Davos Agenda

Digitalization is the key that can unlock net-zero for industry 

Digitalization can accelerate decarbonization and boost productivity. Pictured here is a woman

Digitalization can accelerate decarbonization and boost productivity. Image: Unsplash/ThisisEngineering RAEng

Peter Herweck
Chief Executive Officer, Schneider Electric
Peter Weckesser
Chief Digital Officer, Schneider Electric
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Davos Agenda

This article is part of: World Economic Forum Annual Meeting

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  • The digital revolution offers industries the promise of a more efficient, productive and sustainable future.
  • Peter Herweck, CEO of AVEVA, and Peter Weckesser, chief digital officer at Schneider Electric, sat down to discuss the possibilities – and how organizations should be taking advantage.

Peter Herweck: The key to unlocking a net-zero future in industry is transforming the way industrial teams work through digitalization. Higher efficiency and more ambitious sustainability objectives are enabled today by technologies that provide real-time data to optimize and better automate industrial processes and energy management. But a successful corporate sustainability strategy needs to be designed and implemented end to end if it is to deliver concrete results across the business and its ecosystem. Effectively integrated, digitalization and sustainability drive deeper, broader change when they are aligned: according to Accenture, companies that integrate digital and sustainable transformations into their operations and value chains are two and a half times more likely to be among tomorrow’s best-performing businesses than those that don’t. Once more companies understand the opportunity, and put sustainability and digitalization strategies in place, how can leading-edge technology accelerate the decarbonization of the industrial world?

Peter Weckesser: I agree, most sustainability challenges are inherently complex. They demand new thinking, actionable insights, scalable solutions, and expert partnership to drive change at a systemic level. This is where digitalization becomes an imperative.

How can industrial organizations seize the potential of digitalization for greater sustainability?

Peter Herweck: When it comes to unlocking efficiency and sustainability gains, cloud and artificial intelligence (AI) enabled operating systems are important, because they empower companies to transform how they work to solve their biggest challenges – such as decarbonizing while maintaining business continuity and remaining profitable. Because it is all delivered through the cloud, we can take advantage of the breadth of AVEVA’s whole portfolio – cloud is the glue and AI the intelligence that underpins more informed decisions.

Peter Weckesser: With unified smart analytics that span complete data stacks, teams can leverage AI across all lifecycle stages of their activities. This gives decision-makers the capacity that they would not otherwise have – knowledge, data-led intelligence, and the ability to spot opportunities to drive down carbon use and boost sustainability.

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Peter Herweck: Exactly. At AVEVA, we infuse AI and predictive analytics products and portfolios to make them smarter and we use the cloud to add scope, scale and reach. When we integrate those capabilities across our portfolio, connecting the different AI modules together into a broader intelligence, using the cloud, we can change how industries operate. This also enables us to evolve how we track, measure and drive decarbonization throughout complex value chains, connecting teams and revolutionizing work. We call this the connected industrial economy. If we look at concrete scenarios, how can brownfield industries use a data-centric approach to drive their decarbonization strategies?

Peter Weckesser: Our Lexington Smart Factory is an example to manufacturing facilities around the globe that sustainability needs to be part of their operational model — and that smart, connected technologies can drive efficiency, profitability and sustainability. The global smart factory and distribution center initiative is part of our vision that electrification and digitalization are vital tools in the fight against climate change. In order to capture greater energy consumption granularity, when and where it happens in the plant, the Lexington smart factory leverages IoT connectivity with power meters and predictive analytics to optimize energy cost. This has led to a 26% reduction in energy ruse, a 30% cut to CO2 emissions, and a 20% cut in water use. It was recognized as a Sustainability Lighthouse in 2020, now one of only three worldwide recognized by the World Economic Forum. It shows how a data-centric approach brings sustainability to existing industrial settings. But what about using accurate predictions to avoid problems in the future?

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How can digital technologies help deliver the climate goals?

Peter Herweck: If we look at Duke Energy, they used AI to drive savings of more than £4 million in a single catch – an operational failure that was avoided thanks to artificial intelligence, saving cost and emissions. In Italy, ENEL – working with AVEVA and Schneider Electric – is using next-gen predictive maintenance to get a 360-degree view of risk and improve decision-making. Once an issue is identified with predictive maintenance, the team can ask: can we make it to the next planned outage, or do we need to schedule an emergency maintenance shutdown? When is the optimal time to perform maintenance in order to minimize adverse impacts on operations and associated emissions? What prescriptive actions should we take pre-emptively to mitigate problems? This next-gen technology is transforming how the team can produce energy and deliver to customers, driving efficiency and sustainability. Should these be considered as major twin trends?

Peter Weckesser: As industrial organizations around the world face a challenging financial year, we anticipate that the drives towards sustainability and digitalization will become even more closely linked. To date, more than 50% of global investors have committed to the 2021 Global Investor Statement on the Climate Crisis. This motivates companies to meet rigorous requirements supporting decarbonization, and to accelerate climate-neutral or net-zero investment patterns, aligned to Task Force on Climate-Related Financial Disclosures (TFCD) reporting standards. With this increasing investor focus, combined with social impetus for concrete action, leading-edge digital technologies will play an ever-more central role in realizing the sustainable industries of the future.

Peter Herweck: Absolutely. Digitalization and data-centric operating processes are critical to achieving net zero. Digital transformation is the key accelerator that enables innovations from carbon capture and storage to clean hydrogen production. For example, we are already working with companies in Canada, South Africa, Australia and Saudi Arabia to shape and engineer green hydrogen facilities which will accelerate the decarbonization of energy. Combining decarbonization tools and work processes, leaders can make informed business decisions. Unified insight, founded on a digital twin, means engineering teams can consider an unlimited range of operating scenarios and engineer plants to minimise emissions and optimise risk. Technology is changing quickly in the nascent green economy, and rigorous simulations offer more sophisticated predictions and insights than data from older legacy processes. Cloud enables our customers to evaluate simulated scenarios faster than ever today. We have the technology in place, but let’s not forget about the role of people in the digital transformation.

Peter Weckesser: People are crucial! It’s about taking a customer-centric approach to the entire value chain. As companies switch to focus on outward thinking, simplifying processes, minimizing wasted work and creating value and sustainable growth, agility and resiliency grow. This the promise of digitalization. The trend is accelerating and we are ideally placed to help realize the industries of the future.

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