Like it or not, green manufacturing activity continues to increase. Actions include everything from plantwide recycling programs to installing new energy-efficient lighting systems.
Like it or not, green manufacturing activity continues to increase. More than half (56 percent) of ASSEMBLY’s 2010 State of the Profession survey respondents claim they are involved in green or sustainability initiatives (a 10 percentage point increase since we first began tracking the trend two years ago). Actions include everything from plantwide recycling programs to installing new energy-efficient lighting systems.
A recent study conducted by Ernst & Young LLP confirms this trend. Its survey reveals that corporate executives plan to make significant investments to deliver both cost savings and revenue generation opportunities relating to climate change.
Seventy percent plan to increase spending on climate change initiatives between 2010 and 2012. Nearly half plan to spend between 0.5 percent to more than 5 percent of their revenue on climate change initiatives.
“Despite challenging economic conditions and regulatory uncertainty, executives believe that climate change agenda will significantly impact business performance and strategy over the next few years,” says Steve Starbuck, Americas climate change and sustainability services leader at Ernst & Young. “Corporate leaders are not letting the lack of global standards and regulations slow their investments.”
Corporate climate change activities are being driven by evolving customer demands, according to 89 percent of survey respondents. “Some sectors, including automotive, consumer products and technology, unanimously agree that changing customer preferences have created significant drivers for action and innovation,” Starbuck points out.
In addition, equity analysts are increasingly linking business response to climate change and company valuations. More than 40 percent of the senior executives surveyed by Ernst & Young believe that equity analysts currently include climate change-related factors in company valuations.
“Prudent executives recognize the wealth of opportunities to make money, save money and respond to stakeholders’ expectations by integrating their climate change response into business plans and sustainability strategies,” says Starbuck.
Energy efficiency is at the top of the green to-do list, with 82 percent of respondents planning to invest in their facilities over the next 12 months. About half of the Ernst & Young respondents confirm new ventures, such as spin-offs or start-up businesses, as an area for focus. Additionally, 65 percent of executives intend to focus investments on new products and services. And, 94 percent of respondents see national policies as important or very important in shaping their climate change strategies.
Approximately 66 percent of respondents are discussing climate change programs with their suppliers and 36 percent of respondents are already working directly with them to decrease the carbon in their supply chains.
For instance, Ford Motor Co. recently announced that it plans to survey 35 of its top global suppliers on their energy use and estimated greenhouse gas emissions.
“Suppliers play an important role as we look to reduce our overall carbon footprint and drive more efficiency in an energy-constrained world,” says Tony Brown, Ford group vice president of global purchasing. “Any reductions by suppliers would be in addition to Ford’s own goal of reducing greenhouse gases 30 percent by 2020 from the company’s 2006 model year baseline.” Ford is also working with the Automotive Industry Action Group to develop guidelines for measuring supplier emissions.
Green Manufacturing Is Here to Stay
July 21, 2010