Nextbitt Newsletter | January 2025

This month's Newsletter highlights how efficient physical asset management is essential for achieving corporate sustainability goals. It explores the direct impact of asset management on lifecycle, resource consumption, environmental footprint, and how solutions like EAM, EMS, and EnvMS can reduce emissions, operational costs, and improve overall efficiency.

Why Sustainability Starts with Physical Asset Management

As sustainability becomes a core business objective globally, integrating efficient physical asset management into the company’s operational strategy is no longer optional—it’s a necessity. Physical asset management plays a pivotal role in the sustainable operation of businesses, as it directly impacts the lifecycle of physical assets, resource consumption, and environmental footprint.

According to the World Economic Forum, over 80% of global greenhouse gas emissions stem from industries using physical assets such as machinery, transportation fleets, and buildings. Efficient asset management, therefore, is critical for reducing these emissions and meeting both regulatory and corporate sustainability goals (Statista). Studies indicate that companies implementing comprehensive asset management systems can reduce operational costs by up to 15% and cut energy consumption by 20% (IEA).

Optimizing asset management not only reduces energy use and waste but also delivers financial savings. This highlights a fundamental truth: there is no sustainability without effective physical asset management.

What Is an Asset for Companies?

In the context of sustainability, an asset refers to tangible physical items—machinery, vehicles, buildings, infrastructure—that a company uses in its operations. These assets have a significant influence on the company's sustainability efforts. Outdated machinery, for example, tends to consume more energy, produce greater emissions, and suffer from higher failure rates. This inefficiency not only raises operating costs but also contributes to environmental degradation.

A McKinsey study found that outdated infrastructure contributes to up to 30% of global energy waste. Optimizing the lifecycle of physical assets—through better management and timely upgrades—can reduce this waste and lower a company’s overall carbon footprint (Statista). Effectively managed assets, therefore, enable companies to reduce their environmental impact while improving operational efficiency.

The Importance of Physical Asset Management

Asset management is about maximizing the value derived from physical assets while minimizing costs and environmental impact. It includes monitoring performance, scheduling maintenance, and optimizing energy usage. Through proper asset management, companies can reduce waste by extending asset lifecycles, improving resource efficiency, and avoiding costly replacements or repairs.

According to a 2023 Deloitte report, companies with robust asset management strategies report 15% higher profit margins than their competitors. This profitability is linked to the ability to track and optimize asset performance, reducing inefficiencies and increasing the

value derived from each asset (IEA). By adopting such strategies, companies can lower their operational carbon footprint and contribute to global sustainability efforts.

How Physical Asset Management Can Drive Sustainability

Asset management directly contributes to sustainability by improving energy efficiency, extending asset lifespans, and reducing waste through informed decision-making. Predictive maintenance, a technique enabled by asset management systems, allows companies to identify equipment failures before they happen. This proactive approach not only prevents environmental damage caused by sudden breakdowns but also helps businesses optimize energy use and minimize downtime—both of which align with sustainability goals.

A prime example is General Electric (GE), which has successfully reduced its energy consumption across industrial plants by 20% annually through the implementation of asset management systems (Statista, IEA). This significant reduction supports GE's sustainability targets, demonstrating the critical role of asset management in both financial and environmental performance.

The Role of EAM Software in Physical Asset Management and Sustainability

Enterprise Asset Management (EAM) software is a key enabler of sustainability. EAM systems allow companies to track and manage assets throughout their entire lifecycle, from acquisition to disposal. By incorporating real-time data, EAM software enables organizations to:

· Predict when maintenance is needed

· Optimize the replacement of inefficient equipment

· Reduce waste through better resource allocation

For example, Siemens uses an IoT-enabled EAM system to monitor real-time asset performance, cutting energy consumption by 20% in its manufacturing plants (Statista). EAM systems enable businesses to improve asset performance and optimize energy usage, which reduces both costs and environmental impacts.

