Schneider Electric accelerates net-zero pathways in the race to decarbonize
Climate issues continue to be a persistent global quandary, prompting more countries and industries worldwide to announce pledges to achieve net-zero emissions over the coming years. Despite the challenges in switching out age-old practices for new, more sustainable methods towards the goal of achieving net-zero emissions, many companies are doing their bit to decarbonize.
In fact, enterprises from various industries continue to make major announcements on how they are slashing their carbon emissions and working towards carbon neutrality mandates, especially in countries like the UK where net-zero goals are part of a broader national target. But in many cases, these goals can often take a long time to achieve (likely years), and oftentimes are not prioritized as much as they should be.
Schneider Electric is among those outfits that believe the world can accelerate urgent climate action and halve carbon dioxide (CO2) emissions by 2030. Speaking at the Schneider Innovation Summit, the CEO and Chairman of Schneider Electric, Jean Pascal Tricoire highlighted achievable pathways the company has set forth towards net-zero, as set out in The 2030 imperative: A race against time report from the Schneider Electric Sustainability Research Institute.
The report details the need to reduce emissions by 30% to 50% within this decade, on a scale compared to current levels. Missing this target makes it virtually impossible to limit temperature rises to a 1.5°C degree threshold, as outlined by the Intergovernmental Panel for Climate Change (IPCC).
Echoing this report is the International Energy Agency that has also said most pledges have fallen short of meeting their net-zero goals, with CO2 emissions from energy and industry increasing by 60% since the UN Framework Convention on Climate Change was signed, some two decades ago.
As companies grapple with the impacts of climate-driven extreme weather events such as droughts, flooding, and hurricanes, investor sensitivity to climate-related investment risks has also grown. To date, more than 10,000 companies are disclosing their emissions on an annual basis, while more than 1,000 businesses have set science-based carbon reduction goals. A recent study by Pimco found that mentions of environment, society, and governance (ESG) on corporate earning calls have increased from 0%-1% between 2005 and 2018, to 19% in May 2021.
Simultaneously, pressure to decarbonize has intensified for companies with significant business disruption/climate risk exposure, or activist investors, including oil and gas, financial services, commercial real estate, food and beverage, cloud and other IT service providers, as well as those in hard-to-abate sectors such as heavy industry and manufacturing. Many companies report feeling these pressures for the first time this year, as investors scrutinize their portfolios for environmental and social responsibility commitments.
Schneider Electric is calling for a 3-5x greater effort from governments and corporates when it comes to sustainability goals. The Institute believes the only realistic roadmap for success is to deploy proven digital technologies, alongside increased electrification as the fastest way to decarbonize buildings, transport, and industry. This approach buys time to address hard-to-abate sectors. It’s modeling clearly shows alternative pathways will place too high a burden on consumers.
“Despite increased momentum around sustainability and more companies adopting ambitious targets to tackle climate change, this research reveals how we need to speed up. At Schneider Electric, we are uniquely part of the solution,” exclaims Tricoire. “To support organizations in their quest to decarbonize at pace and deliver on their climate commitments, we are accelerating the expansion of our global sustainability consulting services business to meet the increasing demand for meaningful progress on energy transition and climate action goals.”
Strategies to decarbonize value chains
Building on its sustainability leadership and the ambition of the 2021-2025 Schneider Sustainability Index, Schneider Electric is accelerating its global sustainability consulting business, expanding on a 10-year track record of success in energy and sustainability services. This includes providing climate action consulting, affiliated supply chain decarbonization and climate risk assessment services, as well as communications services such as ESG reporting/ratings or reputational and sustainability claims.
Meanwhile, the EcoStruxure Machine increases efficiency for machine builders and shortens their development time. With the new Lexium MC12 multi-carrier for transporting, grouping, and positioning products, OEMs can achieve greater productivity and unprecedented flexibility with up to 40% savings on investment costs and 50% faster machine installation and commissioning. Combined with digital twin technology, the new multi-carrier also reduces machine design and time-to-market by up to 30%.
Achieving ‘net-zero’ with the right partner
Having been recognized by the Corporate Knights Global 100 Index as the world’s most sustainable corporation in 2021, Schneider has announced the acceleration of its global sustainability consulting business to meet the increasing demand of organizations making meaningful progress on their energy transition and decarbonization goals.
The division expansion will double the company’s existing consulting practice and include new services and digital solutions across sustainability strategy, climate action and risk management, ESG reporting and materiality, circularity, and traceability, among others, bolstered by enhanced growth in Europe, APAC, and the Americas.
“We are seeing increasing market momentum as businesses set and work towards decarbonization commitments. But the current trajectory of emission reduction is still not bold enough, not fast enough. By growing our consulting business, we can help our clients accelerate this momentum,” said Schneider Electric consulting group president Susan Uthayakumar.
As enterprises look towards net zero, having the right partner in achieving it may just show that they are really serious about it and not just making pledges as a PR exercise.