Manufacturing firms should address gap in implementing sustainability programmes
Around 56% were dissatisfied or moderately satisfied with their sustainability progress.
Whilst manufacturing firms have goals in place to address sustainability needs in their operation, Kearney found that there is a “huge gap” in turning their strategies into practice.
In a study of 50 manufacturing companies, Kearney said all the respondents indicated that sustainability is integral to their corporate strategies but to varying degrees.
Around nine in 10 also said that these strategies encompass the three definitions of sustainability, covering the planet, people, and profit. Strategies they employed include cutting carbon dioxide emissions and ensuring an employee-friendly working environment.
“Although the C-suites for most manufacturing companies understand the need to focus on sustainability, there’s a huge gap when it comes to putting strategies into practice,” the report read.
Of those surveyed, 56% were dissatisfied or moderately satisfied with the progress of their respective corporate sustainability programmes. Only 44% said that they were satisfied with the progress.
“Our study shows that although the top floor and the shop floor at many manufacturing companies have embraced sustainability, the main differences are in how comprehensively and consistently the measures are implemented,” Kearney said.
“Over the next few years, the companies that are not keeping pace will need to work on closing this gap. Those that take an integrated approach to sustainability and view it as an opportunity to improve their products and processes will be more successful and more competitive in the long run,” it added.
Meanwhile, Kearney also found that some factories are lagging based on sustainability indicators. The frontrunners are seeing significant improvements in the indicators in all the definitions of sustainability which resulted in “very healthy earnings.”
It also said that the frontrunners reduced their carbon emissions as they use green energy more efficiently, compared with their energy consumption.
Kearney also identified the difference in the approach between pioneering companies and those lagging behind.
First is the provision of resources and budget for the sustainability goals as many companies do not provide such despite recognising its importance. Those who have turned sustainability programmes into practice know that allocating budget and resources would ensure that the strategies will be implemented.
The second difference is in the conduct of analysis on the value chain of a company which should be prioritised. Kearney said that spotting the critical factors in the value chain and improving them, and taking steps to improve sustainability is vital. It added that conducting analysis will guarantee that the right issues are addressed and objectives are met through the defined measures.
Companies should take a comprehensive approach to sustainability, noting that pioneering companies are going for a broader approach covering all three dimensions of sustainability, whilst those lagging focus heavily on the planet, and cutting consumption of energy and other resources.
It is also important to have clear performance indicators, Kearney said, adding that lagging companies do not translate their sustainability goals into “specific and measurable” performance indicators.
Developing sustainable products, which are being practised by pioneering companies, is vital too. It noted that most measures by lagging companies are slow to improve sustainability in their manufacturing of products.
The pioneering firms, which integrated sustainability in their product development, use biodegradable materials or design products that are easier to repair to last longer.
