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    Sustainability strategies for industry

     

    April 16, 2023

     

    Connected LED lighting offers competitive advantages

    Every business seeks to attain a competitive advantage by using methods to increase value while minimizing risk. Companies sometimes even use risk to their advantage.

     

    Embedding sustainability goals within an industry or supply chain strategy broadens the definitions of value and risk. Value increases as consumers seek to purchase products from companies that embrace sustainable practices. A sustainability-centered strategy also gives companies a platform for managing climate-related risk. Increased value and risk management occur through efforts to decarbonize processes, reduce energy consumption, decrease waste, and extend product lifecycles. A range of competitive advantages become apparent by linking cost savings and earnings growth with sustainable approaches.

    Decarbonization solutions build competitive advantage

     

    Competitive advantages occur through processes and products that meet specific performance standards. According to a recent McKinsey study, nearly 70%of consumers responded that they would pay an additional 5% for a green product that meet the same performance standards as comparable non-green products. However, producing an innovative product that aligns with a sustainability-based corporate strategy may challenge many industries and manufacturers. This challenge involves balancing traditional business values with sustainability goals.

    Achieving this balance begins with integrating decarbonization strategies into core operations. Engineering and technology teams can work together to identify opportunities for reducing Scope 1 and 2 greenhouse gas emissions that impact industrial processes, manufacturing, and the supply chain. Scope 1—or direct--GHG emissions include emissions from fleet vehicles, fuel combustion in boilers, furnaces, and incinerators, manufacturing or processing of materials and chemicals, escaping emissions, and coal-fired power generation. Scope 2—or indirect—emissions cover emissions released or generated at another facility.
    Companies can reduce Scope 1 emissions and operating costs through maintenance, retrofitting, or upgrading to energy-efficient equipment. Regular maintenance and cleaning of condensers can improve heat transfer and deliver greater efficiency. Retrofitting circulating motors with variable frequency drives can reduce carbon emissions while reducing fuel and operations costs. New air-cooled condenser designs use less electricity while maximizing heat transfer for improved cooling performance. Sensors attached to condensers constantly monitor temperature, humidity, and other operating parameters to adjust performance and optimize energy use.
    For the steel industry, transitioning from traditional coal-fueled blast furnaces to electric-arc furnaces reduces carbon emissions. A recent study submitted for the Steel Manufacturers Association shows that electric-arc furnaces in the United States emitted 78% less carbon for crude steelmaking and 74% for hot-rolled steel production.

    Supply chain emissions add risk to business models

     

    The symbiotic relationship between companies and suppliers affects brand reputation, costs, and consumer confidence. Within that interdependence, supply chain emissions negatively impact business value and competitive advantages gained by companies that have either set or achieved sustainability goals. Studies indicate that—for many companies—supply chain emissions make up the majority of overall GHG emissions. As a result, leading companies have developed GHG reduction goals for suppliers. Food industry leaders, for example, have updated supplier codes of conduct to encourage adherence to conservation, decarbonization, and sustainability principles.

     

    For mid-size and small companies that make up the supply chain, meeting environmental goals affects profitability. To offset the impact on smaller companies, industry alliances and coalitions assist suppliers with establishing emissions targets, implementing renewable energy sources, and reducing energy consumption. As suppliers become energy efficient, industry leaders help suppliers mitigate climate-related risk, navigate regulatory changes, and respond to market volatility. Because achieving sustainability goals impacts purchasing decisions, companies and suppliers emphasize frequent communication between business staff. Information shared by suppliers assists with tracking progress towards implementing energy efficient processes and finding opportunities for new transportation and packaging methods.

    Industrial light automation providing energy efficiency for an Industrial factory.

    LED lighting for industry and the supply chain

     

    Facility managers can reduce Scope 1 emissions by retrofitting or redesigning lighting systems. Any size of industry or any part of the supply chain can increase energy efficiency and reduce operating costs through LED lighting. Replacing incandescent, high-pressure sodium (HPS), and fluorescent lighting fixtures with connected LED lighting offers the opportunity to reduce lighting-related energy costs by up to 80%. Long-term cost savings exist because of several factors:

     

     

    The versatility of LED lighting allows companies to either retrofit or redesign systems. If lighting patterns satisfy operational needs, businesses can provide high-quality illumination for work areas by retrofitting existing lighting fixtures and circuits with LED luminaires. Another option involves a full lighting system redesign to match changing needs on the manufacturing floor. Retrofits or redesigns that include connected LED lighting can automatically change lighting conditions according to available daylight, number of people in a room, and work schedules.

