By Jonathan Fogarty, Industry Advisor – Utilities (ANZ) – SAP
Sustainability is of utmost importance in the energy industry, encompassing the social, economic, and environmental aspects of energy production, distribution, and consumption.
The transition to sustainable energy affects every organisation differently. But the end goals are the same: deliver sustainable, safe, and reliable energy products and services at a reasonable price. For energy companies, the search for more sustainable operations can even mean reviewing and rethinking business models.
However, embracing sustainable approaches is crucial for the long-term viability of the energy industry and for mitigating the adverse impacts of energy production on the planet and society. It must be a guiding principle to shape the industry’s practices and decisions. There also needs to be a co-ordinated effort toward sustainability across the entire value chain, including production, transportation, and consumption.
Our recent white paper, Managing the changing energy landscape, outlined how energy providers can use intelligent infrastructure to help them on their journey to a more sustainable future.
Here, we will explore the key areas where energy companies can focus their efforts to achieve their sustainability goals.
Digital transformation
Digitisation opens doors to new, innovative business models. That’s no different in the energy industry.
Digital technologies can enable energy companies to optimise their operations, reduce their environmental impact, and improve overall efficiency. Implementing smart grid technologies, for example, optimises energy distribution, reduces energy losses, and enables real-time monitoring of energy usage.
Digital technologies can also enable remote monitoring and maintenance of energy infrastructure, reducing the need for physical inspections and minimising the carbon footprint associated with travel. Advanced analytics and data-driven insights can help energy companies optimise their energy production and usage, predict equipment failures, and improve energy efficiency.
Meeting customers’ expectations
Research has shown that Australian consumers have become increasingly conscious about their impact on the environment, especially after COVID-19. Almost nine in ten (89%) consumers have already reduced their environmental impact in some way by adopting sustainable practises.
At the same time consumers are expecting more transparency from brands when it comes to sustainability, putting pressure on companies to act and drive change. While energy providers focus on reviewing their business models and put their efforts in meeting those expectations, there is also a responsibility for these organisations to not only incentivise but also facilitate the eco-friendly behaviour. For example, companies could invest in raising awareness about the benefits of renewable energy sources and the impact of energy consumption on the environment.
Educating consumers and providing them with more sustainable alternatives is no longer a ‘nice-to-have’, but a key factor that will drive the company relationships with customers. By leveraging technology solutions like SAP Utilities Core, providers can transform data in actionable insights that can help them taking the next step to achieve that.
Reporting beyond regulations
By providing transparent and comprehensive ESG reports, energy companies can demonstrate their commitment to sustainability and provide stakeholders with information to make informed decisions.
Energy companies can establish robust ESG reporting frameworks that align with industry standards and guidelines, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These frameworks can provide a structured approach to measure and report on key indicators, such as greenhouse gas emissions, water usage, waste management, employee safety, community engagement, diversity and inclusion, and governance practices.
In addition to reporting, energy companies can engage with stakeholders, including investors, customers, employees, and local communities, to gather feedback and incorporate their perspectives into their sustainability strategies.
Energy companies can also establish internal sustainability policies, guidelines, and procedures that govern their operations and decision-making processes. These include setting targets to reduce their carbon emissions, investing in renewable energy sources, optimising resource usage, and implementing waste reduction measures.
Driving change to build a sustainable future
As the world faces the growing challenges of climate change and environmental degradation, energy companies have a vital role to play in safeguarding our planet’s future. From embracing renewable energy sources and reducing carbon emissions to promoting eco-friendly practices and fostering innovation, utilities must embrace sustainability as a core value.
It is a complex task that requires innovative solutions and a commitment to balancing economic, social, and environmental considerations. While organisations have already made significant strides in their sustainability efforts, we still have a long way to go to build a strong culture of sustainability throughout industry.
