History will look back on this moment as a critical pivot point in the arc of the energy industry’s sustainability transition. Several strategic concerns—including energy security, carbon emissions and affordability—are converging around today’s executive leaders, and they must, right now, decisively drive the industry into the future.
Decision-makers are already trying to embrace “green” practices, according to a joint SAP and Oxford Economics study on the future of sustainability in the oil, gas, energy, and utilities industries. But it’s not easy. In the study, senior leaders described their sustainability planning as “well underway” but said execution of those plans was “very much a work in progress.”
This creates a big challenge, as industry companies must continue working rapidly to evolve their business models and meet both future sustainability goals and jurisdictional regulations. Deft management and ample information will be vital to making strong decisions that positively influence companies’ strategic direction. This also creates a big opportunity, as today’s digital technologies, including artificial intelligence, can enable the necessary changes today’s industry leaders are chasing—and guide them to a thriving, sustainability-focused future.
The possibilities of tomorrow are incredible. And it all starts today.
Finding Digital Direction
Most oil, gas, and energy (OGE) companies anticipate digital technology will play a major role in the energy transition and emissions reporting. Here’s where things stand today, per IDC:
- 30 percent of OGE companies collect emissions data internally but do not report it
- 37 percent of OGE companies collect and fully report emissions data
- 63 percent of companies have access to enough data but find it is not reliable or suffers from quality issues that prevent accurate assessment and reporting
Digital enterprise technology solutions must lead the charge in building new business models on a global scale for OGE companies, across the entire end-to-end value chain. This might delve into clean hydrogen supply chains; further upbuild of more renewables, such as wind, solar, and biofuels; distributed energy resources models; new technology innovations around processes like carbon capture, and much more. Crafting and simplifying these models will be crucial for sustainability-focused OGE companies.
That’s because energy company operations are bound to become far more complex amidst the drive toward net-zero. Investments in and operations of low-carbon practices and processes will often be foreign to industry leaders and require the aid of technology that can manage a denser and more diverse asset portfolio. Cost and efficiency will be at a premium. Technology offerings like enterprise asset management, asset performance management, and enterprise resource planning will need to be upgraded to meet these changing operational objectives and increasing efficiency requirements.
Going All-In on AI
Developing those technologies for our customers, particularly our OGE customers, is the work we’re doing today at SAP. Because while we’re on track to reach net-zero by 2030 as a company, that’s only a very small part of what we’re aiming to do overall. As an enterprise technology company, we want to help our customers drive toward that as well, especially those working directly in the energy industry.
Artificial intelligence (AI) will be a massive part of that push.
OGE companies are chasing the place where AI and sustainability come together. For them, AI has long been in use, helping to analyze data for core business operations. However, it is poised to become a key driver in a number of sustainability-related areas as well, including improving energy efficiency, generating more streamlined and effective work and production schedules, and providing insightful risk intelligence to traditional supply-chain decision-makers.
That’s only the tip of the iceberg. We will also see energy companies embrace generative AI technology in the next year, to help support efforts in areas like customer service and begin building up expansive large language models that can create massive technological power.
All of these efforts will help drive the industry towards net-zero—and upend its long-held reputation as a “non-green” space. Before long, OGE companies will be leaders in sustainability, continuous growth and innovation, and success.
Taking Action Today
So, how can your organization begin reshaping its strategic vision to be more sustainable and innovative? Start by embracing these three strategies:
- Incorporate supply chain sustainability into decision-making: Establishing strong processes, meaningful metrics and regular audits right now will help ensure your sustainability metrics are consistent, create transparency to make the right decisions, and are reliable down the line.
- Prioritize efficiency in the present to maximize resource value in the future: Establishing systems that turn a precise, real-time understanding of resources into actionable insights will make business transitions less painful today and more effective later (because, to be clear, the energy transition will not be an overnight process).
- Digital transformation is key to success: Building a solid cloud system of automated operations not only provides organizations with the critical sustainability data they need but also creates further business processes to exploit new market opportunities that serve both new and existing customers and help to adopt to the new business reality.
The world is changing rapidly due to the journey to net zero. The world clearly needs to head in this direction. What are you doing to ensure you are part of the change and don’t get left behind?
Daniela Haldy-Sellmann is Global Vice President and Head of Energy & Utilities at SAP. To learn more about utilities in the ASUG community, sign up to receive ASUG's monthly Utilities newsletter and register to attend our SAP for Utilities conference in Miami (Sept. 9-11, 2024).