As conversation hots up over how sustainability and digitalization will affect electrical wholesaling, EUEW asked Jean Miyeli, Segment & Sustainability Strategy Director for Eaton Electrical, EMEA, for his views on this swiftly emerging topic.
Much of the activity driving the energy transition is coming from the energy consumption side, how will this affect the electrical wholesaling community?
As they examine the costs and benefits of investing in the energy transition, customers are asking electrical wholesalers far more detailed questions about the environmental impact of products than they have ever done previously.
Commercial building owners and homeowners alike are looking for products that are environmentally low impact in every respect when it comes to making the energy transition, particularly when they are considering larger assets such as EV chargers, solar inverters, heat pumps, and battery energy storage systems.
Awareness of climate change and its potentially devastating effect on the planet has never been higher and many people now understand how electrification and the circular economy makes better use of energy and raw materials. There is a shift towards a resource-efficiency mindset, and customers are making different choices when it comes to electrical products.
Is the trend for ESG-led investment part of all this?
Yes, environmental, social and governance (ESG) investing has spread through the business world very quickly and this is having a big impact on decision-making in many companies. Only a decade ago, few businesspeople had even heard of an ESG indicator.
ESG is essentially a measure of performance that helps investors and potential investors align a company’s ESG activities with its financial attributes. This makes ESG integral to the company’s current and future value.
ESG is often confused with sustainability, and the two correlate, but there is a difference: while ESG is essentially a tool used by the financial community to compare performance, sustainability is all about reducing the impact a company has on the environment – CO2 emissions and a lot more besides.
Good sustainability practice is likely to result in a high ESG rating, but it will also help change the world because as well as reducing carbon emissions, it means improving air and water quality, preventing precious raw materials heading into landfill, and making the most of all the skills and talents that people have to offer through diversity and inclusion.
What is the impact of circular economy thinking on the value chain?
The scale of transformation involved in implementing the circular economy is vast and far-reaching because it affects the entire industrial value chain from material sourcing to end-of-life strategies. It’s about much more than simply product recycling. The circular economy involves a new approach to developing, manufacturing, and supporting products, with the emphasis on resiliency and an eye to remanufacture. Closed loop manufacturing which involves using digital techniques to make optimum use of materials is becoming increasingly important, too.
A good article published by the World Economic Forum describes the circular economy and sets out why it is important. The article explains how products are kept in use for as long as possible through repairing, recycling, and redesign, so they can be used again and again’.
I work for the global intelligent power management company Eaton and we are developing circular economy business models for our products. This means change for us, and our customers, but we are fully committed to operating sustainably and convinced that circularity is an approach that we must all embrace.
Why do you think the electrical product industry will rise to the challenge of the circular economy?
The answer lies in the economic and regulatory aspects of the energy transition. A low-carbon future is essentially a digital future and the electrical products that underpin the energy transition will be new types of products, most of them more complex than those with which we are currently familiar.
As a society, and as businesses, we will not want to dispose of these higher-value products quickly, the preference will be for circularity to preserve value. This will, of course, limit the consumption of natural resources: a sustainable electrical manufacturing and supply industry will be an asset in a low carbon world.
At Eaton, working sustainably has long been part of our approach to manufacturing electrical products and we take enormous care to ensure those we work with throughout the value chain, from raw material supply to electrical wholesaling, are mindful of sustainability, too. Circularity means taking the approach to a new level, which makes good business sense for all of us.
How can the electrical wholesaling community keep pace with circularity?
Sustainability and the energy transition, driven by governments via regulation, by consumers via their preferences, and by the financial markets via ESG, will reshape our world and reshape our businesses in ways that we’re only just now fully comprehending. Companies are responding fast, too. Many are developing stringent sustainability goals with which their suppliers must comply.
Governments around the world are already legislating to force the pace of the energy transition. EU Member States must comply with laws emerging from Fit-for-55 and RePowerEU that cover virtually all aspects of sustainability, with a particular focus on reducing fossil fuel use. For that reason, on-going conversations within the electrical product and service community will be vital, as will discussions with customers and partners.
All this adds up to huge opportunity for sectors such as electrical wholesaling to grow, as well as a time for electrical industry professionals to evaluate the future shape of businesses and careers. At Eaton, our education and training offer to partners and customers is continuously evolving, with sustainability and circularity inevitably a central topic.
It’s a great time for electrical wholesaling to start participating in circularity, for instance by promoting products and solutions that will further the cause of circularity, and by getting involved in the collection of ‘end-of-life’ products for reuse, recycling or remanufacture.
You can find out more about our approach to circularity on our website, or don’t hesitate to get in touch with us via your local Eaton sales office.
