Decarbonisation and efficiency key to addressing energy crisis


Governments and companies around the world should accelerate their sustainability action and step up investments into technologies that will help them reduce their carbon emissions and bolster their energy security and efficiency, according to Schneider Electric.

The call comes amid spiking energy prices, an energy supply crisis and fast accelerating climate change, which together pose major challenges for companies, economies and societies around the globe.

“Today’s climate and energy crises are an economic reality for ever-increasing numbers of people. We must act in our own best long-term, not short-term, interests,” said Jean-Pascal Tricoire, Schneider Electric’s chairman and CEO.  “We must not avoid the tough decisions. There can be no long-term prosperity without a complete energy transition. At Schneider, our approach is to ‘Digitize, Strategize, Decarbonize’ – businesses, governments and societies must do this now, to make good on the commitments they have made.”

An independent survey of more than 500 C-suite executives commissioned by Schneider last year  found that corporate sustainability commitments and investments are often hampered by the complexity of decarbonisation. On average, the financial commitment to sustainability and decarbonisation initiatives across the companies surveyed was less than two per cent of projected revenue over the next three years – despite the fact such investments are often efficient and cost-effective, with return on investment often under one to three years.

Respondents highlighted stakeholder alignment, budget, technology, skills and regulation as challenges to sustainability implementation. However, a majority noted that enhanced industrial automation and the upgrading of electrical infrastructure will form a key part of their sustainability plan for the next three years.

Renewable energy procurement is among the top initiatives pursued on the supply side, while electrification – a key demand-side measure – scores low among organisations’ sustainability priorities. Alongside electrification, delivering increased efficiency across existing infrastructure through digitisation and automation will be among the most important levers in the next decade, being the fastest and most capital-efficient means for many organizations to reduce emissions.

A further recent Schneider Electric report on the EU’s electrification potential found that focusing on sectors in which electrification is both feasible and attractive could raise electricity’s share of the energy mix from around 20 per cent to 50 per cent. In turn, the share of natural gas and oil would drop by around 50 per cent, contributing significantly to improved energy security.

Schneider Electric pointed out that today’s European energy crisis follows decades of secure, reliably available energy and relatively stable pricing. Many are experiencing for the first-time unpredictable energy supplies and unaffordable prices, demonstrating a failure both of long-term energy security preparedness, and of the implementation of decarbonisation plans. This in turn underscores the importance of reevaluating the entire energy equation, from the supply side (energy transition) to the demand side (energy efficiency).  

“Purpose and profits must align to become powerful forces in the fight against climate change,” said Tricoire. “We already have the technology to avert the energy and climate crises, and to deliver safe, reliable, and sustainable energy distribution and energy use. Our data-driven approach, spanning industrial automation, digitisation and the digital twin technology of the enterprise metaverse, combines to unlock a brighter, more sustainable and more prosperous future. The urgency for action has never been greater than it is now.”

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