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Focus on sustainability
Embrace sustainability management as a part of the core business strategy.
Over the past few decades, we’ve witnessed dramatic shifts in global temperatures and extreme weather conditions. These have not only impacted our environment, but also our society, health, and economies. This is why sustainability management has gained importance.
While sustainability has been part of corporate strategy for some time now, business leaders have until recently hesitated to incorporate it into the core business strategy as it was seen as not yielding ‘tangible’ results. What has changed for leaders to have embraced sustainability as a business imperative? Let’s look at why and how manufacturing, considered a top polluter accounting for 36% of global emissions, is embracing this change.
Driving value through sustainability
Sustainability – a compliance or business imperative?
Since the industrial age, manufacturers have been innovating and adopting new technologies according to changing market demands. Now, as the manufacturing industry continues to rapidly evolve, keeping sustainability at the core, organizations are driving sustainability imperatives to reduce costs, increase scale, and gain visibility throughout their supply chains.
Leading manufacturing organizations are taking big steps to reduce carbon emissions across their value chain and, as a result, what was initially perceived as a reporting and compliance exercise has today become an absolute business imperative. One of the most important reasons that has led companies to opt for sustainability is the pressure that governments, regulators, banks, and environmentally conscious consumers have put on them.
Controlling carbon emissions
How manufacturers can control their carbon emissions.
Most manufacturing processes contribute directly to one or more of Scope 1, Scope 2, and Scope 3 emissions. As manufacturers continue to realize the need to reduce carbon emissions and address sustainability issues, understanding the corporate footprint and different types of emissions will help them achieve their climate change goals:
Scope 1: owned, non-electrical fleet of vehicles are a few examples that directly contribute to Scope1 emissions. While Scope 1 emissions are unavoidable in most manufacturing processes, manufacturers can look to optimize the performance of equipment they own, thus lowering fuel consumption and thereby the direct impact on Scope1 emissions.
Scope 2: indirect emissions arising from the purchase of energy for heating and cooling and lighting. Increased use of air-conditioning, heating, or lighting at a facility such as a large office building, leads to an increased indirect emission as the power utility needs to burn more fossil fuels to generate the energy to meet the increase in demand. It is estimated that both commercial and residential buildings contribute to 17.5% of global GHG emissions. Regulating energy consumption for heating, cooling, and lighting will substantially reduce Scope 2 contribution.
Scope 3: Solving Scope 3 carbon measurement requires a value chain–oriented approach because up to 90% of an average organization's resource footprint occurs in the value chain—either upstream (through the supply chain) or downstream (in the product use phase) of its own operations. The problem is that most organizations don't currently have access to the data they need to measure their impact in this space. Without data, they can't know the full impact of each supplier in their supply chain or understand the cost and climate impacts of changing suppliers.
Sustainability, considered a non-negotiable strategic requirement for businesses, will help manufacturers operate successfully in the future.
Today, most successful manufacturers recognize that sustainability determines how a product is produced, marketed, and purchased. The following steps help manufacturers drive sustainability across their entire supply chains:
Minimize carbon emissions: Replace fossil fuels with lower carbon energy sources such as biomass, recovered heating, and heat pumps to reduce direct emissions. Manufacturers can switch to renewable energy sources such as solar and wind energy for reduced indirect footprint from energy consumption. They can move core IT systems to AWS cloud to reduce energy consumption as efficient processors and renewable energy power AWS data centers.
Optimize energy and water usage: Deploy energy management systems that can not only monitor energy consumption with utmost accuracy but also adjust and optimize it based on real-time consumption patterns. Cloud-based, IoT-powered systems can collect energy and water consumption data at scale and AI/ML algorithms running on cloud can optimize the consumption of energy and water resources.
Reduce wastewater generation: Leverage cloud-hosted IoT-based systems that can track and reduce the generation of wastewater at scale.
Implement sustainable supply chains and sourcing practices: Work with suppliers that are willing to take positive steps towards a green supply chain, promote circularity by re-using and re-purposing assets as much as possible, optimizing fleet operations. Cloud-hosted supply chain management systems can help monitor consumption and deliver greener supply chains.
To drive sustainable imperatives, manufacturers should integrate sustainable efforts across all levels of products, processes, and systems. These sustainable practices will not only lower costs accrued from reduced consumption but also provide significant financial and environmental benefits.
Embracing the cloud is helping enterprises deliver on new commitments: carbon reduction and innovation at scale.
As a result of consumer demands and sustainability regulations, manufacturers are including sustainability as a business and strategic focus area. One of the most effective ways to deal with carbon emissions is to shift to cloud. Cloud data centers are known to use less energy compared to on-premise solutions. Cloud-based services are also known to reduce energy consumption by streamlining the production cycles of manufacturing units.
Companies can also adopt cloud solutions to control their emissions and reduce the environmental impact of business operations. For instance, IoT solutions such as TCS CleverEnergy™, help manufacturers monitor and optimize their direct energy consumption.
They can also track and mitigate supplier-sourcing risks with digital solutions powered by sustainability data ecosystems, like TCS Envirozone™. This aids procurement decisions for sustainable supply chains and promotes recycling and maximum re-use of materials and products to help the circular economy.
What’s more, companies can monitor and optimize the performance of boilers and turbines with cloud solutions like TCS IP2™. This results in reduced consumption of fossil fuels and lowered carbon emissions.