Green and Digital Transformation: PLM, ERP, Industry 4.0 toward Sustainable Innovation

Sustainability is on the agenda of every organization. Most OEMs and their supply chains have embraced the mantra of sustainability. This includes digital enterprise platform vendors which, like any other organization, are “committed to sustainability.” In a nutshell, this commitment refers to:

• Greener operations by reducing their own carbon footprints.
• Products and services that contribute to achieving sustainable development and meet transformation requirements across the 5Ps—people, planet, prosperity, peace, and partnership—per the 2030 agenda described by the United Nations and expanded from the 3Ps and “triple bottom-line” concept introduced by Elkington in 1994 and revisited in 2018.

Enterprise platform editors, a.k.a. PLM and ERP vendors, are being more and more open with their position on sustainability, both for themselves in building greener operations and in positioning their solutions to help manufacturers and the wider society in managing sustainability goals. This covers data traceability to sustainable requirements throughout the product lifecycle, meeting associated legislative requirements and tracking compliance and non-compliance implications.

In this article, I highlight how mainstream PLM and ERP editors communicate about their sustainability commitment on their website in context of the United Nations’ 17 goals toward sustainable development, and the recently announced European Green Digital Coalition.

Sustainability used to be referred to as “corporate social responsibility” (CSR). Some say that CSR looks backward—what has been done—while sustainability looks forward—what must be done. It is also referred to as environmental, social and governance (ESG) to measure a company’s effort toward positive impact on customers, employees, communities and the environment. Beyond the corporate jargon, the key is to understand and measure impacts or effects from businesses on society and the planet.

In a recent discussion with fellows from the PLM Green Alliance about the new book “How to Avoid a Climate Disaster,” I gathered some thoughts on how PLM, ERP and Industry 4.0 solutions can contribute to addressing climate change challenges. This included how digital platforms can enable:

• Data traceability across material, product quality, plant process, service efficiency lifecycle.
• Systematic sustainability lifecycle assessment throughout the product lifecycle and operations and in helping to predict how innovations are to comply with legislation and sustainability performance metrics.
• Data continuity to provide an enterprise architecture perspective on how information is to be authored and consumed, helping to create a more holistic decision-making ecosystem when it comes to assessing evolving requirements and policy compliance.

Additionally, Vila et al. (2015) suggested “a framework for sustainable product development that takes the whole product lifecycle into account,” from design and development to manufacturing and service. The framework promotes eco-design, green development and manufacturing, sustainable production and logistics, responsible use, and maintenance up to product social response and the importance of designing a product with the end of life in mind. Basically, how can R&D introduce upfront waste management disposal strategies and track this throughout the product lifecycle, from part reuse to reintegration, remanufacturing, etc.?

The United Nations 2030 agenda for sustainable development was introduced in 2015 with 17 sustainable development goals (SDGs) and associated 169 targets to foster global and local actions across all countries. These goals were ratified in 2016 during the Paris Climate Agreement, and many companies have already demonstrated that they have the skills, expertise and ingenuity to make this a reality, though scientists remind us that time for action is short.

Pretty much each goal refers to the use and/or development of new technologies in managing and sharing knowledge, developing innovative solutions, delivering services, and providing the means to reach these goals and targets.

Most, or perhaps all, PLM and ERP vendors now refer to these 17 goals in their commitment to sustainability. Different solutions will help with different specific goals: quality education (SDG4); affordable and clean energy (SDG7); decent work and economic growth (SDG8); industry, innovation and infrastructure (SDG9); sustainable cities and communities (SDG11); responsible consumption and production (SDG12); climate action (SDG13); and partnerships for the goals (SDG17).

