By Faith Waithaka, Cloud and Service Provider Segment Sales Lead: Anglophone Africa at Schneider Electric
In today's business landscape, organisations often face challenges in transitioning to greener and cleaner practices due to concerns about the associated costs of materials, resources, and technology.
However, the cost of not prioritising sustainability far outweighs the initial investment required to adopt environmentally conscious business practices. It is crucial to consider that global warming could exceed 1.5°C above pre-industrial levels by the early 2030s.
While enterprises today grapple with the complexities of sustainability, it is important to recognise that sustainability is an essential driver of growth. Sustainability plans are often criticised for being perceived as "too expensive," when in reality, financial performance and sustainability are intertwined and mutually beneficial. According to a 2022 Sustainable Value study conducted by EY, about 69 percent of respondents reported that their climate initiatives exceed their initial financial expectations, generating greater value than anticipated.
The challenge arises when organisations seek to align their mission critical initiatives with sustainability goals. It can be complex to find the right balance between operational efficiency, cost-effectiveness, and environmental stewardship.
However, organisations must recognise that sustainability is not just a moral imperative, but also a strategic business imperative. Failing to address sustainability issues can lead to reputational damage, regulatory non-compliance, operational inefficiencies, and missed opportunities for innovation and cost savings.
How business leaders can shape company’s sustainability DNA
The cornerstone of a sustainable transformation lies in examining the core values that underpin an organisation's operations. It is the duty of business leaders to take charge and implement the appropriate solutions that can reinforce the company's sustainability DNA.
Leaders have the power to shape the culture, policies, and practices that define how the company operates. By embracing sustainability as a guiding principle, leaders can pave the way for a transformation that aligns business objectives with environmental and social responsibility.
Here’s how leaders can strengthen sustainability when the stakes are high:
Enhancing resource management centred on circularity
Businesses have a tremendous opportunity to enhance their long-term value by embracing sustainability at both the strategic and operational levels. Taking proactive measures to minimise environmental harm and ensure long-term resilience is crucial, and one way to achieve this is through the adoption of circular economy practices.
Ambitious scenarios indicate that a system-level shift to a circular economy could potentially reduce approximately 80% of plastic pollution in both aquatic and terrestrial systems. Estimates from McKinsey suggest that building out an efficient waste management infrastructure could cost between $560 billion to $680 billion over a ten-year period. We can realise tremendous value through the circular economy model.
The circular economy approach aims to maximise the usability and value of products, components, and materials while minimising waste generation. It involves designing products with durability and recyclability in mind, optimising resource use throughout the entire lifecycle, and actively seeking opportunities for reusing materials and extending product lifetimes.
As part of our sustainability commitment, Schneider Electric continues developing innovative approaches that reimagine product design, business models, and services with circularity in mind. For example, EcoFit™, an approach used by Schneider Electric to modernise the electrical, critical power, cooling, and automation systems that sustains customer’s business operations, all while enhancing their environmental credentials. This involves outfitting businesses with advanced, digitally driven electrical solutions and active engagement in sustainable, circular practices.
Customers are increasingly seeking sustainable solutions and are more likely to choose businesses that align with their values. By offering products and services with a clear commitment to circularity, we can build trust and strengthen relationships with our customers, fostering long-term loyalty and competitive advantage.
Increasing efficiencies through digitisation
Embracing digital technologies with the potential to decarbonise industries is a key driver for businesses to achieve their Net Zero goals more expeditiously. Recent analysis indicates that if these digital use cases are scaled up, they could potentially reduce emissions by 20% by 2050.
Technology has evolved to enable Electricity 4.0, facilitating the decarbonisation and decentralisation of industries, while creating a more electric, digital, and sustainable world. It offers enhanced control, optimisation, and analytics, revolutionising our approach to energy efficiency.
In the Oil and Gas industry, for instance, Edge computing plays a significant role in improving sustainability, resilience, and cost savings. Edge bolsters the reliability of smart grids by swiftly identifying alternative power sources in the network during outages, ensuring uninterrupted power supply to customers until the main delivery system is repaired and operational.
Addressing climate change requires more than a quick fix. Leaders play a big role in ethically fusing sustainability and technology. They can spearhead initiatives to evaluate and monitor the environmental impact of their operations, promoting sustainability throughout the organisation. In doing so, they also enhance their ESG performance and effectively deliver on sustainability goals that is demanded by customers.
