SUSTAINABILITY PARTNER CONTENT
COP26 marks a historic moment for humankind Making <1.5°C work: Sumeet Ladsaongikar, Partner in Kearney’s Strategic Operations Practice, explains how to drive sustainability through manufacturing
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Making a change Multiple studies by the IPCC and other bodies offer compelling evidence that implementing known industry-specific and cross-industry levers can significantly reduce emissions. And the evidence also suggests that energy intensity in industry could be cut by around 25% from today’s levels through wide-scale upgrade, replacement, and deployment of bestavailable techniques (BAT) - especially in countries where these are not currently used, and in non-energy-intensive industries. In our experience, these initiatives often help deliver a marked improvement in cost performance too - particularly as technologies evolve and start generating a positive financial impact. We have built on our deep expertise in operations and supply chain - gained over hundreds of manufacturing site improvement projects - and have created a framework to assess the maturity of manufacturing plants when it comes to key sustainability practices on environmental and social standards.
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ALL IMAGES: KEARNEY
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ot long ago, government leaders gathered at the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow to make policy commitments that will shape the future of our planet. The world now stands at a historic crossroads: our governments must act decisively to cut GHG emissions to net zero by mid-century, and control average temperature rise, or to face calamitous consequences such as the irreversible melting of the Antarctic ice sheet and a rise in average sea levels of more than 0.07 inches per year from 2060 and beyond. COP26 focused on four core objectives: first, to secure net zero and keep 1.5°C within reach; second, to urgently adapt to protect communities and natural habitats; third, to mobilise finance; and fourth, to work together to deliver. Over the coming weeks and months, much of the attention will be on the government action needed to achieve these goals, but what really matters is how those commitments are executed at the gemba (at the place of action). Manufacturing-based industry accounts for around 30% of direct and indirect global GHG emissions, as shown in Figure 1. Given the size of this contribution, both manufacturing companies and individual plants must play a leading role in tackling emissions if we are to respond positively to this pivotal moment in our history.
The framework features four levels of maturity (Stages 1—4), spanning 19 sub-dimensions of environmental and social standards, aligned to the Global Reporting Initiative (GRI). However, the emphasis of this approach is on practice maturity, unlike the GRI, which often focus on reporting maturity. This ability to assess maturity is critical to identifying initiatives that can significantly reduce emissions. Overall sustainability strategy maturity assesses the extent to which sustainability is embedded in the business strategy and in product and process technology for the plant. In addition, it looks at the portfolio of initiatives, KPIs, adoption of novel technologies etc. to achieve sustainability objectives. Each individual topic area is assessed under environmental standards both on practice maturity and reporting maturity, with a primary focus on the practices adopted. For example, on materials, the assessment includes the maturity of sustainability practices in a plant along the following subdimensions: a) Renewable/sustainable nature of materials used (including packaging) in production b) Extent to which the sustainability of materials influences product design c) Understanding of material mass-balance in the plant with continuous improvement programmes to tackle waste and improve yields
