New research shows that the paths to net zero, resilience, and digital transformation frequently intersect. Across industries, those points of convergence can be stepping stones to new business opportunities.
As average temperatures continue to rise and the global population shifts and urbanizes, mega-trends are ripping up old ways of operating. Demand for greater sustainability is on the increase, with both energy and resource-intensive industries under intensifying scrutiny.
To understand where those sectors are on the road to net zero, Autodesk partnered with global research firm Frost & Sullivan to survey 600 Architecture, Engineering, and Construction (AEC) and Manufacturing executives in leading European markets. How are they going to deliver business results alongside sustainable outcomes? Here’s what we discovered.
Regional Insights. Global Relevance.
We found that four out of five companies now have a formal sustainability team in place, typically with a wide-ranging remit and lines of reporting that reach straight into the boardroom. That tells us green objectives have moved beyond CSR to become an operational norm, part of a new decision-making process that reflects the cross-functional and collaborative requirements of achieving net-zero.
The majority of leaders we surveyed believe that to maintain a competitive advantage and retain customers, companies must embrace sustainability. This is a major cultural shift as companies chart new ways to differentiate by demonstrating environmental leadership.
As a result, many firms are going beyond industry standards to strengthen their sustainability credentials — and even looking outside industry siloes to fashion cross-sector models of circularity.
Here’s One Example
Global steelmaker ArcelorMittal is moving away from its traditional reliance on fossil fuels and testing new energy sources like biomass. The process of reducing iron ore inevitably requires a lot of heat, but it can be generated using discarded wood from the construction industry, as a facility in Belgium is doing.
The waste gases from the blast furnace are then captured and converted into ethanol and methanol, which can then be used to create other products that would have been made from carbon-intensive sources in the past.
“Once you establish a pattern of circularity, the environmental benefits keep multiplying,” said Annie Heaton, ArcelorMittal’s Head of Sustainability, in a recent webinar. During that event, Heaton and I discussed the implications of Frost & Sullivan's findings, and she raised the possibility of large manufacturing businesses becoming carbon negative.
“If we use a biomass input and then bury the CO2 using a system like BCCS (biomass and CCS) for carbon capture, we can turn heavy industry into a carbon sink.”
Six Key Takeaways From the Research
1. Digitalization is enabling sustainable decisions
With access to a vast amount of data and more granular analytics, sustainable outcomes are becoming part of everything we design and make. Supply chain sustainability is growing in importance and increasingly supported by product passports, track-and-trace solutions, cutting-edge sustainability rating, labeling, or certification.
Giving customers better information and the tools for data-driven decision-making empowers them to make informed choices about sustainable materials and metrics.
2. The UN's Sustainability Development Goals are re-shaping how business is conducted
Sustainability objectives are shaping how buildings and products are designed, created — and in the case of buildings — managed across a lifecycle. Circularity is fully on the agenda now, meaning disassembly and re-use of materials are actively planned for.
The UN's 17 Sustainability Development Goals (SDGs) and the accompanying circular economy business model have become vital guides as a result.
3. Convergence across industries is happening
Manufacturing, architecture, design and construction are all learning mutual lessons, particularly in areas like supply chain data sharing, modular factories, and the increasing prefabrication of construction components. Sharing best practices across sectors is accelerating opportunities to reduce the carbon footprint of everything we're designing and making.
4. Stakeholder capitalism is on the rise
The idea that businesses have to address the needs and desires of multiple stakeholders, from employees to customers to communities as well as investors, has finally taken hold. As more and more stakeholders become involved in business decision-making, it's driving the movement toward more sustainable future operations.
5. We live in a hyper-connected world
If the past year has taught us anything, it’s how easily connections can be shattered and re-shaped. Today we have better tools to analyze and navigate the complex environments we live and work in. They help us make better decisions about energy consumption, responsible sourcing, and the industrial processes that will guarantee a more resilient future.
6. Sustainability has become a business fundamental
Sustainability is becoming central to business operations‚ arguably as important as people, raw materials, and credit lines. If that sounds like an exaggeration, consider how corporate finance is re-organizing for a bigger role in hitting net-zero objectives. The EU has now completed its Taxonomy for sustainable activities, a vital ingredient of the broader plan for financing sustainable growth.
“It's going to be the guideline for every financial institution when they’re deciding where they’re going to put their money,” said SWECO’s Mattias Goldman, chief sustainability officer at SWECO. Speaking in our recent webinar, he shared that financiers in Europe, America, and ASEAN are joining policymakers to decide how financial instruments can be used to combat climate change.
Every company, he says, is going to have to raise its game as a result. “With the European Green Deal and the ‘build back better’ movement in the US, it’s becoming clear that if you only pursue mediocre initiatives for climate and sustainability, you're going to have to pay for them yourself. If you do something top-notch, there is a great opportunity to have a large part of the bill paid by somebody else.”
Sustainability and Opportunity
We live in an increasingly interconnected economy, and we're learning that it is more fragile than we ever realized. The pandemic may turn out to be the reset button for a green recovery and an opportunity to focus on achieving the UN’s SDGs, but only if a circular economy business model supports those objectives.
Sustainability offers businesses greater resilience, while the digital initiatives required to achieve it open up new opportunities for growth. Tomorrow’s FTSE 100 may well be comprised of companies who were first to re-engineer their supply chains and production processes to create a closed-loop of inputs and outputs.
At Autodesk, we're doing our bit — pursuing ambitious sustainability objectives in our own business operations and supply chain while remaining laser-focused on enhancing the tools and capabilities that will help the industries we serve progress on the path to sustainability and greater digital efficiency.