Manufacturers worldwide are embracing sustainability as the new imperative and becoming a force for good. Recent regulatory developments in Europe including proposed regulation to curb greenwashing and incorporate eco-design for sustainable products, as well as a recently enacted law for sustainable battery production and recycling are just examples highlighting the need for manufacturers to step up their game in sustainability.
Moving beyond compliance and reporting requirements, manufacturers are embedding sustainability into their operations to increase efficiency, reduce their environmental footprint and create long-term value for their partners and customers. According to IDC Global Sustainability Readiness Survey (August 2023), 45% of EMEA manufacturers state that the sustainability related requirements from their business partners are the top driver for operationalizing sustainability, followed by mitigating risks associated with non-sustainable operations, and improving brand reputation.
By producing eco-friendly products and sustainable business models that appeal to their consumers, manufacturers can drive their bottom line and gain competitive advantage.
Based on IDC’s 2023 Global Manufacturing Survey (January 2023) which surveyed 430 EMEA manufacturers, incorporating circular economy principles (i.e. using fewer and renewable materials and designing products that can be easily recycled, repaired, or remanufactured) is the top initiative for 57% of EMEA manufacturers to promote sustainability.
Tracking emissions across the value chain is another key initiative which includes analyzing the carbon footprint from production and exchanging data with suppliers, customers, and other stakeholders. Manufacturers are also investing to reduce waste and drive efficiencies in production including optimizing energy usage.
Manufacturers Priorities in EMEA
Design for Circularity
Designing for circularity focuses on creating products that can be easily disassembled, recycled, and remanufactured at the end of their life cycle. To achieve this, manufacturers rely on resource tracking, materials innovation, reverse supply chain management and advanced recycling methods.
Generative design also enables manufacturers to iteratively create efficient and sustainable product designs that minimize waste and maximize products’ lifespan. Additionally, advanced simulation software can allow virtual product testing, allowing manufacturers to test products with fewer resources while generating less emissions.
Real-time Energy Monitoring and Optimization
Continuous monitoring of energy consumption levels allows manufacturers to have visibility into their energy usage patterns, identify areas of improvement, and optimize their energy consumption. This process leverages sensors, IoT and data analytics platforms to collect and analyze energy data in real-time.
IDC’s Global Sustainability Readiness Survey shows that 52% of EMEA manufacturers are using sensors and smart meters to gain real time visibility into carbon footprint.
Tracking and Tracing Emissions in the Product Lifecycle
Monitoring and identifying emissions sources and quantities throughout a product’s life cycle can significantly reduce its carbon footprint, as Scope 3 emissions can constitute a significant portion of total life cycle emissions. This can be achieved through advanced data analytics, sensors, and internet of things (IoT) devices that collect and analyze emissions data in real-time.
Additionally, blockchain technology can be utilized to create a transparent record of emissions data, ensuring accuracy and accountability throughout the value chain.
The Road Ahead
Going forward, digital technologies will continue to be instrumental in driving sustainability. Crucially, manufacturers will need to focus on new ways of capturing and analyzing data from multiple sources to gain actionable insights on their sustainability performance.
Generative AI holds promise in synthesizing and analyzing highly fragmented sources for ESG data as well as complex regulations to ensure compliance while making informed decisions.
Despite the promise of sustainable manufacturing, there are several challenges to address. Driving sustainability will require a company-wide agreement and a cultural shift among the C-suite and stakeholders.
Outside the company boundaries, this also requires concerted effort with partners and suppliers and entails encouraging them to be more sustainable by making sustainability credentials an important criteria in the supplier selection process. Furthermore, best in class manufacturers have a clear strategy in place and acknowledge that sustainability is not a one-off stunt but rather a continuous and transformational process to improve their operations and business models.
The true challenge is how to move beyond pilots and truly operationalize sustainability at scale and make a real impact in driving a sustainable future.
To find out more about sustainability in manufacturing, please visit our website.