Companies across the globe are placing a much greater focus on sustainability and decarbonization in their manufacturing and production processes. This is true across the Asia-Pacific region.

In this initial podcast in our Asia-Pacific Sustainability & Decarbonization (S&D) series, I'm joined by ARC Advisory Group's General Manager for Southeast Asia, Bob Gill and Emerson's Director of Strategic Planning, Sustainability & Decarbonization for Asia Pacific, Pravin Raj to discuss the trends, practices, and technologies that companies are following to drive their strategies.

In this episode, we explore Emerson's Sustainability Framework, key factors driving S&D initiatives, types of transformations, emissions management strategies, early successes, lithium battery & hydrogen production trends, and some of the technologies to enable these initiatives.

Visit the Sustainability & Decarbonization section on Emerson.com and connect with Emerson's Asia-Pacific Sustainability & Decarbonization experts in your country.

Transcript

Jim: Hi everyone. This is Jim Cahill with another "Emerson Automation Experts" podcast. Globally, we are seeing an increasing emphasis on sustainability & decarbonization as countries, corporations and communities further define and implement their roadmaps to achieve net zero / carbon neutrality and operate in a more sustainable way. At the moment, this is nowhere more apparent than in Asia Pacific. Based on a Bloomberg NEF report, out of the $755B the world invested in low-carbon technologies (e.g. renewable energy, electrified transport, hydrogen, carbon capture, sustainable materials, etc) in 2021, 42% of that was invested in China, Japan, India and Korea alone, with China increasing its investment by 60% compared to the prior year.

We are launching an Asia Pacific Sustainability & Decarbonization Podcast Series to take a closer look at trends in the region and to discuss with experts on the technologies and applications that are key to enabling companies to achieve their decarbonization goals. Today, in the very first of this series of podcasts, I'm joined by Pravin Raj, Director of Strategic Planning, Sustainability & Decarbonization from Emerson Automation Solutions Asia Pacific and Bob Gill, General Manager for Southeast Asia for the ARC Advisory Group, to discuss the sustainability and decarbonization trends we are seeing in the Asia Pacific region and how Emerson is supporting our customers in this space.

Welcome Pravin and Bob!

Pravin: Hi Jim and Bob. Excited to be here.

Bob: Hi Jim and Pravin. Glad to be part of this discussion.

Jim: Pravin, it's great to have you here with us. Let's begin by asking you to share your background and path to your current role with our listeners.

Pravin: Thanks Jim. I am based in Singapore, and I manage both Strategic Planning and Sustainability & Decarbonization for Emerson Automation Solutions Asia Pacific. Prior to joining Emerson in Singapore, I was based in the United Kingdom and Azerbaijan, where I worked as an Offshore Installation Engineer and later as a Project Manager, responsible for leading the engineering, design, procurement, construction and commissioning of offshore oil & gas platforms.

Empowering a more environmentally responsible planet is ingrained in Emerson's purpose. I am inspired and passionate about how we help customers across some of the world's most essential industries make measurable sustainability progress, and am grateful that I can contribute towards that in my current role.

Jim: Thanks Pravin …And Bob, could you also give us a brief intro about yourself?

Bob: Yes, sure. I manage ARC Advisory Group's business operations and market research activities in Southeast Asia. ARC provides technology research, advisory and consulting services to industrial automation and software suppliers as well as to end-user companies in the manufacturing, infrastructure and energy sectors. And certainly, at ARC, we see very clearly that sustainability is becoming an absolutely key area of focus for the industrial end user companies in our ecosystem; as it also is for our technology supplier clients, who are developing and evolving products and solutions to help meet the sustainability needs of their clients – the end users.

Jim: Pravin, could you tell us a bit about Emerson's approach to Environmental Sustainability?

