Why manufacturing needs data-led sustainability goals

Tuesday, 27 September, 2022

Why manufacturing needs data-led sustainability goals

As a society, we’re all working towards shared sustainability goals. Whether that’s to limit global warming as outlined in the Paris Agreement, to make the switch to electrified transport or as part of nation-specific net zero targets, the world shares a common objective. But industry also has its part to play. In addition to focusing on global goals, manufacturers should have their own sustainability targets and crucially, these must be led by data. Anders Dellblad, Manager of Sustainable Supply at Sandvik Coromant, shares his advice for building achievable, impactful sustainability goals.

The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman. In it, Friedman defines the sole purpose of a corporation as to create the greatest profit possible for shareholders. Today, this explanation is dated and arguably irresponsible.

Businesses still want their efforts to generate profit, that’s non-negotiable; however, profit cannot come before people and the planet. Companies of all sizes, from all industries, are now focusing on another non-negotiable of business — sustainability.

Corporate sustainability goals often align with published, globally endorsed agreements such as those of the Paris Agreement and the United Nation’s Sustainable Development Goals (SDGs). However, it is also important to develop goals specific to your business that will help to improve its sustainability credentials while simultaneously supporting business growth. So how should manufacturing businesses go about creating their own objectives?

Make them personal

Ensuring sustainability goals reflect and influence a business’s core processes is key. When forming a new sustainability policy, businesses are at risk of greenwashing — when a company spends time and money on marketing itself as environmentally friendly, rather than actually minimising its environmental impact.

So, where can manufacturers start? There is still some low-hanging fruit that any business can combat. For instance, setting up small-scale recycling projects or limiting paper in business meetings are steps virtually any business can take. These are good entry points for introducing sustainable actions into a workplace, but they are not adequate to constitute a full sustainability strategy for manufacturing and engineering firms.

Ideally, sustainability efforts should target business function improvements that directly relate to an organisation’s position in the market. At Sandvik Coromant, for example, our lifeblood is developing innovations for metal cutting — tools and inserts, such as turning grades and industrial drill parts.

Because our business relies so heavily on the sale of tools, we recognised we needed to make this area more sustainable. For several years, the company has offered a resilient carbide recycling program that allows customers to sell their used tools back to Sandvik Coromant so that they can be recycled. We also offer customers a tool reconditioning service, so that their worn but still usable tools can be returned to their original condition. Both of these services feed into our sustainability goal of becoming more than 90% circular by 2030.

Ultimately, aligning sustainability goals with your core business model will ensure their integrity, creating a connecting line between who you are and what you do. Having goals that support a company’s existing model for profitability will make them easier to accept and integrate enterprise-wide.

Get the facts right

Sustainability goals need to be grounded by measurable facts. There are several frameworks manufacturers can take inspiration from, such as the WWF’s Science Based Targets, which provide companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals. Targets are considered ‘science-based’ if they align with what the latest climate science deems necessary to meet the goals of the Paris Agreement — limiting global warming to below 2°C above pre-industrial levels and pursuing efforts to reduce warming to 1.5°C.

Another important framework is the UN’s SDGs. Each of these 17 goals has specific targets that need to be achieved by 2030, including building sustainable communities, investing in innovation and infrastructure, and ensuring responsible consumption and production. It is clear that primary responsibility for achieving the SDGs lies with governments, but it is also widely understood that they will not be able to make the required level of change without the help of business. After all, business activity — both positive and negative — touches upon all the goals.

To track companies’ net contribution to the UN SDGs, they are scored by their positive or negative contribution to each of the 17 goals. Specifically, the framework centres on a discussion paper that was developed in partnership with the OECD in 2018. Company policies, operations, products and services, and practices are analysed according to reported and publicly available information.

Time to analyse

Creating sustainability goals is critical, but without analysing progress and acting accordingly, a business will limit their effectiveness. In addition to looking at external sources for inspiration, data also provides a framework for these goals and is a key driver to keeping businesses accountable.

It’s important a business first analyses where it is now — how much does it recycle? How much waste does its production process generate? Does it use any renewable forms of energy? Most manufacturing organisations will have several pieces of software that can provide this information, from manufacturing execution systems (MES), enterprise resource planning (ERP), right through to supervisory control and data acquisition (SCADA). Understanding your starting point, and evidencing it with data, will help inform your key performance indicators (KPIs).

Data shouldn’t only be assessed when forming new goals. Manufacturers should continually monitor their progress at regular intervals and use their findings to inform whether they’re on track to succeed, or if more action should be taken. Again, good software platforms should be able to provide historical data using Internet of Things (IoT) technologies.

Already, society is working together to meet many sustainability goals. The onus is also on business, especially those in the manufacturing industry, to craft their own goals that reflect their business. Having collective goals, and working to achieve them, is critical. However, no two companies are alike and it’s equally essential that manufacturers of all sizes take time to create their own, personalised sustainability goals that drive efficiency and contribute to industry’s greener future.

Related Articles

Reaching a grand alliance in energy

This opinion article discusses the COP 28 agreement towards an accelerated energy transition, and...

Better data is the key to meeting ESG standards

As we strive for a future marked by accountability, the selection of data partners will...

Can I see your (product) passport please!

Digital Product Passports that allow consumers to read up on the product's sustainability...

  • All content Copyright © 2024 Westwick-Farrow Pty Ltd