The timing of COP26, at the tail-end of 2021, means many of us have started 2022 with a renewed urgency around sustainability. World leaders’ pledges around methane reduction and halting deforestation may have initially seemed a few steps removed from everyday activity for manufacturers, but they will have an impact in several places along the value chain.
Growing levels of stakeholder pressure mean the need to change has already been building in the wake of the conference. New regulations currently being drawn up are likely to have an impact, rewarding those businesses who drive towards having net-zero carbon footprints by 2050, and penalising those who do not.
Did COP26 relate to manufacturing?
For all the scepticism about COP26, it was arguably the most significant climate-related event since the 2015 Paris Accords. It is likely to have a serious impact on industry, forcing manufacturers to push sustainability higher up the agenda than ever before.
With a number of high-level themes on the agenda, it was initially difficult to find a way to identify the direct impact it would have on businesses. Looking at the most talked-about commitments, however, there are some stand-out areas that relate to manufacturing:
- Commitment to move away from use of coal as early as 2030
- Stronger commitments to reducing methane emissions
- Delivering net-zero carbon footprints by 2050 by shifting the way projects are financed
- Halting deforestation and land degradation
- Two dozen leading US firms (‘First Movers’) working to decarbonise aviation and steel manufacturing, shipping and trucking
While 2030 and 2050 deadlines seem a long way off, time is clearly of the essence for manufacturers. They can’t sit and wait – they must be ready to take action and change behaviours right now.
What’s the tangible impact for manufacturers?
The next step is for countries to set regulations designed to honour these commitments, charting a course for how we can achieve the goals set out at COP26.
Typically, manufacturing business models are built around tight, optimised supply chains. Many of them draw heavily on plastics and hydrocarbon-based raw materials, meaning there’s likely to be more than a small ripple heading downstream in the wake of tighter regulations.
A number of factors will seriously shift existing dynamics, from the closure of coal-powered electricity plants pushing energy prices up, to the fight against deforestation impacting the availability of some materials and making expansion in new territories more difficult.
Proving your impact
At a real practical level, manufacturers will need to give proof of their progress against these new rules. From now on, it will be more crucial than ever to document compliance with procedures and processes.
Manufacturers must also be ready to implement complete product traceability reporting to verify the make-up of each and every product – both to prove they are meeting ESG commitments, and also at a wider level, to maintain their reputation.
To underpin this, they need a system that can not only keep track of all the related data, but also ensure they are heading in the right direction. Expect to see greater reliance upon a Manufacturing Execution System (MES) to quickly identify issues or discrepancies, and to then take action to get back on track.
Systems that can make this happen automatically will be sought after, to speed things up and reduce the manpower involved. An MES can also ensure policies and procedures that are put in place will help manufacturers work towards the range of new goals that are set to be introduced across the year.
As the months pass, manufacturers must brace for the true impact of COP26, preparing themselves for regulatory changes around everything from decarbonisation to energy cost management.
Manufacturers who do not have flexible, automated IT platforms underpinning activity will struggle to keep pace. Meanwhile, those who have laid firm foundations with tools fit for the digital age will be well-placed to meet and exceed new ESG goals.
About the author
Evan Sloss, EMEA Director at iBASEt
Evan Sloss brings close to 25 years of manufacturing, sales, and business development experience to the iBASEt leadership team. As Director, EMEA, he is responsible for driving new business activity across Europe, the Middle East, and Asia. His expertise lies in driving new business opportunities in the Manufacturing Execution System (MES) and Maintenance, Repair, and Overhaul (MRO) markets. He began his career in Product Development within the heavy equipment sector.