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Transforming Tomorrow: Sustainability and the Global ER&D Services Sector
Transforming Tomorrow: Sustainability and the Global ER&D Services Sector

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Sustainability is evolving. With projections indicating a USD 12 trillion rise in demand from sustainability-focused initiatives by 2030, breakthrough technologies, especially AI and Gen AI, are helping strengthen and accelerate the trend toward a greener tomorrow.

The global ER&D services organizations, and their wide-ranging, multi-domain client/partner ecosystems, are realigning with the emerging dynamics of the ecosystem. Sustainability is no longer just about reducing carbon footprints, but rather, about long-term value creation for businesses and the society. This is evident across vital activities ranging from plant setup and modernization, automation, manufacturing transformation, energy transition, product engineering, and to the growing adoption of digital technologies.

Integrating Sustainability: A Step Forward

A recent report found that companies with robust sustainability practices tended to outperform their peers financially. And another major survey revealed that over 80% of global respondents felt that businesses had a responsibility toward protecting the environment. This growing consumer sentiment in favor of sustainability, combined with the positive impact on bottom-lines, has inspired as much as over a third of the largest global organizations to already declare public goals for Net Zero by 2050.

The momentum, although is only just picking up.

We are witnessing a significantly higher demand for CAPEX and technology adoption across process industries. Global spends by 2030 are expected to touch USD 1.1 trillion for Oil and Gas, USD 460 billion for Chemicals, and about USD 980 billion for FMCG. In the area of industrial products, the 2030 horizon includes a global green facilities market at USD 1.2 trillion, USD 1.9 trillion for machinery, and around USD 300 billion toward electrical power and controls.

For ER&D services leaders and their clients, understanding the significance of sustainability, therefore, is the first step toward driving meaningful change. From enabling digital transformation and automation journeys to embracing sustainability in new product design, there is a need to rethink traditional practices in favor of new approaches.

Technology, especially digital technology, is proving a key differentiator and a major enabler here. AI and Gen AI continue to open up new avenues for transforming existing operational models, while IoT, combined with next-gen connectivity and cybersecurity, redefines the dynamics of a connected world. To cite a quick instance, AI-powered design tools today enable the creation of more efficient and sustainable products, while Gen AI-powered analytics is helping optimize manufacturing processes and reduce waste.

Developing a New Paradigm: Sustainable Products and Processes

The adoption of sustainable product development practices and processes can enable global ER&D companies to take a leadership role in driving environmentally friendly and economically viable offerings for their clients. A key approach here is the life cycle assessment (LCA), helping identify improvement areas and guiding the subsequent strategies to drive enhanced compliance with sustainability goals. AI and other digital technologies are a proven force multiplier in this direction.

Another focus area is the growing use of sustainable materials. This involves selecting inputs such as recycled or renewable materials as opposed to single use variants, helping lower environmental impact in terms of resource consumption and wastage. Deep and sustained research into the development of suitable alternatives, including biodegradable plastics and reclaimed wood, and efficient design that minimizes the need for material are some vital activities in this regard. Digital technologies and connected platforms strengthen this transition, by helping unlock new value streams by providing a unified, real-time view for better control and effective management. The shift also calls for a robust R&D infrastructure which, in turn, helps facilitate the original research into new alternatives.

A sustainable products and processes paradigm, therefore, will include:

  • Embracing sustainable manufacturing, across emission reduction, energy transition, the use of Green Hydrogen, and the circular economy. Companies can leverage cutting-edge offerings, including, digital twin and thread, digitalization, apps and analytics, new age data centers, sustenance engineering, and a range of reusable templates and solutions for reducing their environmental impact and driving a sustainable future.
  • Promoting a culture of sustainable innovation. By nurturing an environment that encourages creativity, collaboration, and experimentation, organizations can empower employees and stakeholders toward developing new ideas and solutions. In turn, this helps promote sustainability, unlock long-term value, and drive positive change.
  • Leveraging a robust partner ecosystem, often the most overlooked aspect of the journey toward sustainability. By working with specialized organizations and ER&D majors, global businesses can improve their sustainability quotient leveraging a customized bouquet of multi-vertical expertise and resources. This includes access to cutting-edge R&D infrastructure, an ability to address global demand with central governance, and integrated teams that are capable of delivering quicker turnarounds within budget.

The development of new technologies and solutions, combined with processes and practices that help improve sustainability, is therefore the key toward driving a truly transformative impact across the sustainability spectrum.

Sustainability: Not an Extra

Organizations worldwide are taking steps to drive their sustainability quotient, and the ER&D sector will play a major role in this transformation. As industries align with sustainability standards, the contributions of the global ER&D companies will become indispensable toward shaping a world where economic growth and environmental responsibility coexist, harmoniously.

While the outlines of this transition continue to evolve, it is evident that breakthrough technologies will increasingly play a greater role in the days to come. Leveraging enhanced computing, robust cybersecurity, reliable connectivity, and a growing understanding on the importance and need for greener solutions, the future looks promising.

Our future is being defined by a synthesis of AI, core engineering, and sustainable practices as industries reshape and evolve. Sustainability will no longer be an optional extra.

Authored by Amit Chadha,

CEO & Managing Director, L&T Technology Services (LTTS)

Amit Chadha, CEO & Managing Director, L&T Technology Services (LTTS)


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