The Decarbonization Pathway: How to Work Toward Sustainability in Operations

Summary

In September 2021, the World Economic Forum dubbed Schneider Electric’s Lexington, Kentucky, plant a Sustainability Lighthouse—one of only three in the world. Schneider’s Lexington plant produces high-quality load centers and safety switches that serve as a basis for commercial and industrial power systems.

The World Economic Forum also designated the company’s Smart Factory in Wuxi, China, as an Advanced Lighthouse. These Lighthouse designations highlight plants’ efforts to achieve operational competitiveness while concurrently taking strides toward environmental stewardship, helping usher the world into a greener future.

“The bridge between climate ambition and action is shorter than you think,” Schneider’s website says. “Around the world, organizations are setting and achieving net-zero targets. Zero waste. Zero emissions. Zero carbon. How do we know? We’re the ones helping them do it.”

“Like digital transformation, sustainability is a journey,” said Luke Durcan, Director of Innovation & Incubation– North America, Schneider Electric. And now, Schneider Electric would like to share its journey—and a roadmap others can follow—with the world.

Schneider’s Sustainability Business Division

After receiving external recognition in 2021, the company established the Sustainability Business Division (SBD), a newly created global division with the mission to bring all Schneider acts together to provide unprecedented support to customers to achieve sustainably transformations.

“All the lessons and all the success that we’ve had in decarbonizing our own facilities and manufacturing sites are worth sharing with the world,” said Tam Osentowski, principal consultant, Sustainability Business.

“We at Schneider created a sustainability roadmap through our years of experience, refining the process into something manageable that others can duplicate,” Durcan said. “We can show the plan works because we have significant energy savings in our own buildings. Talking the talk is one thing—but when you have the data showing you can actually put something into practice, that’s really something.”

The goal: Reaching global net-zero emissions by mid-century

Businesses must accept their responsibility to play a role in reaching global net-zero emissions by mid-century to avoid the worst of climate change, according to Schneider’s thought leader website. Schneider provides consultations to companies in a variety of sectors, including both heavy electro intensive industrial manufacturers and commercial customers who work in healthcare, real estate, food & beverage, and more.

“Every segment has a role to play in the decarbonization journey,” Osentowski said.

Decarbonization produces numerous positive results, such as conservation of results, satisfaction of stakeholders, organizational growth, increased innovation, growing industry innovation and talent retention.

“Decarbonization used to be a ‘nice-to-have,’ but now it’s a business imperative,” Osentowski said. “First, it’s conserving resources and making the world a better place. The dual benefit is that you also get to boost your bottom line.”

The Lexington Plant, for example, applied Schneider Electric’s EcoStruxure architecture to bring together previously siloed data to make informed decisions that led to $6 million in efficiency savings.

The decarbonization pathway

Schneider’s decarbonization pathway espouses four basic steps: Define success, set targets, deploy programs and sustain results. Though each plant will need to apply the steps differently, some general principles for successful application apply in every case.

“For sustainability to work, you need the engagement of the full spectrum of operations,” Durcan said. “It involves a conversation within all levels of the organization to change not only the operational methodology but also the company’s culture.”

Though everyone eventually needs to be involved, Osentowski pointed out that usually, someone in leadership at the company helps create a strategic plan for decarbonization and helps encourage others in the organization to get behind it. “One of the things we do is help the organization identify who needs to be involved. We conduct sustainability workshops to determine the level of investment.”

1. Define success.

The first step to decarbonization is defining success. Organizations have to first understand where they are in their carbonization journey before taking steps toward improvement.

“An organization needs to do a footprint assessment and establish their baseline, looking at emissions and develop an understanding of emissions by source,” Osentowski explained. The Sustainability Business can help clients do this by assisting with ongoing data measurement and providing a single data record that can span thousands of sites.

Measuring emissions can involve a large number of variables. “You have to make sure each product going through a product line takes up the same carbon footprint each time,” Durcan said. “What if you scrap 10% of the products you make? Scrap is a carbon issue. If you launch a batch of 100, but only 80 go through, your energy goes up on that batch.”

To record and analyze data at this level of detail, the SB recommends one of Schneider’s EcoStruxure Advisors, resource and energy management software that provides organizations with real-time data to inform decision-making. Schneider’s Lexington plant uses Resource Advisor in the paint room—the plant’s biggest energy drain—to track the data to understand the pain points and identify specific opportunities for improvement.
 
“What’s measured gets managed,” said Osentowski. Once a company’s footprint has been thoroughly assessed, it’s time to set targets.

2. Set targets.
Setting targets involves defining goals and establishing a timeline to get there. Schneider, for example, has set a target that involves reducing carbon emissions by 35% by 2030.

