Technodyn International, the exclusive strategic partner for global cloud enterprise software company IFS in Sub-Saharan Africa, has announced that a global manufacturing study on sustainability and the circular economy conducted by IFS and research firm Omdia has found a lack of centralised responsibility, legacy assets, infrastructure, and upfront costs as the most significant barriers to investments in sustainability.
The survey polled a range of high-level executives working for manufacturers across North America and Europe to better understand their views on sustainability and the circular economy (a model of production and consumption that focuses on the reuse and recyclability of products and materials). With only 12% of respondents having already rolled out circular economy programmes, the survey highlighted the significant work still to be done on addressing sustainability in the sector.
The research encompassed three areas that impact the approach by manufacturers on sustainability. The first focuses on investment drivers. These include environmental responsibility and barriers like legacy infrastructure. The second area examines the sustainability implementation status, such as the key areas where companies are currently focusing on their sustainability initiatives and sustainability maturity level. Finally, the third area assesses the case for the circular economy and its benefits.
“With the disruption caused by the pandemic being considered a catalyst for renewed sustainability, the IFS survey is timely. There is a worldwide need to curb the impact of manufacturing on the environment through interventions such as reducing carbon emissions and industrial energy consumption. External pressures such as customer awareness and regulatory pressure are certainly helping to push it op the priority list for manufacturers. But there is still a disconnect to practically addressing the sustainability challenge,” says Heman Kassan, Chief Commercial Officer at Technodyn.
There are positive signs. According to the survey, 80% of respondents are either in the process of piloting circular economy initiatives, have finalised circular economy objectives and are deploying them; or are developing objectives around circular economy.
The survey has found that the top three drivers for sustainability initiatives at manufacturers consist of regulatory compliance (18%), business risk (15%), and financial incentives and tax reductions (15%). This suggests that there remains a reactive mindset among manufacturers when it comes to sustainability and the circular economy despite how important ESG reporting has become.
The most significant benefits a circular economy model will deliver for an organisation are seen as being able to support a sustainable strategy, with 78% of respondents ranking it in their top five. This was followed by increased customer engagement (74%) and improved environmental protection (74%).
“Of course, embracing sustainability and a circular economy mode of production are complex and expensive undertakings. However, the benefits of becoming more sustainable in today’s more environmentally conscious market certainly make it worth the effort,” says Kassan.