There’s been a lot of discussion recently about how manufacturers can use the disruption of today as an opportunity to recalibrate for tomorrow. And rightly so. Whether it’s boosting resilience and agility in their supply chain, digitally upskilling staff or rebooting their technology infrastructure, the pandemic has prompted many firms to shift course in pursuit of future success.
Yet COVID-19 has also cast another pressing issue into the spotlight. As countries, communities and industries ground to a halt, the positive effects for the planet were almost instantaneous. Modeling by NASA’s Earth Observatory revealed that between February and November last year there was a nearly 20% reduction in global concentrations of nitrogen dioxide, a leading cause of air pollution.
Despite the ongoing health and economic challenges of the coronavirus, these environmental benefits can’t be overlooked — nor should they be. And as manufacturing companies seek to drive forward their own recovery and that of the US as a whole, they also must seize the opportunity to play their part in building a more sustainable tomorrow.
A joint effort
The good news is these two aims are by no means mutually exclusive. As consumers and employees look to organizations as the key drivers of positive social and environmental change, being a good business increasingly means doing good business too.
Equally encouraging is that many manufacturing companies are already well along the journey, albeit without always receiving the credit they deserve. From energy efficient plants to enhanced product lifecycles, much of the industry is investing heavily in reducing its environmental footprint.
There is, of course, more to do. But for that to happen, manufacturers are going to need to work together with their entire ecosystem as well as the government. As a recent report from the National Association of Manufacturers explains, most of the industry’s “low-hanging fruit” for tackling climate change has now been picked. Going to the next level of emissions reduction must be a collaborative effort.
Three paths to a greener future
In particular, there are three key opportunities to help the industry turn the enforced reset of COVID-19 into a blueprint for a greener future.
1. Simplify the policy landscape
Right now, there seems to be widespread agreement that the climate policy landscape is incredibly complex. Often, firms find themselves trying to navigate a confusing array of federal, state and even city-level regulations and targets. This could be simplified, making it easier for manufacturers to understand the most pressing issues for attention — then implement change initiatives to match.
2. Help mitigate the costs
For manufacturers, many of which have been using the same legacy systems for decades, switching to a more sustainable business model requires significant time, money and resources. That investment is necessary; after all, taking steps to shrink their environmental footprint is simply the right thing to do. But whether it’s in the form of policy incentives or public-private partnerships, progress could be accelerated by alleviating or offsetting some of the economic burden on those manufacturing companies trying to make an impact.
3. Engage the ecosystem
To drive change at scale, manufacturers should engage with policymakers in considering the wider ecosystem of which manufacturers are part. From the many tiers of suppliers to the transportation firms that distribute products to the individual end-users who ultimately decide whether goods are recycled, re-used or thrown away, policies, incentives and even punitive measures must be aligned to help everyone pull in the same direction.
A broader view
This is by no means a call for manufacturers to sit back and let policymakers do the job for them. Companies’ commitment to reducing their individual and collective impact must be wholehearted and sustained.
Like policymakers, they need to take a broader view and consider how improvements can be made across the entire value chain rather than just their shop floor — from design through customer service. Senior executives also need to be bolder in speaking out about the manufacturing industry’s role in driving a green recovery.
Back to the future
In a relatively short time, the pandemic has provided a powerful reminder of the environmental effects of human life while underlining the responsibility of communities, businesses and governments in protecting the planet’s future. As an industry that, according to EPA data, was responsible for around 22% of US greenhouse gas emissions in 2018, manufacturing has a vital but sizeable task ahead.
Yet any firm needing assurance that the necessary transformation is possible needs only look to the past. Over 200 years ago, manufacturing was at the heart of an industrial revolution that reshaped the US economy and changed our way of life forever. Fast forward to today and with the right mix of determination, investment and support, the industry can once again be a catalyst for change. Only this time, it will be leading the way into a greener society.
The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.