While digital transformation has been a priority for organizations for decades, 2021 saw a convergence of events that greatly accelerated digitalization efforts across industries. Covid, supply chain disruptions, inflation, and labor shortages intensified the urgency with which organizations have pursued this goal. With the need to ensure greater operational resiliency and efficiency, digitalization has quickly shifted from aspirational thought leadership to essential to survival.
We also saw a major shift in how sustainability has factored into the equation. While efficiency and cost reduction have always been goals of digital transformation, 2021 saw ESG and sustainability move from PR initiatives to strategic objectives of companies large and small across industries. The United Nations Climate Change Conference (COP26) was a historic event, which highlighted both the enormous public demand for real environmental progress and also the significant gap between long standing goals and tangible outcomes.
As we move into 2022, sustainability will undoubtedly continue to be a top priority, and one supported and enabled through digital transformation and technological innovation. Here are 4 trends that we anticipate continuing to influence industrial sustainability in 2022.
1) Shifting from reduction to climate neutral and net positive.
As the world struggles to keep pace with climate change, organizations worldwide are taking more holistic approaches to sustainability. Some are taking their sustainability goals a step further and looking to not only reduce consumption, but to reuse and replenish those resources. We discussed this trend of technology-enabled net-positivity in a recent blog post. One example is PepsiCo, which promised to decrease its water consumption in the water-stressed Valley of Mexico region and replenish what it uses. Their method which treats wastewater on site, for example, allows the factory to reuse 80% of the water it draws from the tap or the truck.
Others are following suit in the water sustainability space. Data centers and software companies, for example, that aren’t typically thought of as tied to water issues are continuing to take the opportunity to be creative in this area. One example is Microsoft, which has been exploring underwater data centers that take advantage of the ocean’s natural cooling capabilities.
[ microsoft underwater data center
2) Prioritizing reduction and impact over offsetting.
While carbon offsetting helped many organizations make an impact over the years, it is also seen as problematic and perhaps counterproductive, delaying the actions needed for significant climate change efforts to occur. More and more companies are paying attention to this point of view and are thereby taking leadership in the use of reduction strategies versus carbon offsetting mitigation measures. An article produced by Marketing Brew explored this emerging trend in great detail. “We believe that carbon offsets are only one of the tools in the toolbox,” Jodi Manning, VP and director of marketing and partnerships for carbon-offsetting nonprofit Cool Effect, said in the article. “The most important thing that any of us can do is scale back emissions in the first place,” she explained.
Especially in industrial applications, this means that organizations will be challenged to face their own impact head on and seek novel ways to mitigate it. As we’ve seen across industries, one of the quickest and most effective ways to achieve this is by instrumenting operations to be more intelligent and efficient, as demonstrated by the projected growth of the industrial IoT market.
3) More quantifiable and transparent progress
According to MSCI ESG Research, corporate issuers continued to step up their ESG game in 2021, demanding radical transformation and ways to demonstrate tangible outcomes. This trend could bring more disclosure requirements, scrutiny and calls for action. One company that reflected this trend is Exxon Mobil, the first US oil super major to disclose greenhouse gas emissions data related to customer use of its petroleum products. The company will provide Scope 3 emissions data reports annually, according to S&P Global.
With a proliferation of varying corporate sustainability goals and timelines, the pressure to produce results will encourage companies to adopt more methodical approaches to measuring progress built around increasingly standardized metrics. Every organization will need tools to create visibility across all areas of the enterprise and reliably report on their impact.
Plutoshift ESG dashboard
With the threat of climate change growing more dire, organizations and governments are realizing they can’t tackle the challenges of sustainability within a reasonable timeframe alone. One of the biggest and most promising trends we’ve seen in the last couple years that will surely continue is the rise of accelerators. These accelerators, like the 100+ Accelerator or the Pepsi Greenhouse Accelerator bring together myriad innovators to prove out different approaches and ensure faster, scalable solutions are realized. A benefit of this collective approach is also the innovations created (e.g. AI in industrial processes or circular packaging innovations) don’t remain siloed, but more quickly become industry standards.