Mark Casidsid
Mark Casidsid (Senior Research Analyst, IDC Manufacturing Insights)

Sustainability was centre stage at the recent Hannover Messe, which was attended by more than 4,000 companies including the biggest and emerging technology vendors. This year, the focus was on technologies to support sustainable and climate neutral operations. Here are my main takeaways:

  • Energy and resource efficiency: you can’t improve what you don’t measure. Given the ongoing energy crisis, companies are scrambling to seek new approaches to optimise their energy use. We estimate that more than 40% of manufacturers worldwide consider high energy costs a top 3 driver for investing in sustainability initiatives.

Several executives I spoke with said that till a few years ago companies did not focus much on where energy is used, how it is used and how much of it is wasted, but things are very different now. Several energy management solutions that can capture and analyse usage from end to end, while being scalable, can provide manufacturers with this level of visibility.

We estimate that close to 9 in 10 manufacturers globally have already invested in a resource or energy management system or plan to do so in the next 12 to 18 months.

  • Tackling scope 3 emissions: collaboration is key. Regulatory and customer pressure are driving companies to look at their carbon footprint in a holistic way. On the regulation side, the EU Corporate Sustainability Reporting Directive (CSRD) recently came into force, requiring 50,000 companies to disclose sustainability-related information in their management reports.

Also, customers increasingly prefer to do business with suppliers with solid sustainability credentials. We estimate that 40% of companies worldwide consider more stringent requirements from customers (i.e., in RFQs) a key driver for investing in sustainability projects.

To manage and accurately report emissions data, cloud-based platforms that can contextualise, analyse and share sustainability-related data are becoming indispensable. In the same way, open and collaborative data ecosystems such as Catena X (in automotive value chains) enable the sharing of emissions-related data in a transparent and trustworthy way.

At Hannover, there were discussions on how this framework is being extended to the broader manufacturing sector (Manufacturing X) to create an interoperable ecosystem that supports resilient and sustainable manufacturing across all industries. Enabling manufacturers to track and manage their scope 3 emissions can have a real impact on achieving their net-zero targets.

  • Circularity is driving sustainable innovation in manufacturing. A shortage of raw materials such as rare earths, as well as dealing with waste (including electronic waste), are also accelerating the shift to more circular business models. At Hannover, there was a lot of focus on battery production with tech vendors showcasing their solutions for end-to-end manufacturing from design with circularity in mind, enabling cost-effective and high-yield production, and their eventual recovery and remanufacturing.

We are also one step closer to the EU battery passport, with the first publicly available content guidance unveiled at Hannover, providing indications on how to comply with the EU Battery Regulation, which advocates for more sustainable and circular battery production.

  • Thoughts for the future: what the industrial metaverse and generative AI mean for sustainability. Several companies showcased their value propositions in the industrial metaverse with initial use cases focused on worker augmentation and training and remote maintenance. It will be interesting to see more use cases for sustainability in future.

 

I also expect generative AI to gain more visibility at next year’s fair, having seen several examples of how it facilitates “interactions” with machines and increases worker productivity. In the near future, it will be great to see how it helps drive sustainability initiatives such as designing circular products or helping companies interpret complex ESG regulations.

IDC’s Manufacturing Insights team has prepared a list of 10 key trends from Hannover, including sustainability themes. Please get in touch, as the team will be happy to share our key takeaways with you.

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