustainability is more than just a response to societal and environmental challenges. Sustainability is a significant business opportunity and can significantly contribute to thwarting climate change.

There are several ways sustainability practices can positively impact business:

  1. Consider the many savings potentials:
    • Energy efficiency through better energy management and the use of renewables:
    • Product environmental profiles (PEPs) disclosures identify opportunities to reduce environmental impact, make more sustainable choices during production, and help consumers make more sustainable choices.
      • Schneider Electric can help with the data and disclosures needed to comply with PEPs.
    • Resource savings by reducing waste, recycling, and adopting circular economy strategies. For example:
      • Schneider Electric™ has signed the European Plastics Pact and has taken concrete action by, among others, recycling 96% of cardboard and pallets.
      • Our smart factory in India focuses on sustainable practices in its manufacturing, using a “repair, reuse, remanufacture and recycle” strategy to ensure long asset lifecycles.
    • Minimizing energy bills with modern and power-efficient infrastructure:
    • Many corporations are investing aggressively in sustainability. Corporate Knights note that their Global 100 Index (an annual ranking of the world’s most sustainable corporations) significantly outperforms corporations without firm sustainability commitments
  2. There are also employer benefits:
    • Greater productivity through employee motivation, inclusion, and diversity helps create access to a larger talent pool and attract high-skill employees.
    • Companies that care about sustainability attract employees that care about it too. Transparent communication motivates employees, ultimately improving organizational performance.
    • Attracting top talent leads to innovation and creativity and new products and services that are more sustainable, differentiating a business from competitors.
  3. Because sustainability initiatives are a great source of innovation and collaboration for operational improvements and entirely new business models, sustainability goes beyond customer reach and has more than reduced CO2 footprints. Our technologies serve as agents for global transformation, collaborating with stakeholders, partners, channel customers, and suppliers to help decarbonize their operations and those of their customers.
    • Masterpact MTZ provides an example of a circular economy, demonstrating a sustainable way people can engage with sustainability without compromising. Innovative production processes have reduced carbon emissions by 45%, saving about 250 kg of emitted CO2.
  4. Sustainability helps manage disruption in the marketplace. It helps invent or reinvent supply chains and reveals interdependencies to improve in response to structural shifts or disruptions. Look for more information on this topic in other blogs in this series.

Strategic, pragmatic roadmaps are needed

Sustainability is now more than mainstream- our IDC Impact Survey showed that 65% of IT executives across European organizations plan to dedicate 10%–50% of their strategic budget to sustainable products and services.

Montgomery County recently improved vital infrastructure elements and advanced bold climate and resilience goals, using a 6.5 MW microgrid for its 70 EV buses. By doing so, it has avoided 160 kilotons of CO2 over a 25-year project. The results serve as an ideal sustainability archetype for local governments nationwide — all with zero capital outlay.

It’s a journey, not a sprint

The goal is net zero! Schneider Electric has the technology and the ecosystem to help in an affordable, economical way. Our research indicates that partnerships and effective collaboration go a long way toward achieving sustainability ambitions.

To that end, Schneider Electric recently launched its Sustainability Impact Awards to recognize the positive impacts achieved by partners, end users, and suppliers who embrace our sustainability-focused technologies, philosophies, and ambitions. This year’s Global Impact Award winners are partners that we acknowledged for their outstanding successes and innovations in one of two categories:

  1. Partners who lead the charge themselves and decarbonize their operations.
  2. Partners who advocate sustainable solutions that support net-zero goals for their customers.

Schneider Electric is also working with its suppliers to decarbonize its supply chain, collaborating with companies like Microplásticos, who have committed to reducing their absolute Scope 1 and 2 GHG emissions by 88% by 2023.

Visit our Sustainability Impact Award portal to learn more about this effort and how to earn recognition for your decarbonization practices. 

Listen to the recently recorded podcast featuring guest host Dr. Katharina Grimme from IDC to learn more about this topic. Our podcast “Sustainability as a business opportunity” can be found on iTunes or Spotify.

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