How an EMS Integrates with EAM to Boost Sustainability

An Energy Management System (EMS) complements EAM by providing businesses with tools to monitor and optimize energy consumption across all physical assets and facilities. When integrated with EAM software, EMS offers a comprehensive view of energy usage across operations, including buildings, machinery, and fleets. This integration allows companies to identify areas of energy waste and implement corrective actions.

Google, for example, has integrated its EMS with EAM systems to monitor energy use in its data centers. This integration led to a 40% reduction in cooling energy consumption, significantly improving both energy efficiency and sustainability (Statista). This example underscores how combining EAM and EMS can enhance sustainability efforts and optimize operations.

How an Environmental Management System (EnvMS) Integrates with EAM

An Environmental Management System (EnvMS) tracks environmental impacts like carbon emissions and waste generation across a company’s operations. When integrated with EAM and EMS softwares, an EnvMS connects environmental data with asset and energy performance metrics, allowing businesses to identify which assets contribute most to their environmental footprint.

For instance, a company manufacturing heavy machinery can track the carbon emissions produced by each asset via an EAM system. By analyzing this data through an EnvMS, the company might decide to replace outdated machinery with more energy-efficient models, significantly reducing emissions and improving its sustainability performance (Statista).

The Importance of CSRD Compliance

As sustainability regulations tighten, businesses must ensure compliance with frameworks such as the Corporate Sustainability Reporting Directive (CSRD), which requires large companies to report their environmental impacts. Effective management systems (EAM, EMS & EnvMS) make it easier to comply with these regulations, automatically tracking necessary data and generating compliance reports.

According to the European Commission, companies that adhere to asset-related reporting under CSRD are viewed as more trustworthy and are more likely to attract investment from sustainability-conscious stakeholders (IEA). Physical asset management is, therefore, not just essential for operational efficiency but also for ensuring compliance and securing long-term business viability.

Waste Management and Carbon Footprint Tracking

Efficient asset management plays a key role in reducing waste and tracking carbon footprints. By optimizing asset usage and maintenance, businesses can extend the lifecycle of their assets, minimize the need for new resources, and decrease waste. Asset management also enables real-time tracking of each asset’s carbon footprint, providing businesses with critical insights into their environmental performance.

Microsoft uses an integrated EAM system to monitor the carbon footprint of its assets. By analyzing emissions data from its manufacturing operations, Microsoft achieved a 15% reduction in carbon emissions (Statista). This illustrates how effective physical asset management can simultaneously drive financial savings and environmental benefits.

Audits and Sustainability Reporting

Auditing is crucial to ensuring that companies meet their environmental goals. Asset management systems help businesses generate accurate sustainability reports that reflect their true environmental impact, enhancing transparency for investors, regulators, and customers. With real-time data from EAM, EMS and EnvMS systems, companies can easily audit asset performance, ensuring sustainability reports are based on accurate, up-to-date information.

How IoT Connects It All

The Internet of Things (IoT) plays an instrumental role in optimizing asset management systems. By enabling physical assets to communicate and transmit real-time data, IoT allows companies to track asset performance, energy usage, and maintenance needs. This data-driven approach reduces waste and enhances operational efficiency.

For example, BMW integrates IoT sensors with its EAM system to monitor production line machinery. This integration has led to a 20% reduction in energy usage and a significant decrease in downtime (Statista). These improvements underscore the power of IoT in enhancing both sustainability and operational efficiency.

The Path to Sustainable Business Practices

There is no path to sustainability without physical asset management. Companies that integrate EAM, EMS and EnvMS systems and IoT technology into their operations maximize the value of their assets while minimizing their environmental impact. By reducing waste, carbon emissions, and energy consumption, businesses contribute to global sustainability efforts and improve their bottom lines.

The companies that lead in asset management will be the ones shaping the future of sustainable, environmentally responsible business practices. In an era where sustainability is not optional, businesses must recognize that physical asset management is not just a tool for reducing costs, but a powerful driver of sustainability. By investing in these systems, companies position themselves for long-term success—financially, environmentally, and socially.

If you need help managing your Physical Assets and Facilities sustainably, Nextbitt is here to help you in your journey.