United States

Sustainability in Manufacturing–A Growing Trend

MANUFACTURING INSIGHTS  | 

The United Nations World Commission on Environment and Development was created to address a growing concern about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development. In establishing the commission, the UN General Assembly recognized that environmental problems were global in nature and determined it was in the common interest of all nations to establish policies for sustainable development. In 1987, they released the Brundtland Commission Report. The report defined the term sustainability as meeting the needs of the present without compromising the ability of future generations to meet their own needs and discussed sustainable development and the change of politics needed for achieving that.

Sustainability has evolved over the decades. The 70s were focused on environmental compliance, the 80s on footprint reduction, and the 90s on energy efficiency. Now companies are looking at how products can be adapted improve society’s impact on the environment.

In today’s economic environment, the term green is used often. Green is about an organization improving its impact on the environment. A company can produce less waste, consume fewer inputs (such as raw materials, energy and packaging materials) and utilize resources more efficiently. Green not only improves internal operations, it looks at external factors such as the supply chain to reduce the impact on the environment. Green initiatives also often lower costs.

With increased emphasis on the environment and a desire by consumers to be environmentally conscious, manufacturers and distributors are undertaking green initiatives and making their businesses sustainable.

Fifty-three percent of the respondents to the McGladrey 2009 Manufacturing and Wholesale Distribution survey now plan green, up from 46 percent in 2008. Companies in the Building Materials and Chemicals industry segments were most likely to report such plans, at 70 percent and 60 percent of the time respectively, but respondents from every industry segment reported they would be undertaking green initiatives.

Concern for the environment was the most common reason cited for green initiatives by survey respondents. Manufacturers and distributors are embracing changes which result in environmentally acceptable green processes and products.

There is a growing consensus in the business community and across the country that green leads to sustainability and is truly indicative of a trend. Our surveys have reported more companies are becoming engaged in adopting green initiatives and more consumers are supporting environmentally conscious businesses. These initiatives are the cornerstone of sustainability and strengthen relationships with customers, partners, investors and the communities in which companies operate. Manufacturers and distributors are moving in this direction not only because it is the right thing to do, but because the market is driving the movement. Green and sustainability are becoming a standard requirement not only to enter the market, but to stay in the market. Some companies who have made this change include:

  • PC maker Dell – leading the way in recovery of parts from electronics
  • GE – developed a hybrid locomotive
  • Wal-Mart – funded truck manufacturers in producing a hybrid diesel truck
  • Philadelphia Eagles – now separate recyclables from trash after games
  • Coors – distilling waste beer into ethanol that Valero is distributing at gas stations in Colorado

As green becomes integrated into our processes and products, sustainability has moved to the forefront. Sustainability used to mean increasing your profits steadily, but it has now evolved where it considers the entire business environment – from the beginning of the process to consumption by the end user – and includes not only economic impact and development around the world, but social and cultural aspects of a business and all of the stakeholders.

Sustainability is about the long run. It’s not a flash in the pan or a PR program, it is developing a strategy which drives down costs, increases revenues through new products and customers, retains employees and extracts their creativity and innovation capability, and addresses the concerns of the entire globe about being here in the future. Resolving social and economic challenges while growing the business is truly where sustainability results in success over the long term.