Why It's Time for Industry to Listen to the IPCC

We’re merely ½ a degree Celsius away from uncontrollable climate change. So it's time that industry started making material changes.

Human action has already warmed the planet by 1 °C above pre-industrial levels. If we get to 1.5 °C, the environmental devastation caused by this climate change will be irreversible. Not to mention the immeasurable human cost.

The Intergovernmental Panel on Climate Change (IPCC), a body of the United Nations, recently released the Global Warming of 1.5 °C special report.

The IPCC’s report lays out the consequences of the entire planet warming to an average of around 1.5° C above pre-industrial levels.

½ a Degree Away

At 1.5 °C above pre-industrial levels, climate change will be global, long-lasting, extreme, and wildly variant.

North America, Europe, the Mediterranean, Asia, North Africa, and Southern Africa will likely experience widespread extreme and exceptional heatwaves.

Alaska, the Canadian coasts, Greenland, Iceland, Northern Europe, and Northern and Eastern Asia will likely experience heavy precipitation events. Tropical cyclones in these areas will be fewer in number, but far more intense.

Droughts and water stress will take hold across the Mediterranean and Southern Africa.

Food production, water, and energy systems will be heavily stressed, with some likely unable to adapt.

As usual, the poor, disenfranchised, and economically disadvantaged will be disproportionately impacted.

The Mid-Century Deadline

But all’s not lost… yet. Keeping warming below 1.5 °C (or hopefully at least below an even more dire 2.0° of warming) should stave off the worst effects of climate change.

But with human-driven warming still powering on at 0.2 °C per year, there isn’t much time. IPCC calculations have Earth on track to hit 1.5° warming somewhere between 2030 and 2052.

To prevent this, the IPCC states that we need to reach and maintain a state of net-zero emissions. Now.

All parties must be on board: international bodies, governments, institutions, non-profits, communities, and private organisations.

Industry Contribution to Global Warming

Industrial organisations have contributed to the warming. And likewise, Industry 4.0 advocates can and should contribute to mitigating the damage already caused.

The IPCC lays out the most effective steps. It’s by increasing energy and process efficiency and upscaling investments in low-carbon energy technologies and practices.

There are three areas where improvements can readily be made. These are in addressing machine inefficiencies (improving asset health), correcting erroneous maintenance strategies, and making real CSR investments.

Fortunately for the industrial sector, these steps align with proper business stewardship. Sustainability measures are practical steps that will conjointly strengthen the business sector overall.

Address Machine Inefficiencies

Industry’s carbon emissions must be lowered. It may be true that there are a few super-polluters, with 20 companies being responsible for one-third of all emissions. But all corporate entities will need to participate to reach net zero.

Australia’s production-based carbon dioxide emissions peaked in 2018 and have not seen a meaningful fall. Even COVID-19’s global drop proved temporary without any formalised procedural changes.

Relying on gradual industry progress or lucky flukes won’t hold up. A concerted effort needs to be made across the board. Simply improving machine efficiencies is a highly accessible and effective step.

Asset condition monitoring is typically used to monitor equipment for potential breakdowns. But this can be applied purely to improve efficiencies.

Asset health can be optimised through digitalisation with AI capabilities. When machine learning is applied to asset optimisation, it ramps up profits and performance. Asset health maintenance strategies should be periodically evaluated. A comprehensive asset fitness strategy includes preventive, predictive, and prescriptive maintenance.

Operating in reaction to problems inevitably results in poor asset health with shorter lifecycles. In contrast, a proactive asset fitness strategy can easily eliminate up to 70% of breakdowns, cut downtime by 50%, lower capital investment costs by 5%, and even reduce overall maintenance costs by 25%.

There’s no sacrificing business needs here. Efficiency and profitability always go hand in hand. Taking steps to improve machine performance, asset fitness, and overall conditions is fully aligned with organisational best interests.

Runto Profit, over Run to Fail

Run to failure is, in general, not an appropriate maintenance strategy. The reticence to spend on proactive maintenance and opt instead for corrective repairs is counterproductive.

Run to fail is expensive repair-wise, lowers productivity, and reduces asset lifetimes. As covered above, assets in poor health are not only inefficient, but they also generate far more emissions than need be.

Asset health management must become a core business focus with a total productive maintenance (TPM) mindset that orients all employees and activities towards it.

Instead of this erroneous model, 'run toprofit' operations should be implemented across all interested Industry 4.0 participants.

And the guiding framework? Financially accountable predictive maintenance. Run to profit can surpass any reluctance to implement predictive maintenance by tying it to operational costs and business revenue.

The first step is calculating the true cost of run to failure operations. This should evaluate the impact of suboptimal operational performance versus the value of reliable, stable, and predictable operations.

Shifting to a run to profit model that prioritises asset fitness, generally requires significant investment. Evaluating these costs in the context of the company’s overall performance health and long-term welfare can help persuade reluctant persons.

Predictive analytics is the most precise way to identify operational cost centers and potential value creators. Scanning key business metrics will reveal which areas will have maximum immediate impact. Addressing these first will result in a run to profit shift that lives up to its name.

Take CSR Seriously

Industry too often pays lip service to CSR. Carbon offsets, renewable energy, and other sustainable strategies don’t receive due investments.

According to the IPCC, corporate sustainability investments should be scaled up by a factor of 6. The IPCC lists several sustainable strategies worthy of Industry 4.0 funding. These are low-carbon technologies, energy efficiency, carbon capture and storage options, fuel switching, and process efficiency.

This array gives Industry 4.0 a variety of pathways to meeting climate change sustainability goals.

A new development boosting the journey to net-zero is carbon as a valuable market commodity. Carbon investments and credit markets are taking off.

The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) published a blueprint for global emissions trading. This London-based initiative carries some weight. It’s led by former Bank of England Governor, Mark Carney, and sponsored by the Institute of International Finance (IIF).

Private companies may now find it easier to participate in carbon-based sustainability strategies, by participating in these markets.

The most likely path to significant energy and process efficiency gains is through the digitalisation process of Industry 4.0.

The Net-Zero Industry

Reaching net-zero emissions with enough time to prevent irreversible climate change will take synchronised international efforts. The IPCC recommendations show key steps that need to be taken.

For the private sector, the developing Industry 4.0 brings the opportunity to reconsider old norms and practices.

True sustainability doesn’t come at the cost of profit or business growth. Thinking beyond immediate interests to consider even the near future will inevitably result in a stronger, more resilient business.

Operational practices like total productive maintenance (TPM), asset health management, and run-to-profit incontrovertibly verify this.

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