Companies boost digital and AI to power their way to sustainability
Sponsored by Schneider Electric
As Australia gears up to meet ambitious emissions targets, a significant shift is occurring within the business landscape.
The latest findings from the 2024 Sustainability Index survey reveal that companies are ramping up their investments in digital technology and artificial intelligence (AI) to drive sustainability. Yet, despite recognising the importance of these tools, many businesses still struggle with basic data management and face looming regulatory pressures.
Technology exists today to improve efficiency and cut emissions, leading to lower energy costs.Credit: iStock
The survey, conducted by industry leader Schneider Electric, found that 73 per cent of companies see digital technology as crucial for achieving sustainability goals, and a majority are increasing their spending on digital transformation.
With the introduction of mandatory climate-related financial disclosures set to take effect from 1 January 2025, businesses are under growing pressure to adopt robust decarbonisation strategies.
Lisa Zembrodt, principal and senior director of sustainability consulting business at Schneider Electric, stresses the urgency of this transition.
“Most businesses see sustainability as offering a competitive advantage, but many don’t grasp the urgency of climate action,” she says. “With new climate-related financial disclosure regulations rolling out next year, having a roadmap to transition your business to the low-carbon economy will be essential and companies should urgently develop and implement a net zero plan.”
Lisa Zembrodt, principal and senior director of Schneider Electric’s sustainability consulting business.
The survey underscores a divide between companies at the forefront of sustainability and those lagging behind.
“This year’s survey results point to an ongoing divide between the most progressive companies and those yet to act – but time is running out,” Zembrodt says. “We need to bridge this divide by sharing knowledge and resources across industries, being clear on expectations, and looking to governments for leadership and support.”
Despite the progress, two-thirds of respondents revealed that they still rely on basic methods, such as energy bills and spreadsheets, to monitor and manage their energy usage. This lack of sophisticated data management tools is impacting decision-making and hindering efforts to improve sustainability.
“Companies should not wait to establish and act on a decarbonisation plan,” Zembrodt says.
“The tools and technology exist today to improve efficiency and cut emissions, leading to lower energy costs.”
“In an environment of greater transparency, progressive companies are optimising their sustainability and emissions performance, and with that they’re improving efficiency and are better able to attract capital.”
Pacific Energy, a key player in Australia’s energy sector, is one player that is not waiting.
The company, which serves mining outfits and state-owned utilities, has been deploying stand-alone power systems across Western Australia. These systems aim to reduce carbon emissions and improve grid reliability and safety.
Daniel Jackson, managing director of renewables at Pacific Energy, says data plays a key role in driving sustainability.
Daniel Jackson, managing director of renewables at Pacific Energy.
“Monitoring, analysing, and reporting data is vital to process improvement and operational transparency, both of which contribute to overall sustainability,” says Jackson.
“Using data created by Schneider Electric’s Insight & Gateway products, Pacific Energy collates significant data that helps clients assess and report on energy use and carbon reductions.”
And Jackson stresses the importance of immediate action. “The time for businesses to act on decarbonisation is now, and the ability to provide reliable tangible data will make all the difference in whether you are successful in developing and implementing your strategies,” he says.
“This is a once-in-a-lifetime challenge to undertake an energy transition, and business does need government support to legislate, where appropriate, drive new and emerging technology with grants and promote public awareness.”
Jackson says the coming mandatory climate related financial disclosure requirements are a concern because they will be “a large piece of work for many businesses”.
“It’s mandatory for large business but will indirectly impact small to medium business as well,” he says.
“As a manufacturer here in Australia, cost is ever front of mind, but we see sustainability as a competitive advantage and we have taken many steps to develop and implement our sustainability plans.”
Pacific Energy’s partnership with Schneider Electric has been pivotal in enhancing efficiency across one of the world’s largest interconnected grids.
The collaboration has led to significant reductions in energy use by decreasing reliance on traditional thermal generation sources and increasing renewable energy penetration.
The increasing investment in digital technologies is reflective of a broader trend in the business world. The Sustainability Index survey found that 53 per cent of companies are increasing their investment in digital transformation, 39 per cent in automation, and 36 per cent in renewable power.
Among the surveyed companies, 46 per cent reported investing more in AI and analytics, a notable increase from three years ago.
Zembrodt says that the investment in AI is not surprising. “Businesses are actively investing in digital tools to help understand, control, and reduce energy usage,” says Zembrodt.
Crucially over two-thirds, 67 per cent of businesses, say that a lack of data impacts their decision-making.
“Information is power. Data is key to managing climate risk – without it, companies don’t have insights into what’s driving their emissions.”
The survey also revealed a significant digital divide. Two-thirds of companies are still using basic tools like energy bills or spreadsheets, which presents a major barrier to effective decision-making and efficiency improvements.
“Most companies agreed that data limitations were impacting their decision-making,” Zembrodt says. “This is a significant barrier to monitoring and improving efficiency and sustainability.”
Looking ahead, businesses face the challenge of aligning with the new climate-related financial disclosure requirements. Less than one in five companies currently have a comprehensive decarbonisation roadmap, and 40 per cent have yet to start their decarbonisation efforts.
The looming regulations will require companies to disclose their climate-related financial information, a move expected to enhance transparency and comparability across industries.
“The role of technology is critical in the management of the net zero transition,” says Zembrodt. “While development and use of AI tools can be demanding on power supply and grid systems, these tools can also offer great support for business in monitoring and controlling emissions.”
As businesses navigate this transformation, the focus must remain on leveraging technology to achieve sustainability goals while meeting regulatory requirements.
To download the full Sustainability Index, 2024, please visit Schneider Electric, where last year’s report is also available.