Only one-in-10 sustainability being scaled by manufacturers

21 June 2021 4 min. read

While sustainability can bring huge benefits to manufacturers, a minority of 11% are scaling their sustainability initiatives at present. Meanwhile, almost half of the sector is yet to commit to the goals of the Paris Agreement, and fewer than 40% plan to reduce their use of natural resources in the coming decade.

The global pandemic seems to have put sustainability efforts on the backburner across the industrial spectrum. For example, 31% of British banks recently cited Covid-19 and industry demands as holding sustainability efforts back, while only 45% said they were planning for sustainable initiatives in the near future.

Now, a new study from Capgemini has show that manufacturers have also become sluggish when it comes to their sustainability initiatives. In spite of some relatively lofty ambitions among respondents, only around one-tenth of industrial leaders told Capgemini they were employing a an all-encompassing approach to sustainable manufacturing, or looking to scale their pre-existing initiatives.

Foremost priority of manufacturing operations

The research found that of 1,000 executives among large manufacturers across business functions and regions, a huge 89% had enjoyed an enhanced brand reputation from their sustainability initiatives, while 79% also delivered improved efficiency and productivity while reducing costs. As a result, it is not hard to see why manufacturing organisations are currently talking a big game on sustainability targets – with 20% aiming for carbon-neutral operations and a further 40% setting their sights on 100% renewable operations by 2030.

When it comes to walking that talk, however, Capgemini found an industry which is currently treading water at best. According to the report, the manufacturing sector lacks a comprehensive focus on sustainability, and the maturity of sustainability practices remains low. As it stands, just 10% of organisations employ a holistic strategy regarding sustainable manufacturing, while just one-fifth of respondents agreed that sustainability was fully integrated into their manufacturing strategy.

The most popular approach was found to be ‘Lean Manufacturing,’ which concentrates on reducing waste from the processing of new resources, at 64% of respondents. However, ‘Sustainable manufacturing’ – focusing on reducing, reusing, recycling, recovering, redesigning and remanufacturing to cut down on waste and require less use of new resources – is still a distant prospect for 90% of firms. At the same time, what companies were accomplishing was shown to still be at an early stage of maturity. Only 11% of sustainability initiatives were actively being scaled across organisations.

Prioritization of various environmental goals

At the same time, only 51% of organisations are aim to align targets with the goals of the Paris Agreement. This means that almost half of manufacturers are failing to commit to changes which would have major material benefits for people and the environment withing a matter of years. Air pollution, for example, causes seven million deaths worldwide every year and meeting the goals of the Paris Agreement could save about a million lives a year worldwide by 2050 through reductions in air pollution alone. However, reducing particulate and water pollution were a priority for only 45% and 40% of respondents respectively.

At the same time, only around one third of companies said they were prioritising a reduction in their use of natural resources – something Capgemini’s study suggests might be due to the lack of specific financial penalties regarding the area. The growing importance placed on sustainability by ‘purpose driven consumers’ has long been touted as a force which might persuade companies to take more stringent measures on sustainability. However, this impact might have been overstated – and without more specific and binding regulatory changes, many firms may simply continue to put off meaningful change for some time to come. The study asserted that technology may be key to turning this around, however.

”The benefits realised by companies adopting sustainability initiatives are huge,” commented Corinne Jouanny, Chief Innovation Scaling Officer at Capgemini Engineering. “Technologies and data are critical to accelerating the sustainability agenda. We’re seeing growing investments in digital technologies by manufacturers who are forming partnerships with established technology firms and start-ups to further develop their sustainable solutions. This is leading organisations to a full range of opportunities to reconcile profitable growth and sustainability.”