Sustainable AV: Is it Time to Care?

We hear the word “sustainability” all the time in our lives as consumers.  Restaurants are eliminating straws and switching to biodegradable packaging. We are more conscious of reducing our carbon footprint by using public transportation or electric/hybrid vehicles. Yet, we have not heard as much discussion about this topic in the circles of the professional AV industry. Should we as an industry be more conscious of sustainable initiates and strive to build them into our business processes?

We interviewed Kim Knickle, Research Director for ESG at Verdantix, who answered many of our questions around sustainability, including:

• Is being sustainable the only area we should be focused on?
• What does sustainable mean for businesses and specifically the Pro AV industry?
• Are there any hidden impacts we may not be aware of related to ESG initiatives?

Kim informed us that, “We’ve been using the term sustainability for a long time, and I’ll say that the definition of that has evolved. In today’s world, we talk about ESG and sustainability and climate risk, all in one bucket. ESG encompasses the fact that there’s been an evolution in thinking about connecting the financial implications of sustainability, across environment, social, and governance.

Manufacturers are considering all three components: environment, social, and governance. For example, they’re thinking about a sustainable supply chain, minimizing risk, and knowing exactly where their products are coming from. They are asking themselves questions such as:

• Are they using any conflict minerals? Hopefully not.
• Do they know exactly who their suppliers are and what kind of practices they have?
• Have they done an industry 4.0 review of their factories?
• And are they using, technologies such as IOT or artificial intelligence, or even Cloud technology to minimize the footprint of their factories?

The Pro Av industry is familiar with fairly simple automation such as sensors that detect there is no one in a conference room and subsequently turn off the lights. But the technologies Kim discussed are much more complex.

Kim cited an example. “I know of a manufacturer who used both IOT and AI to minimize waste in the production process. They were able to take images as a product was being built, identify when one of the machines was getting too hot, and was damaging the wiring. By getting an alert when the temperature was changing, they’re able to retune the manufacturing process and throw away less product. The benefit was they had more product to sell at a lower cost. So, the areas to consider for improving technology and process and people to be more sustainable are definitely all connected.”

In an ideal world, all of us—consumers, manufacturers, and all busines entities— should care about sustainability to enable a healthy and safe environment for everyone on earth. If that is not motivation enough, organizations should be aware there are serious business and financial implications tied to ESG initiatives. Capital markets and SEC rules will also have an impact. For example, the SEC—securities and exchange commission—is working on rules that will require public companies to disclose their climate risk much like they disclose other business risks. Some examples of climate risk include a business’s exposure if there is a natural disaster. Or the factory location; what concerns might the business have if the factory is located near the sea with the risk of rising sea levels? Access to water may pose another risk; if the process requires water and water tables are decreasing in the area, what is the plan?

Or it could be a  product requires a specific component, and it’s just not sustainable to acquire that resource. Another consideration is access to capital; cost of debt is two and a half percent higher for firms with inferior sustainability performance compared to others in their industry. On the positive side, office buildings that achieve the highest sustainability standards can charge more for rents. So hopefully if being kind to the earth and your fellow humans does not convince you to consider and implement ESG initiatives maybe the financial implications will.

ESG in the news

Learn more about sustainability. Read these related news articles.

• AV and Sustainability: Repair and Replace
• Eco-friendly AV Planning: 3 Things to Consider When Designing Sustainable Spaces
• Sustainability in Pro AV: A Progress Report

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