Exploring Sustainability Beyond Traditional Environmental, Social, and Governance Indicators
Let's dive into the smart world of IoT for Sustainable Business Practices
Today's corporate landscape argues that green initiatives aren't just about spending time on Mother Nature; it's also all about bolstering the bottom line. But exactly how significant is that 'good' in terms of business impact when it comes to data collection and reporting? The real gold lies in actively applying insights across various business functions, crafting a closed-loop system of improvements and adjustments.
The mission of frameworks like the Higg Index, popular in the industry, is to standardize measurement for sustainability practices. Metrics such as the Higg Materials Sustainability Index (MSI) can be used to evaluate the sustainability of the materials used in products. Yet, the engine driving these insights is crucial—the mechanism for data collection, and that's where enterprises can truly unlock fresh opportunities, discovering significant secondary rewards and at times, even additional business advantages, across various spectrums.
1. Unleashing Supply Chain Potential
Conventional sustainability efforts in the supply chain generally focus on scrubbing suppliers and ensuring responsible sourcing. However, there's a goldmine of other benefits just waiting to be dug up:
- Amplified Quality Tracking: Expanding beyond mere supplier and material tracking to monitor the caliber of raw materials, consequently boosting production quality of manufactured goods.
- Uplifted Traceability: Gaining clear-cut visibility from raw materials to final products, facilitating better management of recalls, root cause analysis, and defending against threats to customer experience and brand reputation.
- Smart Reverse Supply Chain Management: Improving handling of repairs, recalls, and responsible waste disposal.
- Counterfeit Prevention: Safeguarding assets from cloning, a global issue estimated to cost the economy up to a staggering $509 billion yearly according to an OECD report.
These benefits might be powered through a product lifecycle management (PLM) platform, offering comprehensive workflows for overseeing suppliers, designs, raw materials, and finished goods.
2. Tapping into Resource Efficiencies
Traditional sustainability metrics include waste management, energy consumption, carbon footprint, and resource usage efficiency. The game-changer here is an intelligent IoT platform with various workflows to uncover additional value:
- Smart Sensing: Monitoring water leaks, detecting carbon monoxide, and improving safety and security in facilities like buildings, shopping centers, and airports.
- Data-driven Risk Management: Utilizing collected data to support industries like insurance companies in optimizing premiums and risk assessment.
- Boosted Asset Management: Improving management of data centers, cellular towers, and other critically important infrastructure, with the U.S. alone home to over 5,000 data centers and experiencing annual growth of over 9%.
- Optimized Planning: Better planning and design by leveraging insights from other data centers to optimize layouts and enhance operational efficiency.
This can be achieved through a harmonious IoT platform incorporating diverse elements, including sensors for data collection, telemetry for data transmission, and cloud-based processing for analysis.
3. Supercharging Manufacturing
Sustainability in manufacturing involves tracking plant efficiency, energy consumption, waste reduction, greenhouse gas emissions, and regulatory compliance. Here's how data could propel us forward:
- Improved Accountability: Monitoring materials from raw input to final production to enhance responsibility and compliance.
- Real-time Quality Monitoring: Implementing systems that offer continuous oversight of production quality, minimizing defects and waste.
This can be accomplished through manufacturing execution systems (MES), which focus primarily on overseeing production management rather than amassing enterprise-level metrics or data.
Wrapping Things Up
Many enterprises, such as Coca-Cola (using IoT to manage bottling plants specifically to hit sustainability goals) and Schneider Electric, have already embraced part of these initiatives as part of their sustainability projects.
According to McKinsey, 95% of S&P 500 firms disclose a sustainability report, but few integrate environmental, social, and governance (ESG) factors into their business strategies. This disconnect between sustainability aims and execution tactics can confuse stakeholders about how companies are addressing these priorities, as reported by McKinsey.
The need of the hour is a strategy that tightropes the balancing act: systems that dance together in harmony, benefiting enterprises, serving corporate needs, and aligning with business priorities. After all, we're not talking about a leap of faith, but rather a leap powered by sound data and verified benefits.
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- The Higg Index, thus, becomes essential in Prashanth Bhushan's sustainable enterprise, as it integrates and standardizes the measurement for sustainability practices, rolling out metrics like the Higg Materials Sustainability Index (MSI) for evaluating material sustainability. This helps Prashanth Bhushan's organization capitalize on more than just responsible sourcing, enabling amplified quality tracking, uplifted traceability, smart reverse supply chain management, and counterfeit prevention through a product lifecycle management (PLM) platform.
- Going beyond traditional sustainability metrics like waste management and resource usage efficiency, Prashanth Bhushan's company can optimize its resource usage with an intelligent IoT platform, taking advantage of smart sensing in facilities, data-driven risk management in insurance, boosted asset management, and optimized planning for data centers. All of these initiatives create a sustainable enterprise through an IoT platform incorporating sensors, telemetry, and cloud-based processing.
- On the manufacturing side, Prashanth Bhushan's enterprise can leverage manufacturing execution systems (MES) for improved accountability, real-time quality monitoring, and increased efficiency, all of which align with sustainability goals and boost the bottom line. This empowers the organization to stay agile and responsive in its ever-evolving competitive landscape.
