Only half of manufacturers on track to reach Paris Agreement goals: Capgemini

This is according to a new report from the Capgemini Research Institute entitled 'Sustainable operations: A comprehensive guide for manufacturers' which shows that only 51 per cent of manufacturing organisations globally are aiming to align with the temperature contribution target of the Paris Agreement. 

Within this cohort, Germany (68 per cent) and France (67 per cent) are leading the pack with respect to their manufacturers being on track to achieve the targets. The Capgemini Research Institute surveyed 1,000 executives among large manufacturers across business functions and regions. 

Out of these, 480 organisations surveyed were represented by an executive from the business-facing side and one from sustainability functions. In addition, the researchers conducted one-on-one interviews with 15 senior sustainability executives from the industry's major players. The report also shows that manufacturers are boosting their sustainability agenda with technology as more than half (56 per cent) of organisations are currently prioritising the deployment of digital technologies for sustainability. 

According to the report, strong progress in sustainable manufacturing is helping organisations realise the benefits of sustainability initiatives. A total of 89 per cent of organisations implementing sustainability initiatives see an enhanced brand reputation and 81 per cent noted an improved environmental, social and governance (ESG) rating of their company. 

About 79 per cent 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 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 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 per cent of 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). 

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. "There is a paradox in the fact that only 11 per cent of green sustainability initiatives are actively being scaled across organisations while the benefits realised by companies adopting sustainability initiatives are huge," said Corinne Jouanny, Chief Innovation Scaling Officer at Capgemini Engineering. 

"We are seeing growing investments in digital technologies by manufacturers who are forming partnerships with established technology firms and startups to further develop their sustainable solutions. This is leading organisations to a full range of opportunities to reconcile profitable growth and sustainability," she said. According to the report, manufacturers need to go beyond existing lean and green practices -- reduce, reuse, recycle -- to a more comprehensive approach, one that incorporates recover, redesign and remanufacture. 

While most organisations focus on direct emissions to achieve their carbon-neutrality goal, much of the carbon footprint for manufacturers lies within indirect emissions of their organisation, and that of their value chain.