    Companies can manage the initial costs of lighting system retrofits or system redesigns through subscription Light-as-a-Service (LaaS) contracts and energy incentives. An LaaS subscription distributes the cost of installing an energy-efficient lighting system across a multiyear contract. Along with lowering the total cost of ownership, LaaS also includes service-level agreements (SLAs) that define vendor services during the project.

     

    The installation of energy-efficient lighting systems also qualifies companies for financial assistance through national programs.

    Human-centric lighting promotes health, well-being, productivity, and workplace safety

     

    When considering employee health and well-being, LED lighting can be engineered or controlled to cause less strain on the eyes. In addition, the intensity and color temperatures of LED lighting can be managed to improve visual acuity and lower the risk of workplace accidents. Dynamic LED lighting experiences have the potential to improve worker alertness, vitality, and productivity by matching light levels with circadian rhythms.

     

    Along with those capabilities, employees can personalize lighting conditions for comfort and productivity. Connected lighting systems also support the energy-efficiency requirements of facilities by sensing the number of individuals in a workspace and changing lighting, temperature, and humidity for the optimal working environment.

    Workplace environments built with health, well-being, security, and safety in mind attract skilled employees and pay additional dividends. Human-centric design that combines natural lighting, green spaces, and connected technologies demonstrates that employers value employees.

    Circularity in product design

     

    Successful green product design that meets performance standards pushes companies to move from a linear economic mindset to a strategy based on circularity. Rather than producing disposable products, manufacturers create durable, upgradable, reusable, repairable, and recyclable products that have longer operating lifecycles. Embedding circular design into product development involves:

     

    • Sourcing environment-friendly materials from the supply chain
    • Using recyclable packaging
    • Improving processes
    • Increasing product lifecycles and reuse
    • Managing waste

    Companies that put circular design principles into practice have a better opportunity for meeting sustainability goals and creating value. As an example, John Deere is advancing toward its 2030 sustainability objectives through the use of strategic objectives and initiatives based on circularity. These include:

     

    • Integrating circularity principles into the product development lifecycle
      • Incorporating recyclable content into products
      • Ensuring that 65% of materials found in products are sustainable
      • Increasing remanufacturing revenue
    • Reducing upstream and downstream CO2e emissions by 30%
      • Developing low/no carbon alternative power solutions
      • Investing in engine efficiency, hybridization, electrification, and renewable fuels

    To make progress toward its goals, John Deere has implemented projects to reduce Scope 1 and 2 emissions, and continues to collaborate with suppliers to measure, report, and mitigate emissions. During 2023, the equipment manufacturer achieved a 4% reduction in upstream and downstream CO2e emissions, a 15% reduction in operational CO2e emissions, and an 11% increase in waste reduction.

    Investments in connected technologies lead to industry and supply chain sustainability

     

    Each step towards a clear sustainability strategy attracts investors.

    Connected LED lighting supports strategic objectives and initiatives that align sustainability ambitions with operational processes.”

    Digital technologies provide the foundation for collecting, collating, analyzing, sharing, and acting on data pulled from a wide range of sources. Digital lighting is no different. Energy efficiencies and reductions in carbon emissions gained through connected LED lighting systems can support business initiatives aimed at mitigating climate change and risk.

     

    Improvements in workplace conditions enhance productivity and support financial goals. Connected lighting systems add to these benefits by emphasizing the health and well-being of employees. Responding to the human element and prioritizing individual needs encourages positive workplace cultures, fosters innovation, and helps build competitive advantage. These in turn support business growth and stakeholder engagement.

     

    To learn more about how connected LED technologies can assist your business with building a sustainability-based strategy, read Directions in Sustainability for Industry.

    About the author:

    Jonathan Weinert

    Jonathan Weinert

    IoT and connected lighting, Signify

    For further information, please contact:

    Signify Global Media relations - Professional Lighting
    Claire Phillips

    Tel: +44 7956 489081

    Email: claire.phillips@signify.com

    For commercial enquiries:

    About Signify

     

    Signify (Euronext: LIGHT) is the world leader in lighting for professionals, consumers and the Internet of Things. Our Philips products, Interact systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. In 2023, we had sales of EUR 6.7 billion, approximately 32,000 employees and a presence in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We have been in the Dow Jones Sustainability World Index since our IPO for seven consecutive years and have achieved the EcoVadis Platinum rating for four consecutive years, placing Signify in the top one percent of companies assessed. News from Signify can be found in the Newsroom, on X, LinkedIn and Instagram. Information for investors is located on the Investor Relations page.

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