Sustainable manufacturing industry in 2024
2024 is a defining year for the manufacturing industry.
2024 is a defining year for the manufacturing industry.
The push for sustainability has never been stronger, with governments and consumers urging manufacturers to make substantial changes. While discussions surrounding the circular economy have surged in recent years, the reality presents a stark contrast.
The share of secondary materials in the global economy has dropped by 21 per cent over the past five years, declining from 9.1 per cent in 2018 to 7.2 per cent in 2023. Material consumption rates have surged, with over 500 gigatonnes consumed in the same period, constituting 28 per cent of all materials consumed since 1900.
These statistics underscore the urgent need for transformative change within the manufacturing sector. This article explores important sustainable trends reshaping manufacturing in 2024, offering insights into the challenges and opportunities ahead.
1. Reshore to minimise risks
In the past few years, industries have faced supply chain disruption and hikes in fuel and transport prices, exposing the disadvantages of globalisation.
Medina (2022) asserts that Europe and North American companies are leading a new phase of globalisation through reshoring efforts to reindustrialise their economies. Products once manufactured in developing countries will now be produced domestically. While this trend began in the last decade, there will likely be a further increase in reshoring activities in 2024.
According to a 2022 survey by BCI Global and Supply Chain Media, up to 60 per cent of manufacturing companies are contemplating relocating their production activities back to Europe or North America within the next three years.
To support reshoring, circular economy practices will be growingly adopted, both domestically and regionally. As a result, companies will reduce risks associated with delivery time, spoiled products, price fluctuations, and supply bottlenecks by lowering dependence on outsourced materials.
2. Decrease Scope 3 emissions
Most companies have focused on cutting Scope 1 and 2 emissions since they control them directly. However, according to Deloitte, up to 70 percent of a manufacturer’s emissions are Scope 3 emissions. These are indirectly released upstream or downstream of the value chain. Scope 3 emissions in manufacturing arise from raw materials extraction, manufacturing, and transportation.
Companies must start curtailing their Scope 3 emissions to achieve net-zero goals. Circular economy manufacturing processes that reuse or recycle materials from end-of-life products will greatly reduce Scope 3 emissions.
The implementation of the Corporate Sustainability Reporting Directive (CSRD)in November 2024 will further drive companies to consider both downstream and upstream impacts on the environment and society. This directive mandates more detailed reporting on sustainability issues, enhancing credibility and encouraging stronger investment in sustainable practices across manufacturing sectors.
Furthermore, circular manufacturing will keep materials within a country, reducing emissions from long-distance transport of end-of-life products and importing raw materials. Currently, only 7.2 per cent of all materials are recycled and circular, so the capacity for change in all industries is immense.
3. Use new technologies to boost productivity and engagement
Clean innovation is necessary to increase manufacturing productivity, create green assets, and improve people’s living standards.
Innovations in clean technology will help countries and regions build robust but shorter supply chains. Although the initial investments for innovation will be high, they’re nothing compared to the investments needed to fix environmental damage and the associated costs from continuing older manufacturing models.
New technologies for handling time-consuming, repetitive work will improve employees’ productivity and creativity and allow them to focus on vital tasks. Technology is already helping companies attract suitable non-local talent through remote work. Faster communication tools enable better team coordination and customer service. Most employees also consider new technology to improve their health and safety.
Ratna and Kaur (2016) suggest that manufacturers should adopt new technologies through training and reward systems.
Artificial intelligence (AI) is one such technology that holds enormous potential to increase sustainability in manufacturing. With its ability to analyse data, identify patterns, and predict outcomes, AI could revolutionise environmental efforts. According to a study by PricewaterhouseCoopers and Microsoft, AI applications could contribute $30 trillion to the global economy by 2030.
Despite ethical concerns and scientific skepticism, collaborative efforts among stakeholders can leverage AI’s transformative potential for sustainable development.
4. Move from intent to impact
Many companies have made climate pledges in recent years.
However, achieving the desired impact has not been easy. Companies find it challenging to meet the ambitious targets they have set for themselves despite implementing impressive sustainability strategies. This is partly because many don’t yet address Scope 3 emissions.
