Digitalization programs abound in most industrial companies today, which might lead some to believe that sustainability is taking a back seat to productivity gains, cost savings and all things automation. But whether part of the design or not, many of these digital expenditures are a two-for-one investment, supporting both the bottom line as well as your sustainability targets.
We took this very idea to American industrial players, through our recent State of the U.S. Energy Industry Report, conducted in partnership with Axios Studio and Harris poll. One of our goals was to better understand the impulses behind the rising prioritization of technology to optimize sustainable operations in industry. What we learned confirmed our assumptions: 84% of energy leaders stated that their sustainability goals would be impossible to achieve without technology.
Big carbon- and climate-related promises are being made across most companies today. The deadline set by the Paris Agreement looms some 10,000 days away, and sustainable transformation now tops industrial agendas.
At the same time, progress must be made in terms of streamlining operations, advancing workflows, integrating computer vision and other forms of AI, in an effort to stay competitive, profitable and, most importantly, in business.
The sustainability side-effect of digitalization
What the State of the U.S. Energy Industry Report tells us is that the initiatives that may have started as a drive for greater productivity or efficiency, often with cost savings in sight, have proven to manifest into sustainability gains.
It’s become the ultimate win-win for an industry under intense pressure to change, as Aker BP can attest to in their attempts to find a faster way to identify oil-in-water contamination. There are significant production losses associated with high water-cut wells, as safely cleaning and discarding produced water incurs a significant cost and slows down production. That’s why they turned to technology, implementing a smart monitoring system using real-time data. This allows engineers to troubleshoot water contamination issues from a single dashboard, leading to much quicker identification of the problem, and reducing downtime.
For Aker BP, these actions could potentially save the company $6 million annually. But that’s only one side of the coin. The other side is the positive environmental impact associated with immediate prevention of inadvertent disposal of contaminated water. A win-win.
The sustainability proof of your digitalization efforts
Examples are emerging from across the industry, use cases in which sustainability gains are being made as a result of industrial digitalization programs. In Aramco, they have reduced flaring and chemical usage through smart tracking and dashboarding. Framo and Aker BP have worked together to reduce emissions associated with travel and lodging when switching from scheduled maintenance to predictive maintenance. Statnett (Norway) is using remote and AI-augmented leak detection allowing workers to respond more quickly and mitigate risk, as well as reduce “truck time” emissions. And in an Aarbakke and Framo collaboration, the companies are reducing non-renewable materials usage and waste associated with intelligent management of tooling activities in manufacturing.
These sustainable byproducts of technology adoption are not uncommon. Digital systems can do so much more than simply streamline a process. The technology available today can help cut emissions, reduce waste, and limit environmental harm when data is extracted from silos and used broadly across an operation.
Three ways to find your digital + sustainable win-wins right now:
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Map and assess the existing digital solutions in your operation. Explore whether they can be scaled more broadly to tap into yet unknown sustainability gains. Develop dashboards to track sustainability data that you are already collecting for efficiency
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Make key stakeholders across the organization aware of what’s possible beyond operational efficiencies, showing how sustainability is a natural fit in the digital agenda.
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Build a data mindset across the organization. While you can uncover new sustainability angles through existing digital solutions, a more potent impact is possible when data from across the entire operation is shared, collected, and used holistically. McKinsey confirms this with insight from manufacturing, where leading companies “are discovering that measures yielding productivity improvements drive resource-efficiency gains – and environmentally conscious impact.”
There’s no doubt that sustainability and digitalization intersect. But it’s up to industrial leaders to spot the opportunities and be willing to pivot in order to reap the benefits. Awareness and ability to scale are key to not only hitting your operating expense targets, but also to operating more sustainably, and to meeting the ever-mounting climate and environmental standards.
Read and download the State of the US Energy Industry Report here, and I am happy to answer any questions in the comment thread.