Process Performance Analysis

For some, "industrial sustainability" is a sombre oxymoron. To them, industrial activity and our reliance on it for desired standards of living are inherently unsustainable, leading to depletion of key resources , dramatic loss of bio-diversity, astronomical spending on defences against climate symptoms and - ever more rapidly - a "downward adjustment" of prosperity and population numbers.

 

However, the various definitions above do allow for a less defeatist viewpoint, albeit one that requires urgent action: industry should not inflict environmental damage any faster than our ecosystems are able to absorb the blows and repair themselves. And, with well-targeted R&D, we may even find ways to enhance our planet's self-healing mechanisms. Resource depletion is to some extent a separate issue from pollution, but both these key global threats are spanned by our two most basic needs: clean water and fossil fuel. Both are being used up at terrifying rates and both, as a result of their usage, contribute to damaging emissions: wastewater and greenhouse gases.

 

We've known most of this for almost half a century and yet, during the last two decades working at the highest consulting levels in the areas of industrial energy and water efficiency, we've seen disappointing adherence to the confines of 1- or 2-year payback criteria, a lack of desire to try novel approaches beyond the duration of government subsidies, and environmental attitudes driven by penalty avoidance. Furthermore, the brightest new recruits quickly find their way into the more profitable activities, where status and career perspectives are that much better. How many corporations put a stint at the wastewater treatment plant on their "trainee rotation" for promising new engineering staff? How often do higher management visit the remote and often smelly waste treatment facilities, as part of their weekly or monthly plant tour?

 

It is noteworthy that the IChemE's monthly TCE magazine of Sept. 2015 reported the "sustainability index" (Super-League Table score) of 18 large chemical companies. This table is compiled by investor advisor firm CDP and of the six environmental metrics used, four relate directly to energy and water usage. These types of ranking will surely become more prevalent and will gain importance among consumers, policy makers and investors. 

 

At this time, investors' demands - as well as the political election cycle - still cause much short-term thinking and insufficient attention to long-term consequences, especially where less "quantifiable" business aspects are concerned. Practices and policy plans that clearly make good sense from multiple perspectives are easily trampled by the pressures of profit margins, payback times and electoral swings. Have a look at this excellent article about "short-termism" on McKinsey's website. It mentions the "Risky Business Project", set up to quantify and publicise the economic impacts of climate change. Their report focussing on the South-Eastern U.S. "Come Heat and High Water" (Aug. 2015) caused quite a stir in that region.

 

Below are some interesting findings from a recent survey among industry experts and business leaders, as reported by the U.K.'s Carbon Trust:

• 70% of global business leaders surveyed are confident that action taken by consumers, governments, and investors will force the change to an environmentally sustainable future. [Note they expect others to apply the pressure]

• Climate change and resource scarcity will require businesses to adapt. 76% of executives see bottom-line risks from direct impacts of climate change, and 84% see business opportunity in an environmentally sustainable future. Half of them believe they may have to fundamentally change their products, services, or business models, if drivers for environmental sustainability become strong. [Emphasis added by us]

• Businesses are optimistic they can achieve the transition to a sustainable future, but there are signs of overconfidence. Of those that see the need to change, 81% are confident in their abilities to succeed. And amongst those that claim to be aware of how they compare with competitors on environmental sustainability, 99% believe they are at least average for their sector, with half seeing themselves as leaders. [Emphasis added by us]

 

That last point suggests inconsistency between the shared belief that business in general needs to take action and what individual businesses believe they need to do themselves. Too many do not accept their own need for change.

 

The Carbon Trust report referred to above ("Titans or Titanics? Understanding the business response to climate change and resource scarcity") is a well-written and highly informative summary. Find it here...  It also contains a suggested list of questions for starting the practical process of understanding issues that could impact company value.

 

In the end, only business can provide the productive capacity, technical capabilities and financial capacity to build a sustainable, low-carbon economy within the required timeframe - policy makers know this. Businesses that stay ahead of the "policy curve" will gain a competitive advantage.