As global industry changes, automation is on the cusp between innovation and sustainability. In view of the growing importance of CO2 reduction and sustainable business practices, legal frameworks and initiatives are being redesigned to pave a sustainable way forward. Over the next ten years, five key standard-setting initiatives will influence the way automation companies operate, innovate, and compete with each other. Understanding these legal dimensions is important. This enables companies not only to comply with the rules, but also to play a pioneering role in sustainability.
The SBTi encourages companies to set science-based greenhouse gas reduction targets that are in line with the Paris Agreement. The climate targets set therein include direct and indirect emissions. Companies can influence direct emissions individually, while indirect targets are dependent on the supply chain. In the automation industry in particular, there is pressure to integrate these emission reductions in order to remain competitive. Companies could therefore give preference to suppliers who actively contribute to achieving their own climate targets. This can improve brand reputation and strengthen the trust of environmentally conscious customers. Learn more about the SBTi and its goals.
The European Green Deal is a comprehensive collection of EU initiatives aimed at achieving the green transformation. The EU is to become climate-neutral by 2050 and the consumption of resources is to be decoupled from economic growth. This includes various political measures that give rise to specific regulations such as the CSRD and CS3D. For the automation industry, this means switching to sustainable practices, developing products for the circular economy, and complying with stricter energy efficiency standards. At the same time, financing opportunities are opening up, as companies that invest in green innovations will have access to grants and subsidies.
The CSRD significantly expands the sustainability reporting requirements for companies within the EU. The aim is to standardize sustainability reports, make them comparable, and ensure greater transparency. Buyers are increasingly demanding credible proof of their suppliers' sustainability promises. This requires robust data management systems. Companies that publish the CSRD standards at an early stage and automate data (down to field level) can secure competitive advantages through transparent reporting and thus strengthen their market position. Guidelines and details on the CSRD can be found here.
The CS3D aims to promote social and environmental sustainability in the supply chain. Companies need to take a close look at the sustainability practices of their suppliers. Those which do not meet the standards are at risk of liability. At the same time, the CS3D also opens up potential business opportunities, as compliance with the standards is a prerequisite for access to European markets. Further information on CS3D can be found here.
The Energy Efficiency Act stipulates how energy should be used. This leads to a greater search for efficient solutions and promotes innovations for energy optimization in the areas of digitalization, AI, and IoT. This is particularly relevant for the automation sector, which plays a key role in industrial energy management. The demand for highly efficient automation solutions will increase as companies strive to achieve energy efficiency targets. At the same time, there is a growing need for service offerings that enable the mandatory improvement in energy efficiency to be implemented.
Increasing ESG regulation and pressure on the value chain through indirect targets herald a paradigm shift. Sustainability is becoming a decisive factor in purchasing decisions in automation. Companies that act proactively and invest in next-generation sustainable technologies can strengthen their market position and take advantage of new opportunities. These consist primarily of monetary savings through lower energy consumption and simplified data analysis, which leads to more transparent reporting. The costs of complying with sustainability laws must be weighed up against the savings achieved through lower energy consumption.
The automation industry now has a unique opportunity to take a leading position in terms of sustainability. Buyers play a crucial role in this by choosing partners and products that support and comply with evolving regulatory standards.