Key Considerations for Industrial Facility Decarbonization

In recent years, the importance of decarbonization has gained significant traction across various industries. ​

As the world grapples with the challenges of climate change, industrial facilities are under increasing pressure to reduce their carbon footprint. Manufacturers and facility managers are recognizing that failing to make the transition to low carbon operations can have dire consequences.

TEAM Group has recently signed the new ESG Supplier Pledge with General Motors, a leading manufacturer in the automotive industry, demonstrating its commitment to sustainability and ethical business practices. The Environmental, Social, and Governance (ESG) Partnership Pledge outlines significant commitments, including human rights protections and fair operating practices.

“Our alignment with General Motors through the ESG Supplier Pledge reinforces TEAM’s dedication to creating a sustainable and socially responsible business environment,” said Clint Griffin, the CEO of TEAM Group.

“We are proud to join this initiative and commit to working towards net zero emissions, social responsibility, and sustainable procurement across our supply chains and communities.”

Tean Highlights

1. Carbon Neutrality: TEAM is dedicated on its journey to achieving carbon neutrality by implementing measures to reduce emissions and promote sustainable energy use. This includes four major categories: waste, water, energy and fleet. At TEAM, we believe in optimizing waste management to minimize environmental impact, responsible water usage to conserve this vital resource, enhancing energy efficiency across all operations, and improving the sustainability of our fleet by adopting eco-friendly transportation options and technologies.

2. Social Responsibility: The company upholds the highest standards of social responsibility, focusing on zero tolerance discrimination, human rights and dignity protections and fair labor practices throughout its operations.

3. Equitable Sustainable Procurement: TEAM is committed to sustainable procurement, ensuring that its supply chains are environmentally friendly and socially responsible for everyone.

In embracing these ESG principles, TEAM, as a manufacturing support services partner, is setting a healthy standard for ethical and sustainable business practices in the facilities services sector. This partnership with General Motors and other clients marks a significant step forward in the company’s journey towards a more sustainable future.

For more information about TEAM Group and its commitment to ESG principles, visit www.team-group.com

Read our full ESG Report: www.team-group.com/sustainability

Why Decarbonization Matters

Climate change poses significant economic risks, including decreasing resource availability, rising raw material prices, and increasing costs for doing business in regions prone to severe weather or natural disasters.
In 2022, the industrial sector accounted for 30% of total US greenhouse gas (GHG) emissions, including indirect emissions from electricity end-use. Carbon dioxide (CO2) constitutes over 90% of both direct and indirect GHG emissions from industrial processes.

Between 1990 and 2014, GHG emissions from the industrial sector increased by 69%. However, since 1990, U.S. greenhouse gas emissions have decreased by approximately 3%Global efforts have spurred innovation in decarbonization technologies, particularly in the power, buildings, and transport sectors.

 

Decarbonization, the process of reducing or eliminating carbon dioxide emissions, is crucial for industrial facilities for several reasons:

1. Environmental Impact: Industrial facilities are among the largest contributors to greenhouse gas emissions. By decarbonizing their operations, these facilities can significantly reduce their environmental impact and help mitigate climate change.

2. Regulatory Compliance: Governments around the world are implementing stricter regulations to curb carbon emissions. Industrial facilities that fail to decarbonize risk facing fines, penalties, and other regulatory sanctions.

3. Cost Savings: Decarbonization can lead to significant cost savings for industrial facilities. By improving energy efficiency and transitioning to renewable energy sources, facilities can reduce their energy bills and operating costs.

4. Reputation Management: Consumers, investors, and other stakeholders are increasingly prioritizing sustainability and environmental responsibility. Industrial facilities that fail to decarbonize risk damaging their reputation and losing the trust of their stakeholders.

5. Competitive Advantage: Decarbonization can give manufacturing and industrial facilities a competitive advantage in the marketplace. By demonstrating a commitment to sustainability, facilities can attract environmentally conscious consumers and investors.

Key Considerations for Decarbonization

The transition to a clean energy economy presents a significant economic opportunity globally. However, businesses that fail to adapt to this transition risk significant loss in value over time. Clean technologies such as hydrogen production, energy storage, and carbon capture are just a few examples of the options available to businesses and facilities looking to transition to zero emissions.

According to KPMG:

  • 63% of Canadian manufacturers struggle to determine how to reduce their carbon footprint.
  • 62% of Canadian manufacturers believe their business isn’t prepared to transition to achieve net-zero emissions.

