The Role of Engineering in ESG: Engineering the Future￼
While some of us must begrudgingly admit we have been working on ESG (Environmental Social and Governance) in all its forms for longer than we want to admit, until recently seeing any real progress has been far too slow. With climate change concerns now taking centre stage, by most accounts ESG has finally become “mainstream”. Ultimately, it will become just another term for doing good business.
What has always driven me is having maximum impact. In practice this motivation translates into how to make the best use of engineering principles, knowledge and practices towards building a safe and prosperous future while accelerating the transition to alternative sources of energy. The concept, principles and ‘protocols’ of ESG are essential tools I use in support of that motivation.
To a certain extent ESG has always involved engineering , however having recently joined Norda Stelo I am putting the role of engineering in advancing ESG to the test. Most of my own career has not been working at an engineering firm, however it has always involved working with engineers. This included helping develop new tools for integrating ESG into decision making for capital projects, corporate sustainability strategies, innovation strategies (as a back door to advancing ESG), and clean-tech development.
To be clear, an engineering firm’s role in ESG will more often involve the “E” however it can also plays a vital role in the “S” of ESG through delivering stakeholder health and safety as well as the benefits of community projects. Arguably an engineering firm has less focus on the “G” when it comes to such things as hiring policies, board governance, diversity, ethics, or procurement decisions. However, it certainly can indirectly support improved governance through playing the critical role of an independent, trusted, 3rd party to it clients but also investors and communities by ensuring information and data is credible.
Being The Change …
Due to their nature and goals many engineering projects will typically deliver some form of ESG-based benefits to companies, communities, or society at large. Whether a water treatment plant, a house, a playground, air pollution control system, or clean technology, environmental and social benefits can be realized. The possibilities for benefits are many – such as improving the quality of air or water, making structures safer, or designing and creating new community spaces that enrich lives.
Today there is acute urgency for dramatic greenhouse gas reductions, and growing a more circular economy. In response to these critical pressures, we are beginning to see “mass pilot deployment” globally of GHG, energy, and novel process technologies being designed and built by engineering firms. Thus, in many respects, engineering is inherently interwoven with ESG as the means of delivering the change required.
However, I think the role can be much more.
To genuinely support the goals of our clients, an engineering firm needs to have its own house in order. This means it should have its own GHG and broader ESG strategy and associated goals, including critical social-responsibility goals such as diversity in hiring and ethical sourcing. This is now considered “table stakes” – you can see many firms in the process of transitioning to being more purpose-driven while publicly stating their ESG-related commitments, goals, and achievements. The purpose and commitments include goals related to the impact the firm wants to make through the services it provides. Indeed, increasingly to be competitive in today’s complex conditions an organization must demonstrate the broader ESG impact it has in delivering its products or service. This is a requirement of being a B Corp, a commitment and designation Norda has recently accepted.
…Vs. Leading The Change
Finally market forces and government policies are driving much larger investments into carbon reduction – and removal – technologies. Notwithstanding this shift, we are only at the beginning of the level of change required to address the climate crisis. Given the challenges we face across all aspects of GHG, and ensuring we avoid the traps of “carbon tunnel vision”, the critical strategic response is to accelerate the tangible realization of ESG benefits and connect them more clearly to generating value (reduced costs, less emissions, increased carbon capture, innovation, etc.).
When you consider an engineering firm’s ability to influence decisions and design, particularly for firms like Norda Stelo where we have long-term partnerships and are often situated at our clients’ sites, the opportunity for mutual benefit is tremendous. For existing operations, where all aspects of often-aging assets and the associated challenges are well known, being on the front lines means having the ability to proactively identify ideas and opportunities that might have otherwise unrealized benefits, or at least sooner. Whether it is static infrastructure like roads, bridges, buildings, wharfs, or tanks; or process equipment such as engines, turbines, boilers, mills, kilns, and mobile fleets, engineering firms can seek and drive new efficiencies, present new technology solutions for more rapid integration or avoid upsets and associated impacts.
Avoiding early replacement of aging assets while increasing their levels of performance can of course be a win-win. At Norda, through the application of customizable digital solutions, we focus on predictive maintenance and asset reliability to extend the performance and life of assets. This, integrated with the process and platform for digitally connecting assets within a facility (IoT) and incorporating all environmental (and social, qualitatively, to the extent possible) data quickly shifts the ESG playing field.
Engineering firms ultimately are well positioned to think more strategically on behalf of their client and communities in which they affect. This means looking at the broader picture, thinking in terms of systems, and translating that into specific and effectively scoped initiatives. Some ideas on how we can do this might be:
1-Catalyzing ESG improvements across the supply chain
Many firms work across a supply chain and are well positioned to identify new technologies, practices or approaches for which the benefits can cascade. For example, metallurgical coal mining and steel both have significant GHG challenges and both could apply similar technologies. Or helping enable battery recycling as a strategic opportunity for leaders in mining and the automobile sector and help close the loop or identify new methods to extract critical minerals. Often those apart of the same supply chain may have similar challenges that require skillsets and perspectives for which an engineering firm can help bring together.
2-Community development involvingmultiple stakeholders
One common feature of the energy transition is that much of the technological solutions will be more locally supplied. This could be associated with hydrogen, carbon capture, batteries, or biomass. All these can have significant local benefits, however an astute engineering company can accelerate these. Take the Bioeconomy Development Zone Initiative which is actively accelerating bio-based investment in 100 bio zones across Canada. Engineering firms can proactively seek opportunities to connect the facilities in which we work to potential bio-energy solutions and work to facilitate local supply chains and new technology deployment to generate benefits across the board
Working in a particular region for multiple clients across sectors puts engineering companies in a unique position to identify where one client’s s outputs might be the inputs for another. This could reduce waste, improve local air quality, and generate new business opportunities with associated jobs.
ESG and climate challenges are acute and pressing. Collaboration between those with common challenges can hasten deployment of solutions through shared learnings. Engineers working with different clients, whether within or across sectors, can facilitate these learnings while sharing their own lessons-learned. In some cases, these learnings can even be made public when kept to a high level, which can be incredibly valuable to spreading pertinent knowledge into professional communities and industries.
The challenges of today and tomorrow will only be solved with strong leadership. Proactively supporting the development of leaders both within our own companies but also our clients and our clients suppliers will have massive benefits. Focussing on building leadership skills and capacity that are unique to a transition to a low carbon economy can be something engineering firms can help facilitate with a focus on engineers. This can be through mentorship and network development. With an ever-increasing amount of engineers retiring and the need for more diversity in engineering, how can we be a catalyst to accelerate the development of these skills? There are likely a myriad of ways, including working alongside existing organizations focussed in this space.
As employees from engineering companies often work at the facilities of its clients, they are therefore apart of the same community. This gives them a unique opportunity to engage the community and support indigenous and general community relations related to the piloting and deployment of new technologies and practices.
Many of the ESG challenges we face are a race against time where old ways of operating are no longer sufficient. New mindsets and modes are required, which means engineering firms need to break out of longstanding traditional approaches and bring the right mix of creativity and boldness to bear. Norda Stelo brought me aboard to do just this. They realize, as do other progressive companies, that today engineering firms are uniquely positioned to accelerate ESG-related solutions by thinking differently, consistently generating new ideas, and then leading – and engineering – their implementation.