To control Scope 3 emissions, the entire value chain, not just a few isolated manufacturers, will have to transition towards a net-zero path and circular economy. Many businesses, however, are wary of change and are still determining how the required money, policy, and innovation will materialise.
Getting entire industries involved in sustainability will require massive funds estimated in the trillions of dollars over the next 30 years, according to a 2022 McKinsley report.
In 2024, we expect more concrete action and impact on meeting climate ambitions as markets and governments work to find and promote tangible solutions.
5. Find new collaborators
Collaboration is essential to moving the manufacturing industry forward.
Solving this century’s most significant challenges will require everyone to prioritise collaborative efforts. Manufacturers will continue collaborating with research universities to find eco-friendly and innovative alternatives to environmentally harmful technologies and resource extraction to maintain productivity, sustainably, and reach climate goals.
Collaborations and partnerships between suppliers and manufacturers across the value chain will also be necessary. Their success will depend on transparency and accountability during technology development, resource use, financing, and recognising limitations.
Moreover, the transition to net zero should be socially just. This will be possible only through cooperation across industries, supported by government policy, to generate new opportunities and minimise uncertainties.
6. Extinguish greenwashing for good
2024 is the year that marks the end of greenwashing in Europe.
The manufacturing industry faces increased scrutiny as Europe takes decisive action against greenwashing through the European Commission’s Green Claims Directive. This directive demands transparency and accuracy in environmental marketing, putting pressure on manufacturers to demonstrate genuine sustainability commitments, with potential penalties of up to 4 per cent of annual revenue for making misleading claims.
In response, manufacturers must adhere to strict criteria, including prohibitions against deceptive marketing tactics. Non-compliance risks fines, sanctions, and product recalls.
Additionally, global standards set by the International Sustainability Standards Board (ISSB) aim to mitigate greenwashing by providing uniform sustainability and climate standards for companies worldwide starting in 2024.
By adhering to these regulations and standards, manufacturers can foster trust and credibility while ensuring the authenticity of their sustainability efforts.
7. Rethink plastic recycling
A global commitment is leading efforts to rethink plastic pollution and recycling. Plastics pollute the environment throughout their life cycle, creating risks for human and animal health and destabilising the climate.
For these reasons, the international community is working towards a treaty to end plastic pollution in 2024. This treaty, the first legally binding international effort in this area, will impact the entire life cycle of plastics, from production to disposal.
A transformed plastics economy addresses environmental concerns and brings new economic benefits, opening doors to innovative business opportunities within the manufacturing sector.
Projections indicate that by 2040, implementing a new circular plastics economy could result in an 80 per cent reduction in plastic pollution, translating into up to 32.5 per cent cost savings and environmental benefits.
8. Include circularity in the product design process
Companies realise that decisions made during product development are key to reducing over 80 per cent of all product-related environmental impacts.
Looking ahead, traditional design criteria like cost and performance are no longer sufficient. Manufacturers must now consider the entire life cycle of their products, prioritising aspects such as lifetime extension, reuse, remanufacturing, and high-quality recycling for maximum efficiency.
Critical areas for improvement include the selection of materials and suppliers, which often contribute significantly to a product’s environmental footprint. Integrating sustainability criteria into the design process necessitates smarter choices, favouring suppliers with ambitious decarbonisation plans and materials with lower environmental impacts.
In the EU, the proposed Ecodesign for Sustainable Products Regulation (ESPR) leads the efforts in this area. It aims to reshape product design, ensuring that a significant portion of goods on the EU market focus on more environmentally sustainable and circular products by 2030.
Bringing sustainability to the manufacturing industry
In 2024, the challenges of promoting sustainability in the manufacturing industry persist alongside the opportunities for transformation.
The decline in global circularity and soaring consumption rates underscore the urgency for change. It’s time for action.
Krzysztof Wróblewski, Contec’s CEO, echoes this sentiment, emphasising the importance of partnership, leadership, and innovation in driving circularity in the manufacturing industry.
Advancing the industry is only possible through collaboration and partnerships. When industry leaders bring together people from different ideas, points of view, and life experiences—it stimulates new and creative ideas. Decarbonsing the manufacturing industry is only possible through mutual collaboration on innovation.