ESG or Environmental, Social, and Governance Programs are in the spotlight currently. There are several reasons for this but suffice it to say that these programs are both important to humanity and heavily favored by equity and debt capital alike. There is a solid appetite right now for investors to find and support organizations that exemplify ESG principles. Understanding the principals of ESG is relatively easy, the hard part can be in the practical application of these principles. This is especially true in industries like Oil and Gas where the parallels may be harder to see and draw. An innovative advanced automation system with strong data collection and aggregation capabilities (such as SitePro) will play a critical role in many ESG programs and initiatives.
The Compelling Relationship Between Automation and ESG
Control and measurement are two key requirements for any ESG program. As with any program, before controlling an outcome, you need to understand where you are today (benchmark) and then track progress against targets of where you want to be. The good news is that there is growing consensus on what metrics should be used to measure and track progress against ESG principles and goals. Standards groups like SASB (Sustainable Accounting Standards Board) have built frameworks of standards and metrics across many industries related to ESG. The trick becomes how to consistently collect accurate data to produce these metrics in such a way that the information can be quickly leveraged to control outcomes.
Enter advanced automation. The proper automation solution will not only provide irrefutable sensor-based data for ESG metrics, but it will also provide actionable real-time control points that can improve ESG outcomes (often without human intervention). An automation-based approach to ESG is also not specific to any one industry. It will work well in any industry that typically uses automation to improve normal business operations. Oil and Gas, Agriculture, Consumer Products, Municipal Infrastructure (like water and wastewater), and Manufacturing all can benefit greatly by leveraging systems that they may already have in place to drive major improvements in their ESG programs.
Within advanced automation products like SitePro, the concept of scaling controls based on real-time sensor information (a.k.a. PID looping) can have a huge impact on the conservation of natural resources. A simple example of this would be scaling back a pump based on real time volumetric sensor data thereby saving power and increasing the life of any related assets. In this example, you are saving electricity, producing less emissions, and delaying the manufacture and carbon footprint of replacement parts and equipment. The more advanced the solution, the greater the potential for outsized gains in your ESG programs. The practical boundaries are only limited by imagination.
The Practical Application of Advanced Automation for ESG
Moving from the conceptual to the practical, as companies wade through creating and implementing ESG programs a good place to start is with an existing framework. Metrics and goals need to be built against whatever framework you choose (or create). From there, you will need to create process and oversight to ensure that these items produce results. We chose to use the SASB standards for this discussion because they are gaining substantial adoption. The standards are documented by industry, however many of the principles and goals are consistent across all industries (e.g. water conservation, CO2 reduction).
What comes next is to map the value chain and business processes for your company to identify any associated ESG impacts. Once mapped, these impact points should be prioritized and reviewed for your ability to control their ESG impact. An example might be an Oil and Gas producer mapping out the natural gas flaring process as an ESG impact point. Further review might reveal that an onsite automation system could be augmented to minimize the flow of gas to the flare with the use of volumetric sensors elsewhere on site. As an advanced automation provider, we have helped many companies map out these types of impact reduction efforts (which usually come with the added benefit of saving money). We have also seen many different scenarios across many different industries where automation is applied with great effect.
There are countless ways to use sensors, controls, and automation to positively impact your ESG impact when physical assets are involved. Advanced automation can also provide more holistic positive impacts that are not immediately obvious. An example of this would be reducing your carbon footprint by providing remote facility monitoring and remote facility control solutions for your workforce. By reducing the number of on-site visits required, vehicle usage, traffic, and emissions are all reduced. The following table maps a few of the real-world scenarios we have seen in practice. This is not intended to be an all-inclusive list of SASB standards or related examples.
A well thought-out ESG strategy coupled with an advanced automation solution will produce large gains for companies that would like to advance their ESG programs. With ever greater emphasis on ESG throughout the world, the question is not whether we should create such a program, but rather, how can make the largest strides against our ESG impacts. The more obvious environmental and social gains will be accompanied by greater access to capital and improved shareholder returns for those who take this type of approach.