Osentowski emphasized the importance of setting science-based targets. “A science-based target involves a clearly defined pathway in line with climate science,” she said. “If your target isn’t science based, your organization isn’t being held accountable to pursue what is necessary to limit global warming to the 1.5 degree scenario.”

The Lexington factory is part of Schneider Electric’s worldwide smart factory and distribution center initiative that works toward the company’s STRIVE benchmark.

• Sustainable: Projects build carbon-neutral, circular supply chains but preserve local biodiversity.
• Trusted & Resilient: The company applies multi-sourcing to avoid single-point failures in its production lines and ensure superior quality.
• Intelligent: Schneider leverages digital to automated a remotely orchestrated supply chain.
• Velocity & Efficiency: Schneider Electric relies on its strong regional present and supply partners.

Osentowski said more than 2600 companies have committed to setting science-based targets. Because of the increasing focus on environmental sustainability, colleges have begun to offer bachelor’s and even master’s degrees in sustainability management and consulting. Schneider offers sustainability practitioners who have been working in the field for 15-20 years. “If you look on LinkedIn and type in ‘sustainability,’ you’ll probably see job titles like ‘Director of Sustainability.’ It’s a hot market right now because of Environmental, Social and corporate Governance (ESG)."

When setting targets, companies need to consider Scope 1 emissions, Scope 2 emissions, and Scope 3 emissions. Scope 3 emissions are the most difficult to track and improve.

• Scope 1 emissions: These emissions involve everything a company directly controls, such as operations.
• Scope 2 emissions: Scope 2 emissions, or indirect emissions, are the result of energy that’s consumed by operations.
• Scope 3 emissions:  These emissions come from a company’s value chain. Examples of Scope 3-generating activities include: the way goods are transported, corporate travel employees take, peripheral organizational activities and waste disposal. What consumers do with a product after they buy it can also count as scope 3 emissions—for example, the emissions associated with consumers driving the cars they bought from an automotive company.

Once a plan is in place, companies need to put it into action!

3. Deploy programs.
When businesses deploy their programs, they not only reduce emissions but also increase resource efficiency and innovation. Schneider can help companies replace their carbon with low-carbon sources, such as electrification, renewable energy and alternative fuel sources.

Lack of expertise, rather than lack of funds, usually accounts for a failure to properly utilize renewable energy. “Renewable energy used to be more expensive than fossil fueled energy, but now that’s not the case,” Osentowski said.
 
Businesses have many opportunities to decarbonize within their own operations. For example, organizations can choose to use electric vehicles, which are becoming more and more common. Today, Walgreens provides electric chargers in the parking lot. Consider all the parts of the business that are consuming energy, such as all the motors running operations, the variable frequency drives, lighting and HVAC.

“In 20 years, there is real possibility that Kentucky can  convert to a decarbonized, reliable grid,” Osentowski said. In the meantime, at the Lexington plant, “we switched out all of our lighting and all of our older electrical equipment.” Buying newer, more efficient equipment can reduce your consumption, thus reducing your carbon footprint, so it’s worth it to take the first step to update old motors, for example.

Schneider manages $30 billion in energy spend on behalf of clients every year. The company can provide end-to-end energy management solutions; competitive sourcing of energy resources; and energy tracking, supervising and billing.

However, some emissions can’t be reduced yet. Jet fuel, for example, can’t be replaced today with low-carbon fuel at scale, and many companies rely on air travel for their employees. Companies can combat those emissions by purchasing high quality, verifiable carbon off-sets. Carbon off-sets involve  a vast array of environmentally friendly projects, such as protecting the Amazon rainforests, or providing renewable electricity to communities in new economies. Schneider Electric’s Sustainability Business also provides carbon offset advisory services for these residual emissions.  

Businesses also need to pay attention to the emissions within their supply and value chains. These Scope 3 emissions are the largest source of emissions, so it’s important to reach out to suppliers and help them reduce emissions as part of the holistic program.

4. Sustain results.
“You’ve set your program in motion. Now you have to give consistent attention to be sure it’s performing as expected,” Osentowski said. Businesses will need to monitor, assess and even adjust the program to keep it running at peak performance.

As companies maintain their progress, they need to share with stakeholders the strides they are taking to reduce emissions and protect the environment. Reducing emissions can amplify your brand and help retain talent, too. In particular, the younger generation is concerned about the environment and tends to want to support and work for companies that are taking a stand to reduce emissions.

Schneider’s Lexington plant continues to monitor operations and set new benchmarks. It analyzes energy usage, bringing energy savings of 3.4% year-over-year, totaling in $6.6 million in savings since 2012. The plant has also consistently succeeded in reducing unplanned machine downtime by almost 6%. It has also maintained a 26% energy reduction and a 78% CO2 reduction with renewable energy credits.

Visit Schneider’s website to learn more about how companies can reduce their carbon footprint.