Hexagon’s Decarbonisation Confidence Index reveals why some companies are struggling to meet their ESG goals and how they can resolve common hindrances.
Companies often set ambitious goals to achieve decarbonisation, but how confident are they about reaching these targets?
With the aim of helping companies fulfill their sustainability commitments, Hexagon has developed a Decarbonisation Confidence Index that captures current market sentiments and highlights common challenges that often hinder decarbonisation efforts.
Through qualitative and quantitative research conducted in 2022, Hexagon engaged with 112 senior leaders across Australia and New Zealand, Indonesia, Japan, Malaysia, Singapore and South Korea.
“It’s a confidence pulse check that asks leaders questions relating to six key areas: regulation and legislation, partnerships, technologies, talent, capital and operational excellence,” says Camille Baumann, Chief Marketing Officer of Hexagon’s Asset Lifecycle Intelligence division in JPAC.
“Although there were challenges by some in meeting regulatory changes and accessing talent and technology, leaders were generally confident in their companies’ ability to reach their sustainability goals,” says Baumann.
“Confidence is the precursor to action. When there’s confidence in something, you see pragmatic movement in the right direction.”
The search for talent
As companies feel the pinch of the skills shortage, there’s increasing competition to secure top talent who have specialist skills to drive decarbonisation.
According to the Index, less than 29 per cent of respondents have confidence in existing talent to advance decarbonisation.
To address this issue, companies would benefit from tapping into each other’s knowledge base, cross training and considering resourcing beyond human capital i.e. looking at what capability gaps can be supplemented, complemented or filled by autonomous technology solutions, says Baumann.
“Hexagon recently brought our customers together in South Korea, Japan and Australia to facilitate open discussions about how they’ve made their processes more environmentally sustainable.
“There needs to be much greater exchange of information around cost sharing, building capability/talent and leveraging technology to drive sustainability.”
Pivoting with tech
Technology is key in helping companies progress on the path towards decarbonisation. Yet according to Hexagon’s Decarbonisation Confidence Index, 31 per cent of respondents have little or no confidence that their organisation would have access to new technologies.
“Most businesses said they can afford the technology and want to be more proactive in their digital transformation, but they don’t know what they don’t know – as in, what to leverage that will yield results,” says Baumann.
Hexagon’s technological solutions drive sustainability by improving the lifespan of assets; protecting people and their IP as well as improving productive performance of such assets. An example of this could be simply to digitise a single process using Hexagon’s Smart Completion Solution.
“Previously people had to visit multiple sites to obtain completions after they’d built something. Now they can use our smart completion solution which leads to fuel, cost and time savings,” says Baumann.
Using Hexagon’s automated system, Origin Energy has been able to reduce the time it takes for completions from five hours to two minutes.
Hexagon’s digital reality technologies are also being implemented across H2U’s (The Hydrogen Utility) planned pipeline of high-quality industrial green hydrogen infrastructure initiatives in Australia and New Zealand, leading to new industrial energy assets that drive economic growth and long-term sustainable impact.
“These solutions help customers drive better productivity and performance, and enable a longer lifespan of the assets they build and manage. That’s sustainability in action.”
Adhering to legal changes
Although 92 per cent of respondents thought they would see new regulatory or legislative requirements over the next 12 months, only 14.2 per cent of respondents had little or no confidence that they would be able to meet set expectations of the future.
Legislative changes can make it difficult for companies to plan their next steps towards decarbonisation.
“It takes time to pivot and transform, so businesses want to know what legislation will be in 5, 10, 15 years so they can move towards compliance. State and federal governments also need to work towards alignment so that a lack of clarity doesn’t slow industries down,” says Baumann.
For this reason, although companies need to ensure they’re compliant, regulatory considerations shouldn’t be their only source of motivation.
“Regulatory considerations should just be the hygiene factor,” says Baumann. “Companies really need to think about their intent. Many businesses are now seeing the value in multilateral efforts where they’re coming together with competitors and government to drive a sustainability agenda.”
Hexagon’s Confidence Index is a leading indicator to action. Download the Index today to advance your sustainability efforts.