Sustainability in Manufacturing

What is sustainable manufacturing?

Over 50% of the world's emissions come from the extraction, processing and manufacturing of materials, fuels and food. If more businesses switched to more sustainable production processes, decarbonization could be accelerated substantially.

The aim of sustainable manufacturing is to produce goods in a way which minimizes negative environmental and social impacts, considers a product’s full life cycle, uses natural resources more efficiently, conserves energy, and is safe for a company’s stakeholders, including employees, communities and consumers.

By focusing on sustainable production, manufacturers can optimize their systems, create more sustainable products and future-proof their business lines by reducing carbon-intensive business practices. As carbon pricing begins to seriously impact industrial supply chains, an important first step is to prioritize carbon emissions reporting. 

What are some of the aspects manufacturers need to prioritize when considering sustainability in their production processes?

• Resource use: analyzing resource efficiency by considering which raw materials should be used in products — and whether virgin materials can be replaced with recycled or more renewable alternatives — is an important step on the sustainability manufacturing journey. Adopting lean manufacturing strategies is another way to boost efficiency.

• Waste management strategies: minimizing waste and pollution by considering a product’s full life cycle — and designing for sustainability at the earliest production stage — will also improve resource efficiency and lead to a more sustainable end-of-life product disposal. Similarly, by choosing renewable resources, such as electricity or raw materials — and reducing energy consumption — companies’ environmental impact will likely significantly reduce.
• ‍Social responsibility: Companies should also prioritize the social aspects of sustainable manufacturing alongside environmental considerations, including identifying any risks to the local environment or human health, including employees and local communities.

Why is sustainability in manufacturing important?

Focusing on sustainable production has a range of benefits for manufacturers:

Increasing efficiency and reducing costs

By analyzing production processes in depth to improve sustainability, efficiency is likely to significantly improve — optimized production typically leads to fewer steps in the process and therefore lower carbon emissions, reduced energy use, lower production and labor costs, less pollution and waste and a safer working environment. 

As technologies continue to evolve, it is important for companies to keep exploring which approaches and innovations can help them maximize resource efficiency, keep costs down and reduce their environmental impact.

Example: Subaru

‍Car manufacturer Subaru has a US manufacturing facility and four plants in Japan which have sent zero waste to landfill since 2005. They achieved this by closely examining materials being used and analyzing manufacturing processes to make them more efficient.

Subaru also worked with suppliers to enable parts to be shipped in reusable containers. Waste that cannot be used in these plants is incinerated for energy, and Subaru also claims that 96% of its vehicle components can be recycled or reused.‍

Potential new business opportunities

The business landscape is changing, and to remain competitive companies must become increasingly climate-aware. Providing low-carbon goods with verifiable product carbon footprints can provide a competitive edge. 

81% of financial institutions assess climate-related portfolio risks — and companies are increasingly requesting climate-related information from their suppliers. For example, Unilever’s Climate Promise strategy engages directly with suppliers, aiming to help them reduce emissions by committing to reduction targets. It also requires Unilever suppliers to regularly share information on their progress.

It is clear that the businesses of the future need net-zero global supply chains. Environmental regulations are ramping up, so building sustainability into production processes is likely to boost manufacturers’ business viability. 

As circular economy business models increasingly become the norm, designing production processes for re-manufacturing allows for improvement in areas such as recycling, reparability, refurbishment, assembly and disassembly. Adopting a ‘cradle-to-cradle’ approach, which considers all stages of a product’s life cycle, will considerably reduce environmental impact and help companies reach increasingly sustainability-focused customers, increasing their competitive advantage. 

Example: Syensqo

Electric cars have a high metal content. Circular economy strategies to enable recovery, re-use and recycling are crucial in areas such as batteries. However, traditional recycling can fail to yield high-quality metals required for electric vehicle batteries.

This is why the Syensqo consortium is working to create a closed loop for end-of-life battery metals, and ensure a secure supply source for battery materials such as cobalt, nickel and lithium. Working with Veolia’s existing technology to recycle electric vehicle batteries, the aim is to collect, dismantle and process end-of-life batteries mechanically, and to extract metals contained within through hydrometallurgy.

Adhering to upcoming legislation

Companies who choose to go beyond compliance will likely benefit in the race towards decarbonization. Environmental and sustainability legislation is becoming increasingly stringent — for example, the U.S. Foreign Pollution Fee Act (FPFA) is one of several bills being tabled which could dramatically impact high-carbon domestic imports. The Biden Administration has also announced a sweep of measures to reduce industrial and manufacturing greenhouse gas emissions in the United States.

In Europe, the EU Carbon Border Adjustment Mechanism (EU CBAM) will impact importers of certain metals, hydrogen, cement, fertilizers and electrical energy, who face fines for non-compliance.

Beyond imports, the EU’s Corporate Sustainability Reporting Directive (CSRD) will require large and listed companies to publish regular reports on their social and environmental risks, and how their activities impact people and the environment. Businesses will have to follow the European Sustainability Reporting Standards (ESRS) framework in their reporting, which requires companies to analyze their broader societal and environmental context, as well as the effects of ESG factors on the company’s financial performance. 

With the ESRS framework, businesses will have to report more openly and transparently than ever — if businesses do not follow the ESRS framework adequately, they could face a range of penalties, including fines.

Boost stakeholder trust

ESG considerations and improved sustainability are increasingly considered to be a deal-breaker for a range of stakeholders, including customers and consumers. Reporting on all categories of carbon emissions is best practice and becoming commonplace, as investors and stakeholders understand the need to account for emissions across the value chain.

Putting sustainability at the core of a manufacturer's business will strengthen their brand and build public trust — as long as communicating on sustainability progress avoids greenwashing by being accurate and transparent.

What is an example of sustainable metals manufacturing?

Traditionally, metal manufacturing has a significant environmental impact — it is an energy-intensive process, often relies on burning fossil fuels and, if waste is not properly managed, can cause the release of harmful pollutants in the atmosphere, air and soil. 

While modern metal manufacturing still faces environmental challenges, processes have become more energy-efficient, renewable energy sources are increasingly used, while waste management and habitat restoration efforts have also, in general, improved. 

Metals such as aluminum, steel, brass, and titanium, are also recyclable — which provides many opportunities for manufacturers looking to reduce their environmental impact, as recycled metal can be used in almost all the same applications as new metal. For example, replacing virgin aluminum with recycled aluminum requires around 95% less energy and reduces carbon emissions by around 95%. 

CarbonChain has worked with several companies in the metals sector who are taking strides to make their businesses more sustainable: 

Aluminum manufacturer Niche Fusina Rolled Products sources primary aluminum from lower intensity sources and has substantially increased the amount of scrap aluminum incorporated into their products. The company also uses scrap material for some alloying elements in its cast house.

‍Heneken Conductors, who makes steel and aluminum conductors, uses hot water to heat its factories and has installed a photovoltaic (solar power) roof.

MEPSA Aceros Chilca manufactures steel parts for the mining industry. Its sustainability initiatives include a circular economy which executes closed-loop recycling for some of its products: collecting them from mining sites at the end of their useful life and using them as inputs for the manufacture of new products, which reduces the amount of primary ferroalloys required — as well as their corresponding carbon footprint.

Start your sustainable manufacturing journey with CarbonChain

CarbonChain offers a carbon accounting solution purpose-built for metals supply chains to measure and report and set targets for their emissions.

Our platform enables steel and aluminum manufacturers, traders and distributors to develop a complete corporate carbon footprint aligned with the Greenhouse Gas Protocol and auto-generate, export and share full product carbon footprints to satisfy stakeholder demands and differentiate in the low-carbon transition.