Manufacturing organizations are setting ambitious sustainability targets for the coming decade with 20% aiming for carbon-neutral operations and two in five (40%) setting their sights on 100% renewable operations by 2030.
This is according to a new report from the Capgemini Research Institute entitled, Sustainable operations: A comprehensive guide for manufacturers.
It reveals that only 51% of manufacturing organizations globally are aiming to align with the temperature contribution target of the Paris Agreement. Within this cohort, Germany (68%) and France (67%) are leading the pack with respect to their manufacturers being on track to achieve the targets.
The report also reveals that manufacturers are boosting their sustainability agenda with technology, as more than half (56%) of organizations are currently prioritizing the deployment of digital technologies for sustainability.
According to the report, strong progress in sustainable manufacturing is helping organizations realize the benefits of sustainability initiatives. 89% of organizations implementing sustainability initiatives see an enhanced brand reputation and 81% noted an improved environmental, social and governance (ESG) rating of their company. 79% achieved improved efficiency and productivity and more than half reduced packaging costs and boosted employee motivation levels. The report also finds that 9 in 10 organizations have seen a reduction in waste (98%) and greenhouse gas emissions (94%) as a result of implementing sustainability practices — both of which are top priorities for manufacturers.
However, despite high ambitions, only a few are on track to becoming sustainable manufacturers. According to the report, the manufacturing sector lacks a comprehensive focus on sustainability, and the maturity of sustainability practices remains low: only 10% of organizations employ a holistic approach to sustainable manufacturing.
Across industries, consumer products are the most sustainable sector (15%), followed by industrial and capital goods (11%) and automotive (10%). Furthermore, only 11% of sustainability initiatives are actively being scaled across organizations and just one in five agree that sustainability is fully integrated into their manufacturing strategy.
While 38% of organizations are prioritizing Scope 1 emissions (direct emissions that the organization owns or controls), even fewer are focusing on Scope 2 (indirect emissions such as generating the electricity used by the organization) and Scope 3 (all other indirect emissions that occur in a company’s value chain), neglecting other carbon drivers beyond internal processes.