Sustainability drives IoT way beyond ROI – Stacey on IoT

A few months ago at an event in Dallas, I spoke with Matt Barber, CEO of Vutility. The company makes a sensor that either hangs from a wire or can be installed in a circuit breaker to measure electricity consumption. It then sells the data generated by that sensor back to its customers. As part of our conversation, Barber said that demand for the product had skyrocketed as a result of ESG reporting requirements.

ESG, for those who are unaware, stands for Environmental, Social and Governance. Many companies voluntarily adopt or are coerced into ESG targets by their investors, partners or the SEC. Many of these goals focus on sustainability and any requirements related to companies tracking and reducing their carbon footprint.

External pressure and social responsibility are the driving forces behind sustainability goals. Image courtesy of Omdia.

For example, at the end of May, the SEC proposed a set of rules that would mean that publicly traded companies in the US would have to report their carbon footprint. Meanwhile, cities like New York and Chicago have laws on their books that require the owners and/or operators of buildings in their cities to reduce the carbon footprint of those buildings by measurable amounts. Many companies voluntarily adopt plans of a similar nature.

And the IoT is ready to help. Vutility, which helps companies easily adapt their electricity infrastructure to measure where every watt goes, has seen demand for its services rise. More established companies like Honeywell have adapted their product lines to meet the needs of their CO2 counting customers.

Honeywell, which has its own goal of being carbon neutral by 2035, is seeing customers of its Honeywell Process Solutions products focus more on methane emissions as they have up to 84 times the global warming impact compared to carbon dioxide, said Adrian. Fielding, GM of Emissions Monitoring and Reduction for Honeywell Process Solutions via email.

Honeywell is targeting wireless detection sensors that can be placed near potential leak sources, he told me, giving plant managers more accurate information at the source of the leak. The resulting data can be used to generate better predictive maintenance algorithms and lead to faster response times for fixes – all of which can help meet sustainability goals as well as reduce fines.

Building automation and green building are also major potential markets for major industrial suppliers such as Johnson Controls, Schneider Electric and Siemens. This week, Siemens acquired both a company to make buildings smarter and launched Building X, a software-as-a-service offering that allows companies to track how buildings use energy and clarify how these efforts can be improved. And last week, Johnson Controls acquired a network security company for smarter buildings. It also partnered with Accenture to present two new implementations of its OpenBlue smart building software.

Building automation today serves three purposes, both for tenants and owners. The first is to help them save or make better use of energy, whether they’re doing it to cut costs or meet ESG goals or both. The second is to help tenants understand occupancy trends as companies try to figure out how to adapt their real estate holdings for hybrid work. And third, it needs to be ensured that employees can stay safe as they return to the office in a world where COVID is still rampant.

In June, Ron Rock, CEO and co-founder of, came on the IoT Podcast to highlight those trends. He also discussed how companies are trying to put in place an IoT infrastructure first so they can collect data that they can use to establish a baseline before adopting ESG commitments and goals. That means companies are likely to spend money on the IoT and sensor infrastructure and not adapt their implementations until they know how they want to achieve their goals. like him said at the time “Everyone is now being asked to report on ESG data, which is driving a lot of IoT spend.”

Research firms agree. IDC recently released a report noting that spending on ESG performance will grow to $158 billion by 2025, with a compound annual growth rate (CAGR) of 32.3 percent. Unfortunately, according to IDC, two-thirds of that spending goes on consulting services. That means less money for sensors and more money for figuring out how to get data than how to adapt to and meet climate and governance goals.

Another challenge is inflation. Research agency Omdia recently posted an article notes that demand for ESG spending is on the rise, but warned that concerns about inflation and demand for more energy could lead companies to reduce their efforts in this area to ensure sustainable gains over sustainability.

It is clear that the demand for energy consumption data will remain high, either because of sustainability goals or because the cost of energy is rising and companies are trying to use it more efficiently. Either way, IoT companies are eager to serve this new market.

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