While the UK government seems to be backsliding on its commitment to a low carbon economy, companies are embracing more sustainable practices, as Neil Tyler discovers.

While the UK government appears determined to redouble its efforts to exploit the North Sea’s remaining oil and gas reserves, it also claims that it wants to see billions of pounds being invested in renewables, carbon capture and nuclear power – but is enough being done to deliver a low-carbon economy?

The on-going crisis in Ukraine, and the fear of a wider war in the Middle East, means that the UK government’s recent decision to water down its commitment to net zero policies comes at a time when businesses are now more focussed on restructuring their supply chains and putting more emphasis on resilience rather than efficiency.

There are serious risks to the global economy, so energy and economic security are becoming increasingly important both at a national and corporate level.

The UK government has been criticised for not offering greater clarity over how it intends to deliver greener energy and the level of support it will provide businesses with who are looking to decarbonise production or build new more sustainable facilities.

While the EU and US are offering huge subsidies to encourage businesses to reduce their carbon emissions, here no one really knows what the UK government plans to do. So, there is certainly a need for long term certainty.

In its annual report the International Energy Agency (IEA) while welcoming the gathering pace of the transition from oil and gas to cleaner forms of energy, warned against countries looking to derail or slow progress by weakening environmental targets.

Electronics industry

Looking specifically at the electronics industry, its environmental performance has never been under greater scrutiny and whatever the government’s attitude is toward renewables and sustainability there is a sense of momentum within the sector when it comes to delivering on net zero, energy, resilience, and sustainability. For senior executives, however, there is a real challenge when it comes to navigating the increasing complexity that’s associated with delivering on climate goals.

Unlocking benefits from the transition to net zero depends on gathering the right data, so that companies can apply the right sustainable actions – consequently, carbon footprint assessments, a process of quantifying the total greenhouse gas emissions produced by an organisation and  encompassing all scopes of emissions, are becoming increasingly popular.

“As the energy grid is redesigned for renewable energy sources, there must also be a focus on driving energy efficiency in all applications. In the context of total emissions, for example, roughly 50% of global energy is consumed by industrials,” said Martin Cotter, Senior Vice President of Industrial and Multimarkets Group, at Analog Devices. “Investing in sustainability goals and driving profitability are not mutually exclusive.”

One of the key drivers of energy usage is the growing use of artificial intelligence (AI) and it is having a massive impact on energy consumption as new figures from Schneider Electric show, with AI accounting for over 4.3GW of power demand today. With a CAGR of between 26 and 36% that figure is expected to reach 13.5 to 20GW by 2028 - addressing the issues of power and performance have never been more important.

As the world becomes increasingly interconnected, there is a strong demand for more detailed information on a company in order to gauge its long-term viability, sustainability performance, and how it’s addressing its social responsibilities.

The US Securities and Exchange Commission (SEC) and the Europe Union’s Corporate Sustainability Reporting Directive (CSRD) have, for example, finalised initiatives that require mandatory carbon footprint disclosures and assurance on sustainability impacts to help investors and stakeholders make better decisions.

“Today, organisations are working hard to measure all of their direct and indirect carbon impacts for ESG reporting, and when you think about all of the different variables within any business, it gets very complex very quickly,” said Corey Dehmey, the Executive Director, of SERI, a specialist in Electronics Sustainability. “We realise that the carbon impact stemming from electronics may only represent a relatively small piece of the puzzle, but since nearly every business around the world uses some combination of computers, routers, data centres, POS (point of sale) systems, mobile phones and tablets, printers, and other electronic devices in their daily operations, you can see that an ESG Reporting Standard for electronics is an important part of the larger picture.”

In the US, Amazon which emits upwards of 71.54 million metric tonnes of carbon dioxide in a single year, has raised $2bn to launch a venture capital fund to invest in new climate technologies, and has pledged to achieve net zero by 2040. Many other large companies have also embarked on similar strategies to address net zero.

However, many smaller businesses are effectively flying in the dark.

A recent study by Enterprise Research Centre estimates that just 1% of SMEs in England are accessing net-zero business support and, according to the UK-based sustainability corporate consultants, SaveMoneyCutCarbon (SMCC), addressing SME’s carbon footprint is just as important as those giant corporations, like Amazon, in meeting net zero targets.

The Carbon Majors Report found that 87% of British SMEs are unaware of their carbon impact, while a further 77% have no plan in place to reduce their carbon footprint over the next three years. Whilst institutional schemes are in place to ease the process of investing into green businesses, minimal support is available for those looking to support SMEs.

According to the CEO of SMCC, Mark Sait there needs to be a collective change in behaviours if we are to embrace climate technologies and he has suggested the provision of an industry-first, end-to-end solution in the form of a six-point plan that addresses Scope 1-4 emissions created by a business. (Scope 1, 2, 3, 4 etc is a way of categorising the different kinds of carbon emissions a company creates in its own operations, and in its wider value chain.)

