Companies Solving Climate Challenges for Customers are Finding New Revenue Opportunities in Decarbonization Activities
Schneider Electric, Siemens, ABB, Bosch, Hitachi, General Electric, and Honeywell are driving climate action with new sustainability-focused products and business units
NEW YORK, May 23, 2023 /PRNewswire/ -- Sustainability is not just about compliance and added costs. Sustainability can enable long-term value creation for companies, and in many cases, sustainability efforts can help save costs on materials, electricity, and water consumption. Companies that are solving climate challenges for customers are enhancing and marketing current sustainability-focused solutions while also generating new business units and revenue opportunities from decarbonization activities. To better understand these initiatives, a new report by global technology intelligence firm ABI Research provides an in depth and unbiased examination of 10 of the world's largest industrial manufacturing conglomerates that are leading the way toward sustainable manufacturing operations while also reducing carbon emissions for their customers.
In the assessment, ABI Research establishes the sustainability positioning of each profiled company—leaders, mainstream, and followers— and provides company-wide best practices and external customer use cases for reducing carbon emissions, water use, and waste across multiple industries.
Sustainability Leaders: Schneider Electric, Siemens, ABB, and Bosch
Kim Johnson, Sustainable Technologies Principal Analyst explains, "Our assessment highlights that all the conglomerates in the index are building businesses to decarbonize society. However, several have communicated ambitions to be global climate change leaders. They are also doing very well financially, even in a tumultuous market environment." Schneider Electric is a sustainability and energy management-focused company, targeting carbon neutrality within its own operations by 2025. In 2022, with sustainability at the core of its business, Schneider Electric had all-time high revenues and net income, despite global inflationary pressures; their energy management unit is up 13% and industrial automation is up 10%. Siemens ranked in second place leading the index in industrial digital automation and green buildings and vehicles, while receiving solid scores for renewable energy use. In 2022, Siemens had record profits with their digital business up roughly 15%, and the industrial business up 17%. ABB was also a leading technology implementer for industrial automation and robotics with year-over-year revenue increases in 2022, while Bosch, which has already achieved carbon neutrality for Scope 1 and Scope 2 emissions (in 2020) had strong sales in 2021 and 2022 with climate response driving sustainable product development. In 2022, Bosch's corporate leadership stated that "climate action is driving the business forward" in mobility solutions, industrial automation, and building technology and appliances. Hitachi has also made significant investments in recent years for decarbonization, purchasing ABB's energy and power grids business for expanding renewable energy, producing electric vehicle (EV) systems and infrastructure, and improving its Lumada solutions for industrial digitalization.
For sustainability-focused efforts and revenue opportunities in the near term, ABI Research highlights increases in both industrial Information Technology (IT) investments, such as 5G connectivity, Industrial Internet of Things (IIoT) and edge compute, cloud infrastructure and mobile applications, and Operational Technology (OT) investments, including digital platforms to conserve energy, promote greener buildings, enhance automation, and improve factory efficiencies. For manufacturers, many of these IT and OT investments can help address the effects of inflation, skilled labor shortages, and supply chain constraints, while also addressing climate change by enabling the reduction of energy consumption, water use, and waste.
In the future, ABI Research expects these industrial conglomerates to invest even further in a multitude of newer, wider-ranging sustainable technologies, such as bio-based fuels, lower-carbon materials, lower Global Warming Potential (GWP) materials, power grid innovation, energy storage, and hydrogen power. For example, Honeywell already has more than 60% of product sales comprised of solutions that contribute to ESG-related outcomes, including bio-sourced materials, bio-derived plastics, hydrogen power, renewable power, energy storage, fleet electrification, sustainable aviation fuel, methane emissions monitoring and remediation, healthy buildings solutions, and more. Moreover, the assessment found that large renewable energy units from Siemens, Hitachi, and General Electric are all working toward thoughtful, globally coordinated mineral sourcing and production schedules needed to meet future demand for renewable technologies and the increased transmission lines required for distributed energy networks.
"In learning more about these conglomerates and conducting the analysis for the assessment, we expected to find typical carbon reduction activities occurring within the companies, such as sourcing renewable electricity, improving the energy efficiency of operations, and addressing unabated emissions with carbon offsets. What surprised us was the depth and breadth of new decarbonization business units, products, software solutions, and consulting services, each directed at solving climate-related issues for customers. These solutions ranged from national-level mobility and infrastructure projects to greener chemicals used in consumer goods. These companies are all investing in a lower carbon future," Johnson concludes.
These findings are from ABI Research's Sustainability Assessment: Large Industrial Solution Providers competitive ranking report. This report is part of the company's Sustainable Technologies research service, which includes research, data, and ABI Insights. Competitive Ranking reports offer comprehensive analysis of implementation strategies and innovation, coupled with market share analysis, to offer unparalleled insight into a company's performance and standing in comparison to its competitors.
About ABI Research
ABI Research is a global technology intelligence firm delivering actionable research and strategic guidance to technology leaders, innovators, and decision makers around the world. Our research focuses on the transformative technologies that are dramatically reshaping industries, economies, and workforces today.
For more information about ABI Research's services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.
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SOURCE ABI Research
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