Sustainability has taken center stage as a topic of conversation for many companies. This message was clear in the current earnings season as performance against sustainability-related metrics were highlighted nearly as strongly as financial performance. CEO commentary from several companies captured this cautious balancing act, with a good example from Dow CEO Jim Fitterling, noting “our disciplined strategy to decarbonize and grow the company.”
At AspenTech we talk about the importance of this in terms of the dual challenge — meeting the growing demand for resources and higher standards of living from a growing population while also addressing sustainability goals, such as reductions in emissions or elimination of plastic waste in the environment. Combining growth and sustainability targets requires organizations to optimize operations with digitalization as a strategic action to ensure progress.
It is important to note that a focus on sustainability targets does not require a trade-off with profitability. In fact, many companies are finding the combination results in new opportunities. Speaking at the World Economic Forum virtual Davos Agenda in January, Accenture CEO Julie Sweet highlighted that “The research we’ve done says that the trillion-dollar question is how do you operate sustainably and make money? And those companies who have embraced sustainability are more profitable, they have a higher total return to shareholders.” (The in-person 2022 event has been deferred until May.)
I joined a related event that week with our partner Wood Group for an online dialog on how digitalization is fundamental to sustainability progress, particularly in the energy sector. Digital capabilities help companies drive progress toward sustainability goals, increasing efficiencies to lower emissions, delivering increased safety and reliability in operations, and accelerating innovative new energy and process alternatives. All this activity begins with data that reflects current operations and helps to identify deficiencies that need to be addressed.
Companies are taking a comprehensive view of how their businesses need to adapt both in the near-term and long-term to meet their sustainability targets. They’re also considering new ways to measure progress. For many, this pivot to alternate metrics is enabled by the United Nations’ Sustainable Development Goals (SDGs). These SGDs were established in 2015 and are now used broadly to indicate progress toward important goals, which typically are not measured in financial terms.
AspenTech is working with many customers as they target these goals. Digital solutions have always helped companies increase the efficiency of their operations, and companies are now measuring their success more broadly. A few examples of key SDGs that are addressed in AspenTech solutions include:
- SDG #7 – “ensure access to affordable, reliable and sustainable energy for all,” is a clear target for energy companies. Digitalization helps companies identify efficiency improvements in current operations, integrate renewable energy sources, and develop cost-effective future solutions as highlighted in a recent webinar we hosted entitled “3 ways to Drive Progress with Sustainability and Net Zero Targets.”
- SDG #9 – “to build infrastructure, promote sustainable industrialization and foster innovation.” Accelerating the development and scale-up of new innovative solutions is an important effort to make quick progress toward climate targets. Our new sustainability sample models help our customers ramp up their efforts quickly, and were recently recognized with a Green Supply Chain award from Supply and Demand Executives.
- SDG #12 targets responsible consumption and production. Using simulation tools, producers are working to redesign processes to increase efficiencies, reduce use of toxic chemicals, and integrate bio-feedstocks and waste for the circular economy. Projects can progress more rapidly and at lower cost when simulation is used to guide process development, tracking cost and CO2 emissions at each step, and enables the safe and efficient scale-up of new processes.
The urgency of sustainability initiatives is becoming clear for businesses worldwide as consumers, investors, and communities use this lens to make commercial and investment choices. BP CEO Bernard Looney captured this message well in a recent interview with the Financial Times. He said, “You cannot go against the grain of society and expect to be a long-term successful company.”
Read more about the sustainability journey of AspenTech in our fourth annual ESG report. The 2022 edition discusses additional customer success stories and growing employee, community and industry activities that clarify how sustainability is integral to the way we do business at AspenTech.
This post was originally published on the AspenTech blog.