 

Industrial facility decarbonization is a complex and challenging process that requires careful planning and implementation. Here are some key considerations for manufacturers and facility managers:

1. Assessment and Planning: The first step in the decarbonization process is to conduct a comprehensive assessment of the facility’s current carbon emissions and energy use. This assessment will help identify areas for improvement and develop a decarbonization plan.

2. Energy Efficiency: Improving energy efficiency is one of the most effective ways to reduce carbon emissions. Industrial facilities can achieve significant energy savings by upgrading equipment, optimizing processes, and implementing energy management systems. Although energy efficiency alone may not completely solve the challenge of high emissions in all sectors, widespread improvements in energy efficiency throughout the industry can have a significant impact.
Additionally, most energy efficiency enhancements lead to direct cost savings for businesses, making it an ideal initial step for companies embarking on the path to net zero emissions.

3. Electrification: Electrification involves replacing fossil fuel-dependent technology and equipment with electricity-driven alternatives. While electrification can help reduce emissions, it’s essential to ensure that the electricity used comes from renewable sources to maximize the environmental benefits. Companies are increasingly exploring renewable energy sources to power their industrial processes. For example, Tesla’s Gigafactory in Nevada uses rooftop solar panels to power the plant.

Hybrid setups, combining renewable energy sources with conventional fossil fuels, can also help make electrification a more compelling option.

4. Renewable Energy: Transitioning to renewable energy sources is essential for decarbonizing industrial facilities. Solar, wind, and hydroelectric power are all viable options for reducing carbon emissions and increasing energy sustainability.

5. Carbon Capture and Storage (CCS): CCS technology allows industrial facilities to capture carbon dioxide emissions and store them underground, preventing them from entering the atmosphere. While CCS can be expensive to implement, it is an effective way to reduce carbon emissions from industrial processes.

6. Supply Chain Management: Industrial facilities should work closely with their suppliers to identify opportunities for reducing carbon emissions throughout the supply chain. This may involve sourcing materials from sustainable suppliers or implementing transportation efficiency measures.

 

The Consequences of Inaction

Manufacturers and industrial facilities that fail to make the transition to low carbon operations risk facing a variety of negative consequences in the long term. These consequences can include:

  • Higher Cost of Financing: Investors are increasingly prioritizing sustainability, and industrial facilities that fail to decarbonize may find it more difficult and expensive to raise financing.
  • Difficulty in Recruiting and Retaining Talent: Employees are increasingly looking for employers that are committed to sustainability and environmental responsibility. Industrial facilities that fail to decarbonize may struggle to attract and retain top talent.
  • Financial Risk: Climate change poses significant financial risks to industrial facilities, including damage to infrastructure, disruptions to supply chains, and increased insurance costs.
  • Regulatory Risk: Governments around the world are implementing stricter regulations to curb carbon emissions. Industrial facilities that fail to decarbonize risk facing fines, penalties, and other regulatory sanctions.
  • Reputation Damage: Industrial facilities that fail to decarbonize risk damaging their reputation and losing the trust of their stakeholders. This can lead to a loss of customers, investors, and business partners.
  • Loss of Competitive Advantage: Industrial facilities that fail to decarbonize risk losing their competitive advantage in the marketplace. Consumers, investors, and other stakeholders are increasingly prioritizing sustainability, and facilities that fail to decarbonize may be left behind.
  • Missed Opportunities: Decarbonization presents opportunities for innovation and growth. Industrial facilities that fail to decarbonize risk missing out on these opportunities and may struggle to remain competitive in the long term.

Decarbonization is no longer an option for industrial facilities—it is a necessity. Manufacturers and facility managers must take action now to reduce their carbon emissions and transition to low carbon operations. By doing so, they can reduce their environmental impact, comply with regulations, save money, and maintain their competitive advantage in the marketplace.

Now is the time for manufacturers and facility managers to prioritize decarbonization and ensure a sustainable future for their businesses and the planet.

Innovation: The Core of Decarbonization

While climate change is a primary driver for action, other factors, including policy changes, regulatory frameworks, and increased consumer demand for low carbon products and services, are forcing businesses to re-evaluate their strategies.

Businesses need to adapt their business models to the changing environment and create plans to decarbonize their operations on a large scale.