A number of these goals are clearly embraced by PLM and ERP editors. Several of them have appointed sustainability officers to drive the associated implementation strategies and communicate about their commitment and sustainability initiatives on their respective website (for illustration only, not an exhaustive list):

• Autodesk refers to its commitment in “creating technology that improves energy and material productivity, (…) supporting innovators through grants, software donations and training, (…) and leading by example.”
• Dassault Systèmes refers to their commitment in helping OEMs and start-ups toward innovations that can “make a positive impact to the environment, society and economy” across three pillars: experience the change, harmonize the portfolio and collaborate with stakeholders.
• Oracle refers to their commitment to “building a more sustainable future, [as the] use of technology will play a critical role in meeting the ambitious United Nations Sustainable Development Goals.”
• PTC refers to their commitment to the environment and has kicked-off cross-functional initiates “to analyze [their] practices as they impact the environment to look for ways to make PTC more ‘green.’”
• Rockwell Automation refers to their commitment to “environmental stewardship within [their] own operations and across [their] entire value chain.”
• SAP refers to their commitment in “providing products and services that meet the sustainability challenges and opportunities of our customers (enabler) and leading by example in our own sustainable business operations and practices.”
• Siemens refers to their commitment in “shaping innovative solutions (…) for a better future, answers for more liveable and sustainable cities, (…) intelligent energy solutions, (…) connecting the real and the digital world to reduce energy consumption and increase competitiveness.”

There are clearly many committed’ organizations out there, pledging and reporting on their respective sustainability contributions, and communicating about it on corporate websites.

Commitment to a greener future is a commitment to the wider stakeholders—society and the planet—whereas private organizations also have a commitment to shareholders. Clearly, the two commitments must not conflict. Green targets need to be regulated with governmental and global legislation.

It would be interesting to hear about science-based targets that these organizations commit to. I found a short e-learning course by the SBTi interesting as it focuses on how to commit, develop, submit, communicate and disclose such targets. This is important to ensure that such initiatives translate into actions and do not stay in “commit” mode or fail to deliver the desired outcomes. The SBTi refers to a 24-month period to develop specific targets, each of which will have a carbon budget, emissions scenario and allocation approach across all scopes.

Sustainability is bigger than any one company or industry, and that’s part of the challenge. Getting involved and spending time and effort to explain what is being done, why it is important, how it can create value across the 5Ps, etc. is equally important to:

• Raise awareness and align on both innovative and disruptive solutions.
• Showcase what worked or works and try to replicate it elsewhere.
• Promote solutions, including digital platforms, contributing to sustainability and what value customers leverage from these.
• Increase collaboration across organizations and industries, link to SDG17.

In reference to SDG17, on Digital Day 2021, the European Commission launched the European Green Digital Coalition (EGDC) to support the green and digital transformation, which regroups 26 major European organizations—Accenture, Aruba, Atos, Beyond.pl, Bolt, Dassault Systèmes, Deutsche Telekom, Ericsson, IBM, Liberty Global, Microsoft, Nokia, NOS, Orange, OVHCloud, Proximus, SAP, Scaleway, Schneider Electric, SHIFT, TDC Group, Telefonica, A1 Telekom Austria, DNA, Telia Company and Vodafone—supported by 45 SMEs and start-ups.

Signatory companies of the EGDC commit to establishing science-based targets for reducing GHG emissions by 2030 and to become climate neutral or net-zero no later than 2040. They, therefore, commit to act in the following areas:

• “To invest in the development and deployment of greener digital technologies & services that are more energy and material efficient.”
• “Develop methods and tools to measure the net impact of green digital technologies on the environment and climate by joining forces with NGOs and relevant expert organizations.”
• “Co-create with representatives of other sectors recommendations and guidelines for the green digital transformation of these sectors that benefits environment, society and economy.”

The underlying motivation from this initiative is certainly two-fold. First, for the private sector to contribute to sustainable innovation. Second, to help the European Commission shape the relevant legislation and policies for “an appropriate environment-friendly use of digital networks, technologies and applications (green digital solutions).”

Progress reports are expected to be presented in 2022, so watch this space!

What are your thoughts?