scorecardresearch

Only 51% global manufacturing firms aligning with Paris climate pact

Only 10 per cent organisations employ a holistic approach to sustainable manufacturing. Across industries, consumer products is most sustainable sector (15 per cent), followed by industrial and capital goods (11 per cent) and automotive (10 per cent), says a new report by the Capgemini Research Institute

Despite high ambitions, only a few are on track to becoming sustainable manufacturers Despite high ambitions, only a few are on track to becoming sustainable manufacturers

Only 51 per cent of manufacturing organisations globally are aiming to align with the temperature contribution target of the Paris Agreement, says a new report by the Capgemini Research Institute. "There is a paradox in the fact that only 11% of green sustainability initiatives are actively being scaled across organisations, while the benefits realised by companies adopting sustainability initiatives are huge," comments Corinne Jouanny, Chief Innovation Scaling Officer at Capgemini Engineering.

Despite high ambitions, only a few are on track to becoming sustainable manufacturers. Manufacturing lacks a comprehensive focus on sustainability, and the maturity of sustainability practices remains low. "Only 10 per cent organisations employ a holistic approach to sustainable manufacturing. Across industries, consumer products is the most sustainable sector (15 per cent), followed by industrial and capital goods (11 per cent) and automotive (10 per cent)," it said.

Furthermore, only 11 per cent of sustainability initiatives are actively being scaled across organisations and just one in five agree that sustainability is fully integrated into their manufacturing strategy.

"While 38 per cent organisations are prioritising Scope 1 emissions (direct emissions that the organisation owns or controls), even fewer are focusing on Scope 2 (indirect emissions such as generating the electricity used by the organisation) and Scope 3 (all other indirect emissions that occur in a company's value chain), neglecting other carbon drivers beyond internal processes," the report said.

Germany (68 per cent) and France (67 per cent) are leading the pack with respect to manufacturers being on track to achieve these targets, says the report.

In their target for the coming decade, 20 per cent manufacturing organisations are aiming for carbon-neutral operations and two in five (40 per cent) are setting their sights on 100 per cent renewable operations by 2030.

Manufacturers are boosting their sustainability agenda with technology, it said, adding that 56 per cent companies are currently prioritising the deployment of digital technologies for sustainability.

Strong progress in sustainable manufacturing is helping organisations realise its benefits, says the report. "89 per cent organisations implementing sustainability initiatives see an enhanced brand reputation and 81 per cent noted an improved environmental, social and governance rating of their company. Around 79 per cent achieved improved efficiency and productivity, and more than half reduced packaging costs and boosted employee motivation levels," it said.

Nine in 10 organisations have seen a reduction in waste (98 per cent) and greenhouse gas emissions (94 per cent) as a result of implementing sustainability practices -- both are top priorities for manufacturers.

Also read: In Good Company