Mar 9, 2021

AVEVA unites leaders to talk tech and sustainability

Procurement
SustainableSourcing
AVEVA
ESG
Laura V. Garcia
6 min
AVEVA unites leaders to talk tech and sustainability
Hosted by Robert Opp, chief digital officer at UNDP, AVEVA united industry leaders to talk tech, sustainability and the power of a connected workforce...

Hosted by Robert Opp, the chief digital officer at the United Nations Development Programme (UNDP), convened industry experts including leaders from the UNDP, Schneider Electric, PETRONAS and Verdantix to discuss how organisations are leveraging tech to drive sustainable practices, reduce carbon footprint and hit their green ambitions for a more sustainable future.

Although things had started to shift to a more sustainable mindset prior to the global pandemic, Opp says, “Since then, we've really seen a surge in these approaches that are being driven by the thriving digital innovation that we see. As people and governments have rushed to respond to cope with the terrible tragedy, they have also spurred a lot of innovation that is really being driven by digital technologies available to us.”

The talk was to focus on how companies can reimagine business models with an aim to not only achieve financial objectives but do so sustainably.

Opp shared his sentiments, “I think it's no exaggeration to say that today we're experiencing unprecedented and accelerating changes in our environment. These are being driven by unprecedented levels of inequality and the fact that a good portion of the world's population are still not able to access basic services like financial services. It's also in terms of the climate shocks that we see that over 60 million people are affected annually by extreme weather events. And if that weren't enough, we see the Covid-19 pandemic and the incredible tragedy that is endemic worldwide. At least 70 million people have joined the ranks of extreme poverty because of the Covid-19 pandemic, and now, as we see a vaccine on the horizon, the challenge for us all is how are we going to recover globally from this.”

As Opp explained, the power of the technology available at our disposal can have an impact on peoples lives. “ It's not only the individual technologies. It’s actually the convergence between them where we start to see incredibly powerful business models and opportunities emerge that have the potential to impact on people's lives.”

In 2015 the global community approved a list of 17 Sustainable Development Goals, “saying this is what humanity stands for in terms of our relationship to each other and our relationship to the planet. This is what drives us at the United Nations, and these goals provide a rallying call for the entire world.”

From the United Nations, “The Sustainable Development Goals are a universal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. The 17 Goals were adopted by all UN Member States in 2015, as part of the 2030 Agenda for Sustainable Development which set out a 15-year plan to achieve the goals.

However, progress is slow, further emphasising the need to get further faster with tech, and to bridge the digital divide. “Today, progress is being made in many places, but, overall, action to meet the goals is not yet advancing at the speed or scale required. 2020 needs to usher in a decade of ambitious action to deliver the goals by 2030.”

The Digital Divide

While the convergence of new technologies created opportunities to increase agility and create more resilient supply chains, as Opp pointed out, “If you're not on the right side of the digital divide, in other words, if you are unconnected or you do not have the ability to use your device or the skills to use it or you can’t afford to use it, you're going to be left out. So one of the big issues for us, that we see globally, is the need to bridge the digital divide.”

Opps says we can expect the current inequalities we see will continue to rise if we don’t make a concerted effort to reach out. “A fundamental part of the Sustainable Development Goals is about leaving no one behind. And so, we must close the digital divide, and we must use digital approaches that can include the entire population.”

He also noted that cross-sector engagement and the creation of ecosystems is critical to success. “At the UN, we are actively looking to recruit across sectors in the overall effort to push towards the Sustainable Development Goals, to assist our work in reaching the world's poorest people and make sure that we are leaving no one behind.”

Technology; Building a Sustainable Future

Craig Hayman, CEO of AVEVA, brought the conversation back around to leveraging technology to build a sustainable future. “I think this is a strategic choice, where you believe you can convince yourself that economic growth can support environmental sustainability. And as a business, as a CEO, you decide that you can serve shareholders, you can also serve employees, you can serve customers and you can also serve the communities in which we all work and live.”

Joining the United Nations Global Compact, Hayman is targeting several of the Sustainable Development Goals related to AVEVA’s work: clean water and sanitation, affordable and clean energy, industry, innovation and infrastructure, and sustainable industries and communities.

Speaking to the issues of data collection caused by disparate systems, Hayman says, “It is not realistic to say you can magically coalesce all into one system. However, advancements in things like AI and cloud capability will help to bring this data together and allow operators to understand the data, and predict what is going to happen. For the first time, we can now start to do that in the industrial sectors.”

Hayman further underscored AVEVA’s commitment to sustainability and social responsibility by announcing it has joined the Business for Social Responsibility (BSR,) a global non-profit that works with an estimated 250 like-minded member companies to support business leaders in their efforts on climate change and women’s empowerment.

As for how AVEVA is leveraging technology for sustainability, Hayman points to their work in Nava Raipur Atal Nagar, India, where AVEVA software is powering a smart city, a more resilient and transparent IoT enabled ecosystem with sustainability at its core. 

Before bringing the meeting to a close, Opps offered a final observation on “the breathtaking use of digital technologies” to power new efficiencies and the accelerated pace at which they are evolving before reminding us all of the imperativeness of action.

