IoT and Sustainability: A Natural Fit?

In a current context marked by rising energy prices, climate change crisis, and environmental concerns, the demand for sustainability has increased significantly for industry analysts and vendors in the IoT ecosystem. The development of AI-based energy management solutions can significantly improve energy efficiency and help achieve national and international targets for carbon emissions reduction. Investors are also increasingly taking into account sustainability and energy efficiency at the time of making decisions about their investments.

IoT data analytics offers multiple use cases in real estate, utilities, healthcare, industrial and in several other verticals to measure and improve sustainability metrics. This topic is currently gaining momentum, with growing interest in collecting data, and in analysing data for the purpose of continuous improvement in resource usage, production efficiency and developing best practices for a sustainable economy.

The demand for data on sustainability is rapidly growing. Increasingly, data related to organisational operations will be required to identify and track sustainability performance.

Companies consider these two issues when planning their strategies: What is our impact on climate and society? How can we comply with prescribed governmental best practices?   

Sustainability regulations are rapidly evolving in many parts of the world, and IoT data generated by companies will be used for better decision making.

  • The UK Climate Change Act sets the framework for reducing greenhouse emissions in the industrial sectors, which are required to report their emissions and demonstrate strong ESG performance.
  • The EU, through its Energy Efficiency Directive, encourages Member States to integrate IoT technologies as part of their efforts to downsize energy consumption for new and existing buildings.
  • The Corporate Sustainability Reporting Directive (CSRD) came into force on 5TH January 2023 and requires large EU companies and selected Small and Medium Enterprises to report on sustainability.
  • From 2024, European Sustainability Reporting Standards (ESRS) will require large companies to report water and energy usage, GHG emissions and air pollution.

For example, large buildings implementing IoT-managed HVAC systems with analytics capabilities can achieve energy consumption savings between 10% and 15%.

In the agricultural sector, a tomato plant has been able to track its goals and achieve a 20% water saving.

In manufacturing plants, the potential energy improvements are estimated at 20% of reduction in electricity usage on average, thus leading in a reduction of costs and C02 emissions. Sustainable development will continue to be an important component in organisations’ agendas.  Acting now helps to mitigate the effects of climate change, while enhancing organisational competitiveness in global markets. Today, IoT can play its part as technology plays a vital role in reducing energy consumption, lowering operational costs and increasing productivity. The sustainability journey is more than just reporting, is it thinking about ESG transformation to future-proof organisations.

Anthony Roy, Senior Analyst, Beecham Research