Chemical companies have embraced the fact that they need to measure sustainability progress to keep up with market trends. In fact, 7 out of 12 chemical industry leaders aim to decrease waste and energy consumption or use a greater percentage of renewable resources by 2030. Also, 10 out of 12 have committed to achieving carbon neutrality by 2030, carbon positivity by 2050 and have outlined goals to reduce water intensity or consumption.
By tracking their sustainability performance, these companies can comply with regulations and attract investments, as well as improve their brand reputation, reduce operational costs and contribute to a more sustainable future.
However, tracking progress and measuring success toward sustainability goals has become a primary challenge for chemical companies. Surprisingly, less than 45% of chemicals industry leaders currently measure their progress toward sustainability goals. And less than 10% use energy management software to track their sustainability progress.
Unique Chemical Industry Challenges
In addition, chemical companies face several unique industry challenges that demonstrate the need to prioritize measuring sustainability progress:
Consumer perception and demand – most consumers are not confident in the information they hear from chemical manufacturers about their products’ environmental impact and many are willing to pay more for environmentally sustainable products. In addition, scope 3 emissions can affect a company’s ability to sell products downstream to industry as well as consumers.
Responsible waste disposal – chemical companies handle solid waste and manufacturing byproducts such as highly undesirable compounds. Commercializing waste streams as inputs for other industries, for example, requires an understanding and quantification of the current state. And reducing harmful byproducts is a priority of Industry 5.0, so quantifying those targets will become important as well.
Energy consumption – the chemical industry relies heavily on natural gas, and the fluctuation of energy input prices has a large impact on managing profitability and business performance. It is important to enable data-driven decision making to be more responsive to market changes.
Skills shortage – 23% of the chemical workforce will become eligible for retirement by 2025, which creates significant skills shortage challenges as companies try to maintain their operations with a safe and effective workforce despite turnover. In addition, 65% of employees prefer working for companies with strong environmental policies.
The Solution: A Data-Driven Approach
What’s the best way companies can overcome these challenges? Create a digital thread – a seamless flow of data connecting business processes, systems, people and equipment throughout a company’s physical and digital value chain. This allows companies to easily access the data they need to track and report on progress against sustainability goals.
That said, creating a digital thread takes time. Let’s dig into steps companies can take to start measuring their sustainability progress using systems they already have in place and building from there.
First, review the data that existing automation systems create and assess how it can be used for sustainability purposes. Likely, sensors and equipment are already in place that provide operational efficiency data or readings on energy usage. In many cases, existing equipment plays an important role as a source of sustainability-related data.
For example, existing industrial control and automation hardware and software can often double as energy data sources, providing energy data contextualized to production data at the site, area, or equipment levels. When this data is understandable and integrated across operations, it can shed light on broader resource impacts, such as the energy consumed in water-intensive processes. It can also support emissions reporting.
Additionally, evaluate whether key data is quickly visible and available for analysis. Many companies find they have available data, but employees don’t know how to find and use it appropriately. In some cases, there will be work required to architect and optimize how data is gathered, organized and displayed. Regardless of the current state, building a picture of sustainability-related data from existing systems will help companies get the most out of what is already there and identify gaps to prioritize for investments.
Second, once the data is contextualized and trusted, automate actions based on that data and advanced algorithms. Technologies like machine learning (ML) and artificial intelligence (AI) can guide control system responses and reveal continuous improvement opportunities. With ML and AI, systems can dynamically adjust processes in real time based on predicted conditions, improving efficiency and making it possible to achieve sustainability goals at scale.
For example, algorithms can be trained to predict energy consumption of a particular piece of equipment or line, making it possible to detect anomalies and set up rules for corrective action triggers. Similar modeling can be done to predict a host of other scenarios, as well. Additionally, using algorithms in concert with automation systems makes it possible to automatically reduce process variability and optimize resource usage.
Third, scale this data-driven approach across the full product lifecycle and value chain. This involves creating steady streams of actionable data to drive insights and improvements in energy resource usage and could include starting with a line and expanding to an entire facility. The end goal is to create a fully automated continuous-improvement approach, enabling a digital thread of data across every stage of production – and ultimately across the entire value chain.
Driving continuous improvement at scale could involve other changes, such as implementing a fully digitized product lifecycle management system, creating digital product passports, or using digital twins for sustainable product design.
It Can (And Must) Be Done
The digital thread provides many opportunities to gain visibility into tracking and achieving sustainability goals. Still, chemical companies shouldn’t be afraid to start with small steps. Approaches that fully address one use case before expanding to other areas of the business can be helpful. Even taking small actions based on an initial assessment of the current state can have long-lasting effects, making longer-term change both feasible and profitable.
Moreover, sustainability is not a fixed state. Companies must develop the capacity to make and sustain changes and improvements as the landscape continues to evolve and business processes adapt to take advantage of developments in technology.
By adopting digital solutions, chemical companies can effectively track and measure progress and ultimately show their stakeholders how they’re fulfilling their sustainability goals, which will increasingly become a business imperative going forward.