“The last observation I would make is around this impact of Covid-19. I don't want to minimise at all the tragedy of this global crisis that is unprecedented, at least in modern times.

“For the first time since 1990, we are seeing a reversal in human development, and that is something that we at the UNDP track every year in our human development index. This is the first time we've gone backwards. And yet, but there is an amazing opportunity here of disruption and innovation that I think we are witnessing.

“In the response to this crisis, what we're seeing is that digital comes forward and is really starting to have an important impact. If we look optimistically at the situation, we look forward to hoping that out of this disruption comes the opportunity not only to get back on track to where we were but potentially even to become stronger and follow a steeper trajectory toward the Sustainable Development Goals in 2030.

“We really believe that Covid-19 is a disruption that we have to take advantage of - to not just build back better but build back greener as well.”

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Jun 15, 2021

Germany Adopts Revolutionary Supply Chain Human Rights Laws

ESG
DaimlerAG
supplychain
Germany
4 min
Supply chain legislation makes German multinational corporations legally responsible for human rights and environmental abuses across global supply chains

While the title states that Germany’s newly adopted that targets human rights abuse across global supply chains is “revolutionary” ─ which it is ─, it certainly shouldn’t be. But nonetheless, today, on June 11th, 2021, the German Parliament has ushered in a long-awaited shift to mandatory company compliance rules. After months of negotiation, the German lawmakers finally pushed it over the finish line within the final days of the current legislative period. The bill will see German multinational corporations held legally responsible for any human rights or environmental abuses found across their global supply chains. 

“The German government has taken a critical step to ensure that companies operate responsibly,” said Juliane Kippenberg, associate director, children's rights division, at Human Rights Watch. “Respect for human rights in global supply chains is not something that should be optional.”

This news comes at a time when global corporations are already being pushed towards environmental, social and governance (ESG) compliance, with a massive drive to reduce Scope 1, 2, and 3 carbon emissions from their supply chain operations and a concerted effort to avoid suppliers and manufacturers that do not meet the standards that industry-leading companies are now expected to meet. 

Who will the new law affect?

With Germany’s new legislation, organisations that fail to meet the rules and regulations could be forced to pay fines potentially equivalent to 2% of their annual global turnover. However, it isn’t applicable to all.

According to Reuters, under the act, companies above a certain size will be forced to establish set due diligence procedures that prevent the abuses; from 2023, only companies with more than 3,000 employees in Germany will be affected. From 2024, the rules will expand to companies with more than 1,000 employees. 

Statistics from within the country suggest that the first stage of this regulation rollout will affect 900 companies, while the second stage will put 4,800 companies under the spotlight. The bill will also enable the government to temporarily exclude from public tenders companies that receive fines in excess of €175,000. 

“Incalculable risks arise for companies,” said Joachim Lang, general manager at the Federation of German Industry. A word of warning from a respected leader, at a time when industry lobby groups and wholesale businesses fear that the new law increases bureaucracy and suggest that price rises may be inbound. 

The Take of German Giants

After looking at the incoming legislation, Daimler AG, known more commonly as the automotive giant Mercedes-Benz, a company which, should there happen to be any ESG-compliance issues along its multinational supply chain, would pay a hefty fee, is welcoming of the push for change but hesitant about certain aspects of the bill. 

“Daimler's position is: The respect for human rights is a central aspect of our sustainable business strategy. We, therefore, welcome the progress made on the Supply Chain Act. Although the regulations are very ambitious, the proposed legislation has a sound approach overall. It is based on internationally recognised human rights and on international agreements. And it gives companies more legal certainty in an area that has so far only been partially regulated.

Supply chains are not "chains" but rather exceedingly complex networks: Daimler alone has over 60,000 direct suppliers - and many more sub-suppliers. For this reason, we also consider the proposed risk-based gradual model to be sensible. The responsibility of the companies lies primarily in their own business area and with their direct suppliers. Companies must then take action in the deeper supply chain if there are concrete indications of human rights violations. Daimler AG already does that today. 

Even though we support the proposed legislation in principle, we consider some aspects to be critical, e.g. the planned fines of up to 2% of the average annual turnover. Instead of threats of sanctions, we consider concrete measures, which companies must take in the event of deficits, to be more expedient. In addition, certain wordings are still vague and leave room for interpretation. Terms such as, e.g. "fair standard of living" should be phrased precisely in order to create legal certainty. Furthermore, documentation and reporting requirements should not lead to unnecessary bureaucracy and should be harmonised with existing rules. On the one hand, this does not help the people on the ground, and on the other hand, it puts a burden on the companies – and the implementation can pose substantial challenges for smaller companies in particular.”

This law is arguably one of the most important developments in the supply chain space so far this year. But it must be remembered that changes do not and will not happen at the push of a button and that democratic principles should be applied to the discussion prior to enshrining legislation into tablature. Environmental and human rights advocacy is a hike, not a brisk walk around the park ─ so, for German companies, it’s time to get their boots on the ground and start assessing their global, interconnected supply chain operations. And, hopefully, they’ll set a stellar example for the rest of us.

 

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