Collaboration Is Key to Manufacturers' Decarbonization Goals
September 06, 2024
|
Manufacturing
September 06, 2024
|
Manufacturing
As businesses transition to a net-zero world, it's become increasingly clear that partnerships within and across all industries are key to addressing the global climate challenge. The manufacturing industry, which generates 30 percent of global greenhouse gas emissions and consumes almost 40 percent of the world's energy, has begun taking critical steps to create joint solutions to meet its electrification and decarbonization goals.1
"Some manufacturers are forming external partnerships and joint ventures to meet ambitious emissions goals for their products," according to Deloitte's 2024 manufacturing industry outlook. "By identifying key needs and seeking external collaborators with the knowledge to meet those needs, they're often making significant strides in product decarbonization.”2
Here are some exciting initiatives in the manufacturing sector aimed at hitting 2030 benchmarks toward the longer-term net zero goal:
First Movers coalition scales climate tech through collective demand
The First Movers Coalition (FMC) was created to help drive early market demand by 2030 for technologies that help reach a net zero outcome but have yet to scale.
The coalition is promoting critical, next-generation climate technology by harnessing members' collective purchasing power and accelerating its adoption, according to FMC's mission statement.3
The group operates the First Suppliers Hub, a platform to help source products and initiatives and fast-track their procurement and partnerships in these sectors: aluminum, cement and concrete, steel, aviation, shipping, and trucking. Members include about 100 global giants, including Apple, Boeing, Coca-Cola, Microsoft, and Volvo.
"The coalition has achieved scale across the world's leading companies and support from committed governments around the world to tackle the hardest challenge of the climate crisis: reducing the emissions from the sectors where we don't yet have the toolkit to replace unabated fossil fuels and swiftly reach net-zero emissions," said John Kerry, U.S. Special Presidential Envoy for Climate at a 2022 World Economic Forum press briefing.4
Automakers partner to align supply chain emissions reporting
Automakers DENSO, Ford, General Motors, Honda, Magna, and Toyota are onboarding almost 20,000 manufacturing facilities within their supply chains to the Manufacture 2030 (M2030) platform. This global initiative promises to advance the standardization of indirect greenhouse gas emissions reporting and carbon footprint reductions in service of cutting emissions by a minimum of 50 percent by 2030.
One of the latest steps towards reaching this ambitious goal is built around the Automative Climate Action Questionnaire, developed with the support of M2030 and the Suppliers Partnership for the Environment (SP). The questionnaire standardizes the template for reporting processes, resulting in supplier-partners gaining access to energy-oriented best practices, learnings, and experts.
"Effectively engaging stakeholders across the supply chain is key as companies in the automotive industry work toward long-term decarbonization goals," said Kellen Mahoney, a director of SP.5
Alliance offers tools for meeting net zero goals
Coordinated by the International Renewable Energy Agency (IRENA), the Alliance for Industry Decarbonization is a worldwide initiative that provides support to companies to implement decarbonization methods and blueprints that satisfy their individual countries' goals for net zero and decarbonization. The group's members "believe in the power of partnerships based on honest dialogue and concrete actions." 6
The coalition is led by Siemens Energy and Tata Steel, along with Knowledge Partner Roland Berger. The alliance spans nearly 80 private and public entities and stakeholders working in energy-intensive sectors, including Unilever, ABB, Huawei, Global Renewables Alliance, and the United Nations Industrial Development Organization.
Collaboration powers manufacturing's journey to a net zero future
While sustainability for supply-chain decision makers has become part of the conversation, there can be a disconnect between goals and actions. Research by Cognizant reveals that four in 10 manufacturers have not clearly aligned their energy, social, and governance (ESG) disclosures with "traceable actions" in their business or product strategy, and for more than six in 10, ESG data is being used less to inform internal strategy and more for external purposes.7,8
Regulations will likely drive additional collaborations. U.S. and Canadian companies doing business in Europe may need to prioritize policy updates to comply with laws like ReFuelEU for clean energy use in aviation and EU ETS for curbing greenhouse gas emissions. Compliance will entail additional cooperation among supply chain organizations, suppliers, and customers.9
While developing partnerships and collaborative efforts across manufacturing will take time and effort, the industry is far from alone. As Melissa Fifield, head of the BMO Climate Institute, has long said
, "Partnerships are the only way to achieve the system-level change needed to tackle the climate crisis."
