Cost pressures restricting sustainability for manufacturers

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Almost seven in ten (69 per cent) manufacturing decision makers agreed that their sustainability strategy has been restricted due to cost pressures, according to findings from Visual Components.

The research polled respondents in the UK, US, Germany and France. Stalling progress in green initiatives was also revealed by 72 per cent of respondents saying that less than 50 per cent of the materials used in the manufacturing process are sustainable. An even higher percentage (79 per cent) stated that less than 50 per cent is currently powered by renewable energy.

Less than half of organisations said they were focusing on waste reduction (43 per cent), improving efficiency (43 per cent) and a reduction in power usage (29 per cent) with the latter most likely driven by rising energy costs. This is despite confidence among decision makers that their business will play a role in the global drive for net zero carbon emissions (71 per cent).

Visual Components said that rising economic pressure will likely extend beyond impacting sustainability and push organisations towards a reshoring strategy. Almost four in ten (38 per cent) said they were planning on bringing operations back to their original country, with increased costs associated. Maintaining operations across several countries and transporting goods across long distances will likely play a role.

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While only 12 per cent cited a reduction in needed transportation as a sustainability strategy, this will likely increase as reshoring gains in popularity. The need to reshore will likely escalate as decision makers identify supply chain issues (44 per cent) and the challenging economic environment (42 per cent) as the biggest difficulties. 

Decision makers stated that employees are holding greater power in driving sustainability strategies (63 per cent). Commenting on the findings, Mikko Urho, CEO at Visual Components said that while the economic climate is presenting a blocker to green strategies for many manufacturers, decision makers can’t put sustainability on the back burner, with net zero targets and employee demand dictating its performance.

“To confidently move forward, technology such as simulation software can allow organisations to reduce waste, optimise floor layouts and enable communication of plans to colleagues remotely, bringing down emissions,” Urho said.