For several years, sustainability has been a hot topic amongst Fortune 500 companies. This is being driven forward by many stakeholders including investors, suppliers, employees, governments, and communities. While our research suggests the majority of companies and consumers won’t pay more for a more sustainable product, most agree that using less resources is better.
It seems like every company in tech is making long-term promises related to sustainability, but not many of the promises take effect in the near term. This is because many links in the value chain need to be changed that take a long time to accomplish. We often hear about reducing waste or carbon emissions to a sustainable level by 2030 or 2040, but few companies are producing products to deal with it in the short term.
Whether its reducing methane gas emissions or reaching a carbon-neutral state, sustainability is a popular topic in our country and globally. Consumers and customers want to know that companies they purchase from care about the long-term sustainability of the Earth. Honeywell is a company that wants to be a leader in sustainability not only in the long term but right now. Honeywell’s CEO Darius Adamczyk has been very outspoken recently about the company’s sustainability commitment and strategy, specifically on its role as leading the world’s energy transition.
Lets dig into some of the recent comments from Darius Adamczyk that give us a deeper look into Honeywell’s sustainability strategy. Keep in mind a CEO can only talk about so many priorities and with Adamczyk leading with it more and more, you know he and the company are serious about it. I’ll also add that unlike other companies talking about sustainability Honeywell is amongst the only that have the data, SaaS solutions and the sensor build-outs to actually do something about it. A full-stack sustainability provider.
Honeywell’s sustainability strategy
Honeywell is a company that produces a broad set of products ranging from building control and management systems to aircraft avionics for commercial planes, drones and unmanned vehicles. Because of Honeywell’s broad scope of products spanning across the many central sectors of the economy (energy, aerospace, logistics & retail supply chain, and real estate), the company must be especially focused on its sustainability. Thankfully, Honeywell’s CEO Darius Adamczyk has shared much insight into Honeywell’s strategy as of late. Its current sustainability strategy contains a mix of products deployed today and products set to deploy soon with partners like United Airlines.
In a recent interview on the Making Markets Podcast Honeywell CEO, Darius Adamczyk stated that “50% of the companies R&D spend is focused on ESG solutions.” For those that aren’t familiar with ESG, it stands for environmental, social, and governance. That means that the company is putting a massive amount of actual dollars towards researching and developing solutions that positively impact the Earth. The suite of technology that Honeywell manufactures includes green fuels, hydrogen, plastics recycling, and carbon capture, to name a few. One of its most compelling pieces of sustainability technology is the Honeywell Rebellion GCI technology, which uses cameras to spot gas leaks on oil and gas sites.
Darius Adamczyk made a bold claim in a recent interview with Barron’s, stating, “Honeywell has more sustainable solutions for the future of the planet than I believe any other company out there.” After hearing the list of sustainability solutions, I would be hard-pressed not to believe him.
It is estimated that some 1,600 companies, accounting for trillions of dollars in revenue have publicly set their sustainability pledges by now. This puts them on track to transition from pledge to performance, – something that will continue to be monitored over the next 15+ years, long after the current CEO will likely be at the helm. The big difference between Honeywell and many other Fortune 500 companies regarding sustainability is the tangible evidence of the company’s existing portfolio today. The Honeywell differentiator is its position in the sustainability efforts in solving current problems. . That is not to say that other companies aren’t doing some of the same right now, but few at Honeywell’s scale and role standing behind the science of these solutions. The company looks conscious of the future of energy and reducing the negative effect of producing goods on our environment today.
The methane gas challenge and opportunity
Many buzzwords come to mind when you hear the word sustainability. We have all heard phrases like climate change, methane gas, and carbon emissions in recent years. There is a good reason for this: preserving the Earth is extremely important. Companies that manufacture a massive number of products create large amounts of waste. The only way to keep these companies accountable for their environmental degradation is by measuring what it does to protect, preserve, and sustain the environment.
One of the biggest threats to the atmosphere today is Methane, an invisible and odorless gas. According to the Environmental Protection Agency (EPA), Methane accounts for 20% of global emissions currently. It also is 25% more potent than carbon dioxide in trapping heat. Methane is most associated with the oil and gas sector, where it is emitted at every stage of oil and gas production. There are many other areas of concern, including alternative fuel sources, plastics, carbon dioxide, and more.
According to the Oil & Gas Methane Partnership, in 2021, the global oil and gas industry lost $19 billion of natural gas due to methane leaks. Not only is it a costly mistake, but it is also harmful to the environment. The oil and gas industry has more effect on our climate than all the gas-powered vehicles on the planet because of the large amount of Methane it releases into the atmosphere.
Honeywell Rebellion GCI system
One of Honeywell’s secret weapons in sustainability space came when the company acquired Rebellion Photonics in 2019. Rebellion Photonics brought a wealth of Gas Cloud Imaging solutions to Honeywell. Its GCI cameras are best suited for oil and gas manufacturers and can sense a gas leak up to 1,700 meters away, identify the type of gas leak based on its fingerprint region, analyze data in real-time to track the leak, record video of the leak, and finally notify the operators of the leak so they can stop it. The differentiator for Honeywell’s Rebellion GCI solution is its real-time, 24/7 monitoring and measurement capabilities to the oil and gas companies. Not only does it report in real-time and make these sights safer, but it also saves companies money.
Helping oil and gas companies realize, quantify, and solve the problem is the value of Honeywell’s Rebellion GCI solutions. Another way to benchmark the company’s commitment is that the Rebellion Photonics CEO, Robert Kester, has stuck around to run this business under the Honeywell flag well past his obligation. I believe this says something about the company’s mission and Honeywell’s commitment to sustainability.
The main difference between Honeywell and other companies in the industry is that Honeywell manufactures and sells actual products that help themselves and other companies reach their sustainability goals right now. It’s a full stack sustainability play spanning industrial equipment, innovation and controls for enterprises and the SaaS solutions to intelligently manage it.
The company has its hands in many different sectors. However, its diversity is also a strength when it comes to sustainability—playing a role in green fuels, hydrogen, plastics recycling, carbon capture, and more positions Honeywell as one of the most committed companies to sustainability in my eyes. After seeing Honeywell’s current suite of sustainability solutions, I believe the company could be one of the leaders in sustainability solutions for the foreseeable future.