Pravin: Sure Jim. To help the world achieve a lower carbon future, Emerson has developed an Environmental Sustainability Framework, which can be summarized by 3 key elements – Greening OF, Greening BY and Greening WITH. On the Greening OF Emerson, we are working across our sites to reduce emissions, engaging with our energy providers to integrate renewable sources and embedding a sustainability focus in our management processes. On the Greening BY Emerson, we support and enable our customers decarbonization roadmaps with Emerson solutions, technologies and expertise. And finally, on the Greening WITH Emerson, we engage with external stakeholders to provide industry leadership, develop innovative solutions with universities and research centers as well as work to shape future policies with regulators.

Jim: Great! And in today's podcast, we will be focusing on Greening BY, how we at Emerson are enabling our customer's decarbonization efforts, especially in the Asia Pacific region.

Bob, we are seeing a lot of momentum in Asia from a Sustainability & Decarbonization perspective, could you share with us some of the key factors that are driving companies in Asia to invest in sustainability initiatives?

Bob: Yes, at ARC we conducted a survey of companies in the process industries, with the aim of getting a better understanding of the current state of sustainability activities and initiatives. Almost half of the of the 200+ survey respondents were from the Asia Pacific region.

We wanted to find out things like the drivers for initiating sustainability programs; where companies are focusing their efforts; what challenges they face, and which technologies are being used to advance sustainability initiatives.

So for example, when we asked about what's driving companies to initiate sustainability programs, the top two factors cited were:

#1 – To Increase Access to Capital

#2 – Satisfy Customer Buying Behavior

#1 – This 1st factor: Increase Access to Capital

Many large investment firms are increasingly sensitive to the sustainability performance of the industrial companies they invest in, and believe progress on sustainability is important for their long-term portfolio risk. Hence, companies believe successful sustainability programs will be favorable in terms of maintaining key investment relationships and increasing access to capital. This also indicates how critical and central sustainability is becoming for companies i.e. no longer just a nice to have, niche activity.

#2 – And the 2nd most cited factor: Satisfy Customer Buying Behavior

Customers are increasingly demanding products that are more "circular" in their ability to be reused and recycled rather than just ending up in landfill. Chemical companies, in particular, are having to prepare for this customer-driven trend by developing and manufacturing more sustainable materials.

Other factors cited:

#3 – Gain Competitive Advantage

#4 – Deliver Shareholder Value

#5 – Mitigate Regulatory Risk

#6 – Improve Access to New Markets

Jim: Interesting insights there, Bob. In fact, as a result of the factors you have mentioned, I understand we are seeing an increasing number of organizations here in Asia transform their business and invest more in sustainability programs and projects.

Pravin, I'd like to bring you in to comment. What types of transformation are we seeing with organizations in Asia with respect to this?

Pravin: Certainly Jim. We can broadly group the transformations we are seeing with organizations across Asia into 3 categories:

In the first category are organizations that are establishing sustainability roadmaps and investing in sustainability-related companies. This includes:

Acquiring/buying a stake into companies that own technologies in certain sustainability segments, like buying an existing electrolyzer company that produces hydrogen

Forming partnerships with companies in a particular segment of the value chain, like supplying fuel cells to EV manufacturers

In the second category are organizations that are making internal organizational changes to drive & coordinate sustainability initiatives such as:

Forming ESG or sustainability project departments to work on in-house projects

Refocusing business direction, such as EPCs changing names or setting up new business units to establish capability in the engineering & execution of sustainability projects

3.    In the third category are companies that are increasing their investments in R&D / technological developments in the sustainability space

This is a new space & a lot of new technology is required to drive efficiency and cost reduction. Mid to long term R&D efforts are critical, such as in the hydrogen segment, where driving down the cost of production, ammonia cracking efficiency and effective transportation are all crucial areas to work on

Jim: Really like how you categorized the transformations Pravin. You know, we are seeing these transformations take shape in different ways because organizations have different sustainability objectives. And just to name a few, this could be to improve their energy management, reduce their emissions or even adopt cleaner energy sources.

Bob, let's start off with Energy Management. What trends are you seeing across Asia?

And aside from the undeniable environmental benefits, what do companies stand to gain from managing their energy consumption better?