Schneider Electric, one of the leading companies in the digital transformation of energy management and automation, issued a call, on January 17, 2023, for governments and companies around the world to accelerate their sustainability action and step up investments into technologies. Research conducted by the company states, most companies plan to spend under 2 per cent of revenues on sustainability and decarbonisation initiatives. Spiking energy prices, the energy supply crisis and fast accelerating climate change together are causing major challenges for companies, economies and societies around the globe. The backdrop was also discussed at World Economic Forum annual meeting in Davos, Switzerland. The meeting was scheduled from January 16 to 20, 2023 and a senior executive of Schneider Electric attended it.

"Today’s climate and energy crises are an economic reality for ever-increasing numbers of people. As business leaders and policymakers come together at Davos, we must act in our own best long-term, not short-term, interests," said Jean-Pascal Tricoire, Chairman and CEO, Schneider Electric. The research also found that on the demand side of the energy transition, only 31% of organisations currently push electrification as a way to decarbonise. “We must not avoid the tough decisions. There can be no long-term prosperity without a complete energy transition. At Schneider, our approach is to ‘Digitise Strategise, Decarbonise’ businesses, governments and societies must do this now, to make good on the commitments they have made," suggested Tricoire. 38% of global carbon dioxide (CO2) emissions come from the built environment, and a further 32% from industry. Schneider Electric provides deep insights into decarbonisation trends and solutions, through surveys, research and in-depth reports compiled by the Schneider Electric Sustainability Research Institute.

A survey on corporate sustainability
An independent survey report ‘A C-Level Pulse Check – Corporate Sustainability’ published by Schneider Electric last year in December, interviewed more than 500 C-suite executives and showed the results that on average, the financial commitment to sustainability and decarbonisation initiatives across the companies surveyed was less than 2% of projected revenue over the next three years. Corporate sustainability commitments and investments are often hampered by the complexity of decarbonisation, though such investments are often efficient and cost-effective, with return on investment under one to three years.

The highlighted challenges for implementing sustainability, mentioned in the reports are stakeholder alignment, budget, technology, skills and regulation. However, a majority of the respondents noted that enhanced industrial automation and the upgrading of electrical infrastructure will form a key part of their sustainability plan for the next three years.

The report further shows, renewable energy procurement is among the top initiatives pursued on the supply side, while electrification which is a key demand-side measure, scores low among organisations’ sustainability priorities. Alongside electrification, delivering increased efficiency across existing infrastructure through digitisation and automation will be among the most important levers in the next decade, being the fastest and most capital efficient means for many organizations to reduce emissions.

Embracing sustainability as a business imperative
Another recent Schneider Electric report on the EU’s electrification potential found that, sectors in which electrification is both feasible and attractive could raise electricity’s share of the energy mix from around 20% to 50%. In turn, the share of natural gas and oil would drop by around 50%, contributing significantly to improved energy security.

Today’s European energy crisis follows decades of secure, reliably available energy and relatively stable pricing. Many are experiencing for the first time unpredictable energy supplies and unaffordable prices, demonstrating a failure both of long-term energy security preparedness, and of the implementation of decarbonisation plans. This in turn underscores the importance of re- evaluating the entire energy equation, from the supply side, energy transition to the demand side, energy efficiency.

“Purpose and profits must align to become powerful forces in the fight against climate change. We already have the technology to avert the energy and climate crises, and to deliver safe, reliable, and sustainable energy distribution and energy use. Our data-driven approach, spanning industrial automation, digitisation and the digital twin technology of the enterprise meta-verse, combines to unlock a brighter, more sustainable and more prosperous future. The urgency for action has never been greater than it is now,” said Tricoire.