1. Alliance for Industry Decarbonization, About page
2. Deloitte, 2024 manufacturing industry outlook, October, 2023
3. World Economic Forum, First Movers Coalition
4. Katherine Docampo, "First Movers Coalition: 120 Commitments for Breakthrough Industrial Decarbonization Technologies," World Economic Forum, May 2022
5. Manufacture 2030, Automotive giants partner with Manufacture 2030 for sustainable supply chain decarbonization, April, 2024
6. Alliance for Industry Decarbonization, About page
7. World Economic Forum, How manufacturing with AI can drive a sustainable future, June, 2024
8. Cognizant, Deep Green: How data, technology and collaboration will drive the next phase of sustainability in business
9. Frank McKay, Riskier Supply Chains Call for Better Data, Savvier Strategy, Industry Week, June, 2024
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As businesses transition to a net-zero world, it's become increasingly clear that partnerships within and across all industries are key to addressing the global climate challenge. The manufacturing industry, which generates 30 percent of global greenhouse gas emissions and consumes almost 40 percent of the world's energy, has begun taking critical steps to create joint solutions to meet its electrification and decarbonization goals.1
"Some manufacturers are forming external partnerships and joint ventures to meet ambitious emissions goals for their products," according to Deloitte's 2024 manufacturing industry outlook. "By identifying key needs and seeking external collaborators with the knowledge to meet those needs, they're often making significant strides in product decarbonization.”2
Here are some exciting initiatives in the manufacturing sector aimed at hitting 2030 benchmarks toward the longer-term net zero goal:
First Movers coalition scales climate tech through collective demand
The First Movers Coalition (FMC) was created to help drive early market demand by 2030 for technologies that help reach a net zero outcome but have yet to scale.
The coalition is promoting critical, next-generation climate technology by harnessing members' collective purchasing power and accelerating its adoption, according to FMC's mission statement.3
The group operates the First Suppliers Hub, a platform to help source products and initiatives and fast-track their procurement and partnerships in these sectors: aluminum, cement and concrete, steel, aviation, shipping, and trucking. Members include about 100 global giants, including Apple, Boeing, Coca-Cola, Microsoft, and Volvo.
"The coalition has achieved scale across the world's leading companies and support from committed governments around the world to tackle the hardest challenge of the climate crisis: reducing the emissions from the sectors where we don't yet have the toolkit to replace unabated fossil fuels and swiftly reach net-zero emissions," said John Kerry, U.S. Special Presidential Envoy for Climate at a 2022 World Economic Forum press briefing.4
Automakers partner to align supply chain emissions reporting
Automakers DENSO, Ford, General Motors, Honda, Magna, and Toyota are onboarding almost 20,000 manufacturing facilities within their supply chains to the Manufacture 2030 (M2030) platform. This global initiative promises to advance the standardization of indirect greenhouse gas emissions reporting and carbon footprint reductions in service of cutting emissions by a minimum of 50 percent by 2030.
One of the latest steps towards reaching this ambitious goal is built around the Automative Climate Action Questionnaire, developed with the support of M2030 and the Suppliers Partnership for the Environment (SP). The questionnaire standardizes the template for reporting processes, resulting in supplier-partners gaining access to energy-oriented best practices, learnings, and experts.
"Effectively engaging stakeholders across the supply chain is key as companies in the automotive industry work toward long-term decarbonization goals," said Kellen Mahoney, a director of SP.5
Alliance offers tools for meeting net zero goals
Coordinated by the International Renewable Energy Agency (IRENA), the Alliance for Industry Decarbonization is a worldwide initiative that provides support to companies to implement decarbonization methods and blueprints that satisfy their individual countries' goals for net zero and decarbonization. The group's members "believe in the power of partnerships based on honest dialogue and concrete actions." 6
The coalition is led by Siemens Energy and Tata Steel, along with Knowledge Partner Roland Berger. The alliance spans nearly 80 private and public entities and stakeholders working in energy-intensive sectors, including Unilever, ABB, Huawei, Global Renewables Alliance, and the United Nations Industrial Development Organization.
Collaboration powers manufacturing's journey to a net zero future
While sustainability for supply-chain decision makers has become part of the conversation, there can be a disconnect between goals and actions. Research by Cognizant reveals that four in 10 manufacturers have not clearly aligned their energy, social, and governance (ESG) disclosures with "traceable actions" in their business or product strategy, and for more than six in 10, ESG data is being used less to inform internal strategy and more for external purposes.7,8
Regulations will likely drive additional collaborations. U.S. and Canadian companies doing business in Europe may need to prioritize policy updates to comply with laws like ReFuelEU for clean energy use in aviation and EU ETS for curbing greenhouse gas emissions. Compliance will entail additional cooperation among supply chain organizations, suppliers, and customers.9
While developing partnerships and collaborative efforts across manufacturing will take time and effort, the industry is far from alone. As Melissa Fifield, head of the BMO Climate Institute, has long said, "Partnerships are the only way to achieve the system-level change needed to tackle the climate crisis."
1. Alliance for Industry Decarbonization, About page
2. Deloitte, 2024 manufacturing industry outlook, October, 2023
3. World Economic Forum, First Movers Coalition
4. Katherine Docampo, "First Movers Coalition: 120 Commitments for Breakthrough Industrial Decarbonization Technologies," World Economic Forum, May 2022
5. Manufacture 2030, Automotive giants partner with Manufacture 2030 for sustainable supply chain decarbonization, April, 2024
6. Alliance for Industry Decarbonization, About page
7. World Economic Forum, How manufacturing with AI can drive a sustainable future, June, 2024
8. Cognizant, Deep Green: How data, technology and collaboration will drive the next phase of sustainability in business
9. Frank McKay, Riskier Supply Chains Call for Better Data, Savvier Strategy, Industry Week, June, 2024
This is part 2
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PART 3
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