The most efficient manufacturers worldwide generate profits and provide value for customers while using minimal resources, including energy, scarce minerals and materials, and freshwater. With electricity and commodity costs at record highs, there are many reasons why companies are pursuing long-term business strategies focused on resource efficiencies and sustainability. Global regulations and stakeholders, including investors, employees, and customers, are also demanding that businesses respond to climate change. According to the World Economic Forum (WEF), roughly 40% of global energy consumption and more than 30% of global Greenhouse Gas (GHG) emissions come from the industrial sector processes. Unsurprisingly, manufacturers are looking for cost-effective ways to reduce their carbon footprint.
In this article, you’ll learn how to make manufacturing more sustainable, helping industrial players and technology suppliers understand what it takes to run low-carbon processes. And to better articulate these industrial sustainability best practices, real-world examples will be used throughout this post.
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Figure 1: Industrial & Manufacturing Climate Change Leaders (Decarbonization Commitment)
Purchasing renewable electricity is one of the fastest ways for companies to reduce carbon emissions.
When it comes to sourcing renewable energy for manufacturing, companies have several options:
In 2017, only 2% of Schneider Electric’s energy sources were renewable. By 2021, through PPAs, Energy Attribute Certificates (EACs), green tariffs, and on-site projects, the industrial company increased global renewable energy use to 82%. Schneider Electric has pledged to use 100% renewable energy by 2030.
Eighty percent of a product’s environmental footprint is established in the design phase, making investments in this area critical to industrial sustainability initiatives. Material sourcing and eco-design refer to the programs and technology platforms for improving procurement practices, managing upstream suppliers, selecting sustainable materials, encouraging eco-design in products, conducting Life Cycle Assessments (LCA) on products, and reducing carbon emissions from the downstream use phase of products.
Some ways that manufacturers can implement material sourcing and eco-design best practices are:
By carrying out LCAs for all of its most important products, Hitachi quantitively measures the environmental impact of each product. Environmental factors include:
In FY2021, Hitachi achieved a 28% reduction in carbon emissions per unit of products and services, compared to the base year of FY2010, exceeding its annual reduction target of 21%.
Learn the relationship between digital transformation and manufacturing sustainability by reading #40 on our list of 74 technology trends for 2023.
This sustainability area addresses how well a manufacturer uses Industry 4.0 or Fourth Industrial Revolution (4IR) technologies to reduce carbon emissions in operational processes. CO2-reducing technologies include (but are not limited to):
The most sustainable manufacturers have a World Economic Forum (WEF) “advanced lighthouse” or “sustainability lighthouse” factory (or factories) using 4IR technologies for reducing energy use, carbon emissions, water consumption, and waste.
4IR technologies enable manufacturers to measure and monitor their energy and carbon footprint across production and logistics processes, while simulating different product and manufacturing strategies, such as using digital twins. This helps operators understand where production and energy inefficiencies are within their operations while providing decision analysis and recommendations for improved sustainability and cost savings.
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Bosch is sustainably producing its home appliance and mobility offerings by combining IoT connectivity with AI. Moreover, using its Energy Platform, the company reportedly reduced its emissions by 10% in 2 years at its Homburg, Germany facility. The Energy Platform is designed to optimize industrial equipment and processes in manufacturing operations. The solution is being used at 100+ Bosch locations around the world.
For circularity and waste reduction, reject a “take-make-waste” economy and establish regenerative practices for product design, manufacturing, and use. Examples include:
ABB is one of the best implementers of circularity and waste reduction efforts. The manufacturer primarily uses steel, copper, aluminum, oil, and plastics in production, most of which are reclaimable at the end of a product’s life.
ABB has laid out its bold ambitions for 2030, which include the following:
Green buildings and vehicles are other key areas for reducing a company’s Scope 1 and 2 emissions. This means industrial manufacturers might consider net-zero emission targets for production facilities and support methods for reducing their carbon footprint due to fleet vehicles (e.g., Electric Vehicles (EVs)).
To meet this sustainability requirement, manufacturers should:
Siemens has about 40 buildings that are LEED certified, including its Munich, Germany-based headquarters. The company currently has roughly 37 sites that are net-zero emissions, and by 2030, the industrial conglomerate aims to have a net-zero carbon footprint for all its production facilities and buildings worldwide. For reducing fleet emissions, Siemens has committed to the EV100 group with a goal of transitioning 100% of its fleet to EVs by 2030.
Some of the most sustainable manufacturers, such as Schneider Electric, Siemens, and Hitachi are global sustainability leaders for their reporting and governance practices. This includes the following best practices:
Schneider Electric releases quarterly, half-year, and annual sustainability reports that provide extensive insights into the company’s sustainability efforts.
By 2025, Schneider Electric has committed to:
Industrial manufacturing firms are all at different stages of implementing responsible environmental strategies. To learn more about what some of the top companies are doing to tackle climate change, download ABI Research’s Sustainability Assessment: Large Industrial Solution Providers competitive ranking.