The approach suggested by Sait includes a Carbon Mentor call, whereby a business will be assigned a dedicated Carbon Mentor to understand the present situation within a business and their decarbonisation ambitions; a Baseline report, our of which is created a baseline carbon footprint and guidance on meeting reductions in emissions;  a Built Environment Audit; the creation of investment grade proposals  and tailored finance; the design, supply and installation of proven products and solutions and, finally, the development of staff engagement to improve carbon literacy.

To date that plan has helped SMCC deliver over 1000 projects to businesses across the UK, in turn saving 32 million kilowatt hours of energy, 772 million litres of water and 24 million tonnes of carbon reduction.

Sustainable production and reporting

Many larger businesses are working to deliver more sustainable and greener products, while improving their manufacturing processes to make them more sustainable.

One company, Dracula Technologies, a pioneer in energy harvesting, has recently unveiled a ‘Green MicroPower Factory’, which is a state-of-the-art, fully automated facility. The largest of its kind in Europe (measuring 2500 m²), the factory will produce up to 150 million cm² of organic photovoltaic (OPV) devices per year, using inkjet printing.

The new facility will cater to high-volume IoT customers from early 2024, while it also preparing to license its technology.

As the IoT market expands, the need for sustainable power sources is becoming more important so the launch of this new factory arrives at a critical point, as it coincides with European regulation guidelines to phase out non-rechargeable batteries in IoT devices.

“This new factory significantly expands our production capacity, ensuring we meet the growing demands of our customers by delivering customised solutions in high volume," said Brice Cruchon, CEO of Dracula Technologies. "It forms part of a greener and more connected future."

Earlier this year, Nexperia, the semiconductor company headquartered in the Netherlands, issued its first Sustainability Report, taking stock of the company’s environmental footprint and social responsibility.

By 2035, Nexperia said that it was aiming to have achieved carbon neutrality in both its direct operational emissions (Scope 1) and the indirect emissions associated with energy procurement for operations (Scope 2).

To achieve this the company is transitioning to 100% renewable electricity from guaranteed origin sources, which will power all of its operations and factories worldwide.

Nexperia’s comprehensive sustainability programme goes beyond just reducing Scope 1 and Scope 2 emissions and is ultimately striving to eliminate scope 3 emissions – which represent the indirect emissions produced along the company’s global value chain.

Here in the UK, the RS Group has announced that that four of its near-term climate reduction targets have now received validation from the SBTi, a global body that drives ambitious climate action in the private sector by enabling organisations to set science-based emissions reduction targets.

According to RS, it is looking to ensure that its distribution centres generate and use renewable electricity, is cutting the distance its products travel and switching to deliveries by road or sea rather than air. Working with its suppliers it is also going to offer its customers products that save energy and reduce the carbon footprint of their operations, through its new Better World product range.

The Group said that its ambition is, “to reach net zero in its direct operations by 2030 and across its value chain by 2050.”

RS has set four science-based targets covering its most important emissions areas - operations, logistics, products and suppliers, and these targets support various initiatives that will drive the organisation’s decarbonisation approach.

According to RS, the SBTi has validated its four near-term climate reduction targets as science based.

These include: reducing absolute Scope 1 and Scope 2 GHG emissions by 75%; reducing Scope 3 transport emissions by 25% per tonne of product sold; reducing Scope 3 emissions from the use of RS PRO products by 20% per tonne of products sold and committing that 67% of suppliers (by spend) covering purchased goods and services will set science-based targets by 2024/2025.

Commenting Andrea Barrett, VP of Social Responsibility and Sustainability at RS Group said, “The SBTi validation is an important landmark in our 2030 environmental, social and governance (ESG) action plan. We’re one of the first global providers of industrial product and service solutions to achieve this milestone, giving our stakeholders real confidence that we are committed to driving emissions reductions and progressing towards net zero.”

Conclusion

As the global implications of climate change become increasingly apparent, there is now a growing focus on the carbon footprint and environmental impact of electronics manufacturing.

Today the electronics industry is being scrutinised like never before whether in terms of environmental performance, the creation of electronic waste and with the amount of data sent and stored globally, because of the Internet of Things and the rapid growth and development of Artificial Intelligence, the amount of electricity being used to power servers and cooling systems – all of these are creating a significant carbon footprint.

While more and more companies are looking to expand, they are also now having to commit to improved levels of environmental, social and corporate governance (ESG). As a result, there are growing calls for the better monitoring and control of electronic manufacturers’ energy consumption.

For many manufacturers sustainability is a business imperative and an integral part of their corporate strategy, and businesses now need to prove to both customers and stakeholders that they are meeting environmental objectives.

Sustainability is no longer optional, rather it is now seen as being a business imperative.