In his new role as leader of the Schneider Electric power products division, Michael Lotfy focuses on nation-wide sustainability toward the goal of achieving a carbon-free future.
Lofty ambitions.
Here, we chat with the Greece-born / Atlanta, Georgia-residing senior vice president of power products and systems—North America about global and domestic approaches to digitalization, thinking big about sustainability, and ways to speed Industry 4.0 adoption. Take a look…
Smart Industry: What are the differences in domestic vs. global approaches to digital transformation?
Michael: Simply put, digital transformation involves using digital technologies to change a business process to become more efficient or effective. Alarmingly, 80% of global CO2 emissions come from the production and consumption of energy, so digital transformation is now more important than ever to optimize operations.
The difference in domestic vs. global approaches to digital transformation vary; for example we have a long journey ahead of us when it comes to energy resiliency and digital-energy management from source to consumption. What's fantastic is that the newly signed Inflation Reduction Act gives a massive incentive to companies, utilities and even to homeowners to not only work on sustainable energy management, but also digitalization.
Smart Industry: What do you mean by a 'nationwide' approach to sustainability? Why is this necessary?
Michael: Committing to a “nationwide” approach to sustainability first involves organizations across all industries accepting their responsibility to play a role in reaching net-zero emissions to fight against the effects of climate change. To put things into perspective, in order to limit global heating to 1.5 degrees, we would need to remove 10 gigatons (Gt) of CO2 per year by the end of this decade—moving three to five times faster than current commitments.
A decarbonization pathway to success encompasses the following four steps:
1. Define success: Organizations must first understand where they are in their carbonization journey before taking steps toward improvement. A great way to start your journey is by conducting a footprint assessment to establish your organization’s baseline, which will look at emissions and then develop an understanding of emissions by source. This approach can be assisted with ongoing data measurements to provide a single data record that can span thousands of sites.
2. Set targets: Setting targets involves defining goals and establishing a timeline to get there. Specifically setting science-based targets is important, which clearly defines a pathway in line with climate science. If your target isn’t science based, your organization isn’t being held accountable to pursue what is necessary to limit global warming to the 1.5-degree scenario. Businesses have many opportunities to decarbonize within their own operations. For example, organizations can choose to use electric vehicles, which are becoming increasingly common.
3. Deploy programs: When businesses deploy their programs, they not only reduce emissions but also increase resource efficiency and innovation. For example, replacing carbon with low-carbon sources such as electrification, renewable energy, and alternative fuel sources. We must design with sustainability at the core of innovation; with Industry 4.0 this becomes much easier than in the past.
4. Sustain results: Organizations will need to monitor, assess, and even adjust their programs to keep them running at peak performance. As companies maintain their progress, they need to share with stakeholders the strides they are taking to reduce emissions and protect the environment. Reducing emissions can amplify your brand and help retain talent, too.
Smart Industry: How can tech leaders go beyond traditional tech hubs to encourage Industry 4.0 adoption? Why should they?
Michael: Industry 4.0 transformation is an opportunity to transform industrial operations into smart operations. Through digitization, organizations can enable and benefit from agile production, optimized scheduling, and a truly digital supply chain. It’s no longer enough to focus on mitigating carbon emissions in only densely populated areas. Instead, an immediate, nation-wide effort is required to work towards the reduction of global greenhouse-gas emissions to limit global warming.
We must go beyond traditional tech hubs to encourage Industry 4.0 adoption; technology leaders can significantly benefit from that approach. We are talking about a lower cost of investment to the agile-innovation process that Industry 4.0 provides. We at Schneider managed to significantly reduce cost up to 20% on some of our latest innovation using Industry 4.0 technologies due to reduction of raw material, which in its nature links back directly to sustainability—less material, less carbon, as easy as that. So, it provides a multitude of benefits to companies, investors, shareholders and, ultimately, to our planet and to humanity.
Smart Industry: What are you most excited about with your role at Schneider Electric?
Michael: Me moving to Schneider was by design; I've spent my entire life and career working on energy efficiency and sustainability, mainly with digital and software. Schneider is admired worldwide for their culture and sustainability commitments; that in itself excites me. The spirit of innovation, diversity and inclusion, which is very dear to me, the culture of "nothing is impossible" and "dare to disrupt." These are all mixed with a profound belief in sustainability. That puts Schneider in a fantastic position to capitalize of the new wave of growth—digitization, Electricity 4.0 coupled with Industry 4.0, all designed and operated with sustainability. I cannot think of a better equation to, once again, change the game of electrification.
