Digitization is the new profitability engine

Thanks to continuous innovations in the IT sector, the sustained growth of digitalisation will not significantly increase greenhouse gas emissions, and will even open up new opportunities for exploiting energy efficiency.

Earlier this year, Schneider Electric was recognized as the world’s most sustainable company by Corporate Knights, and the company has consistently set increasingly ambitious sustainability goals globally over the past five years. At the beginning of the year, the company decided to further accelerate the implementation of its sustainability strategy in connection with climate protection. We asked Zsolt Veres, CEO of Schneider Electric Zrt., About sustainability, the consequences of the world’s accelerating digital transformation and possible solutions.

Computerworld: Increasing environmental risks are encouraging governments and companies to do more sustainable business. What opportunities are there to meet the requirements of IT innovation and the digital future, to make it sustainable and adaptable?

Zsolt Veres: It is not a question of whether there is climate change, as we sit up to our necks. The impact of informatics on this can be a very good example of the past year and a half. This is because the pandemic has significantly accelerated IT innovation and the development of digital solutions, which, although it has survived this changed period, has also highlighted the importance of managing our IT tools and the infrastructure needed to do so, as Internet use it already contributes 3-4% to greenhouse gas emissions. Although the energy demand of the production of devices and network elements shows a decreasing trend, the energy demand of the data center has jumped dramatically and there is no stopping. According to some studies, the use of Netflix and YouTube during peak hours in the U.S. accounts for up to 40-50% of Internet traffic, a good indication of the trend. All this is exacerbated by the fact that the electricity demand of the increasingly popular cryptocurrency mining is equal to that of a smaller African country.

As a leader, I suggest that there should be a concrete vision, a strategy that encompasses the specific sustainability goals of the company. It is important that these are ambitious but achievable goals that can be felt by governments, companies, citizens and workers.

A good example of this is that Schneider Electric treats sustainability much more broadly than usual, as it does not only and exclusively cover carbon emissions. Similarly, corporate sustainability strategies are worth defining more broadly. At our company, we have identified six main pillars to make for a more beautiful, sustainable world: creating a climate-positive worldview, managing resources efficiently, creating a trust-based environment, ie a trust-based approach in both ethical standards and operating models and environmental integration. . Going further, this includes ensuring equal opportunities for all and everyone, including environmental factors, as well as balancing generations and supporting local communities by providing opportunities that can create value well and effectively.

It is therefore worthwhile to develop a complex system in which redesign, implementation and monitoring of implementation, combined with an IT strategy, can be carried out within the framework of a digital innovation. After all, IT has always successfully wrinkled the way companies operate, think only of corporate governance systems, production or logistics solutions, and sustainability is also an area where well-designed IT tools can be used to effectively plan, develop and implement.

Zsolt Veres, CEO of Schneider Electric Zrt

CW: According to some forecasts, electricity demand related to the IT sector is expected to increase by almost 50% by 2030. As digital life continues to move forward, how can this be addressed so that, in addition to increasing flexibility, industries can move forward towards meeting sustainability goals?

Zsolt Veres: It is expedient to make the spread of digitalisation sustainable, as it will not be a limiting factor, but will become a profitability engine if it is managed with an appropriate IT strategy. Nevertheless, the size and energy demand of data centers is increasing dramatically, in size and quantity this is all a big challenge for the world, so one of the biggest questions is, what should the data center of the future look like?

Schneider Electric is an expert in the field of power generation and distribution, for which we acquired APC a few years ago, so our corporate strategy also includes data center solutions that go beyond power supply and refrigeration. The data center of the future, according to Schneider Electric, must meet four main points. The first is resilience. This means a high degree of reliability that includes data center availability, remote access, and management. Equally important is adaptability, which means a high degree of flexibility and adaptability to effectively handle situations where data center needs suddenly increase in large quantities – such as the home office introduced during a pandemic. Old-designed data centers, where they were not agile and adaptive to the issue, could not serve the needs even in the short term. The third point is efficiency, including IT efficiency, computing capacity, service capability, customization to meet customer needs, efficient processes, and digital services. And, of course, sustainability should not be missing from the list, i.e. what materials were used in its construction, how much carbon footprint the supply chain had, what ecological design, what energy production it uses, how renewable its sources are. Considering these four aspects, the data centers of the future will play a key role for businesses in adapting and resilient to uncertainties.

CW: What specific solutions can be used to support companies in the ICT sector?

Zsolt Veres: According to the International Energy Agency (IEA), about 30 percent of the world’s energy consumption goes to building and operating buildings, while the buildings around us are responsible for nearly 40 percent of greenhouse gas emissions. However, technologies are already available that can help change these values.

It is advisable to start with the hardware, as there are certain gases or other substances used in production that are known to be harmful, so it is advisable to replace or eliminate them. But really, software-based solutions are what can bring a lot to the kitchen, weapons that can be used in many areas. New digital technologies can also significantly improve the adaptability of real estate. We gained recent experience in building automation when we introduced an artificial intelligence-driven Schneider solution in a recently built domestic office center as part of a pilot project. The system collects data from building control solutions, monitors water, cooling, heating, lighting, i.e. everything that consumes energy, and then artificial intelligence (AI) points out individual faults and makes suggestions for correcting them. Shocking analyzes have been made of the complex system, confirming the importance of software solutions in this area as well, such as the EcoStruxure Platform.

In order to meet environmental and business requirements, buildings need to become hyper-efficient, so Schneider Electric’s Energy & Sustainability consulting business helps to provide solutions to optimize the energy consumption of existing buildings by offering proposals for energy distribution systems, as a with a well-sized system, our customers can achieve an average of 18-20 percent savings.

CW: The growing demands on digital consumption are creating a more complex hybrid environment that includes enterprise, cloud and peripheral data centers. What solutions are there to address the challenges of hybrid IT environments?

Zsolt Veres: Due to the digitalisation during the pandemic, the role of the cloud has visibly increased, and at the same time more and more companies are looking for edge solutions, which connect part of the computing capacity to the place of use, optimization, security and last but not least, there are privacy reasons. To keep the cloud, edge, and local area network working together properly, I recommend the EcoStruxure IT Advisor solution. This cloud-based device and planning software enables data center operators to reduce operating costs and plan uptime with easy access to accurate device data and impact simulation for optimized risk management, and analytics to facilitate capacity planning. It is important to note that a data center must always be provided, and sustainability and reliability are sometimes the opposite, and this can be balanced by IT innovation, which makes operational operations efficient.

CW: What is your opinion about the domestic situation?

Zsolt Veres: A glass can be half empty or half full. The key question is whether we have the right approach and whether progress is present. Although we are still far from perfect, the domestic situation is not bad at all. Proper regulation i environment, we have the will and the expectation, and fortunately the right tools and best practice solutions are available, in which Schneider Electric also plays a strategic role. The good news is that in the next EU cycle, serious funding will be available for sustainability-related developments. If the government, the regulatory system, market participants and the end-user side can work well together, there is a good chance that we will approach the targets, although the 55% reduction in greenhouse gases by 2030 set by the EU is no small challenge. . You have to move, I hope everyone feels the weight of this, you are encouraging everyone to take the necessary steps!