Analyst research unveils increasing interdependence of leading economies and supply chains in 2020 highlights a need for digital sustainability.
A new report released today by Autodesk in partnership with global consulting partner, Frost & Sullivan, shines a light on the adoption of sustainability initiatives and maturity levels in Northern Europe.
Combining quantitative interviews among 600 business decision makers and 24 in-depth qualitative interviews with sustainability leaders in the architecture, engineering, and construction (AEC) and manufacturing industries, the report also explores the new areas of digital sustainability being pursued in the path towards net zero. The research includes the UK & Ireland, Nordics (Norway, Sweden, Finland, Denmark and Iceland), and Benelux Regions.
Nordics are leading the way
The findings indicate widespread acknowledgement of the need to enhance sustainability across these sectors and that action is underway. Nowhere is this more apparent than in the Nordics where the majority surveyed (91%) have a dedicated sustainability team, falling to 81% in Benelux and 78% in the UK and Ireland.
This distinction may be caused by stronger regulation and strategic direction from leadership in the Nordics, which are viewed by nearly three-quarters of companies in the region (73%) as key drivers of their sustainability agenda. However, with more regulation set to come in across Northern Europe and increasing macro pressures on markets, further adoption of sustainable best practices across the regions is likely.
The benefits of adopting sustainable practices had two clear winners. This included a better use of resources (less waste) for the AEC sector (70%) and even higher (73%) in manufacturing, followed by reduced energy consumption (64%) for AEC and 74% for manufacturing. Half of AEC respondents also believe sustainable practices improve project quality. These findings indicate that the use of renewable energy, better material choices and circularity approaches could lower the environmental impact of projects or products.
Sustainability initiatives offer a competitive edge
When asked why their company was embracing sustainability, 86% cited customer retention played an important role, followed by customer expectations at 84%. The growing demand for sustainability is also viewed as an important competitive advantage, with a quarter (76%) saying it was an important driver. Perhaps indicative of the Nordics maturity in sustainability best practices; regulation and market forces were the highest in the Nordics (73%) compared with the UK (48%) and Benelux (29%).
Though customers were an important influencer, employees were the second driver for firms (63%) followed by the supply chain and partners (61%) and company leadership (61%). Investors came lowest overall (45%) but were more important for the UK and Ireland (57%).
Overcoming digital challenges to a more sustainable future
Today, 85% of companies are investing in improved workflows (reducing waste and energy consumption) to become more sustainable, with 62% citing it will increase in the next two years. Another area of investment is in technology and software, with almost three quarters (74%) investing here today, and 53% expect this to increase. The role of data to better inform decisions and break down siloes in the organisation is showing clear
Though the benefits of sustainability are clear, firms still face challenges in implementing strategies across both industries, with access to skills and training (33%) and a lack of financial resources the most common challenge (39%). However, it is unclear whether firms have a proven method for tracking cost benefits for sustainability against the initial investment they need to make. Only 22% cited a cost reduction, 31% said the impact on costs was neutral and 46% said there was an increase in costs as a result.
Asif Moghal, Design & Manufacturing Industry Manager, Autodesk says: “It’s clear these companies are on the right path to sustainability, but there’s a need for greater measurement between financial investment and ROI in other forms. Benefits such as a greater competitive advantage, employee retention and savings made through lower energy usage and less wasted materials all add up to support the bottom line.
The transformation from physical to digital has brought both the AEC and manufacturing industries closer together to make supply chains shorter, increasing collaboration and boosting resilience. The critical next step is sharing learnings and best practices between industries to meet carbon neutral goals in the next decade and beyond.”
Fredrick Royan, Vice President, Sustainability and Circular Economy at Frost and Sullivan, lead author of this report, adds: “The manufacturing industry in Europe is witnessing a transformational shift with key factors such as personalisation of customer products, agility of delivery, and responsiveness for proactive support that will guide Industry 5.0. This shift is set to contribute to long-term sustainability and profitable interactions among stakeholders in the business-to-business (B2B) and business-to-consumer (B2C) environments. Digital tools will support manufacturing companies significantly when transforming their business models and delivering enhanced value to customers. The evolution from product centric to solutions and services offered through an outcome-as-a-service model will map into customers’ sustainability needs, such as life-cycle services.”
To learn more and read the full report, download it here.