In the rapidly evolving discrete manufacturing industry, sustainability is not only an option, it is the key to unlocking lasting success in the future. For more than 50,000 companies worldwide, tracking and improving Sustainable Development Goals will soon be a requirement.

The Corporate Sustainability Reporting Directive (CSRD) is a new piece of legislation from the European Commission that aims to promote more sustainable business practices by companies operating in and exporting to the EU. The CSRD replaces the EU’s Non-Financial Reporting Directive (NFRD) with more stringent requirements affecting more companies, adding decarbonisation and circularity targets to existing hazardous substances obligations.

CSRD follows the principle of dual importance, whereby companies must report on how their business is financially affected by sustainability issues, and on how corporate activities affect the environment, climate and society. Reporting on how their activities impact the environment is a new endeavor for many companies. Companies that have begun to report on environmental, social and corporate governance using frameworks such as the Global Reporting Initiative (GRI), the International Sustainability Standards Board (ISSB), the Climate Disclosure Project (CDP) and the Science Goals Initiative (SBTi) will find that because CSRD is aligned with many of these international frameworks, They’ve got a head start.

As a result, establishing a comprehensive reporting system, embracing circular economy principles and utilizing renewable resources may seem like a daunting task, but businesses that start early will benefit greatly. Sustainability is not just a feel-good goal, it is a powerful driver to reduce costs, increase market share, and increase flexibility and resilience.

Reduce costs and footprint

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Sustainable development is most sustainable when it is aligned with financial objectives. Improving efficiency is at the heart of sustainability practices, as it requires streamlining processes and optimizing resource use. Companies that start pursuing more sustainable ways of producing their products now will find opportunities to save costs and lay the foundation for future success. Design determines 80% of a product’s carbon footprint. By adopting generative design, manufacturers can reduce the amount of material used by 10-15%, resulting in a significant reduction in carbon content and material expenditure.

On the factory floor, with energy management and bottleneck analysis tools, companies can identify ways to reduce energy consumption, waste, scrap and rework while maintaining output levels. Cimc, a leading provider of logistics and energy equipment, used energy management software to gain operational visibility and reduce energy consumption by 13 percent.

In the field, enterprises can significantly reduce spare parts inventory by applying multi-fleet service part optimization to locate inventory in the network to meet service level agreements (SLAs). Metso, a manufacturer of mining equipment and an advocate of sustainable practices, has reduced its inventory by €40 million while improving its service levels by 3 percent. Just think about the carbon content of a component worth 40 million euros?

Gain competitive advantage

New technologies are often needed to achieve sustainable development, and digital transformation is the only way to achieve near-term goals and net-zero goals. Companies that are the first to digitize and innovate will be at the forefront of the industry, thus gaining a competitive edge and the favor of environmentally conscious customers.

The shift to SaaS(Software as a Service) is a trend that gives manufacturers a competitive advantage and a lower carbon footprint. A study by 451 Research found that switching from licensing to cloud hosting reduces your carbon footprint by an average of 80%. In addition to reducing emissions, cloud solutions allow manufacturers to spend less time maintaining software and more time leveraging their unique business advantages.

Whether it’s CAD, PLM, ALM, IoT, or FSM, digital technologies that power the product lifecycle are indispensable for companies looking to create more sustainable products. These solutions support key practices such as dematerialization, analog prototyping, remote services, and over-the-air software updates, creating added value for customers while reducing the carbon footprint of products.

Dematerialization through generative design at the design stage reduces the carbon content of the product and creates a ripple effect downstream. For example, when customers step foot in a car with a lightweight engine design, they enjoy greater fuel efficiency throughout the life of the car. Once the design is complete, engineers can run 3D simulations in the CAD system to understand the performance of the design and continuously improve it. Running these simulation cycles in advance helps manufacturers reduce physical prototyping, which reduces costs, speeds development, and reduces their carbon footprint.

During the delivery of products to customers, regular maintenance is required to keep most products in top condition. Service providers that adopt a remote service strategy will be able to provide faster, cheaper and lower cost services. By empowering front-line employees to remotely monitor, diagnose, troubleshoot and resolve customer issues using digital field service management tools, service providers can reduce trucking and travel-related emissions while ensuring product uptime at the client end.

When a particular product needs to be updated, providing over-the-air software updates (rather than hardware upgrades) can provide immediate results for customers, while eliminating the carbon footprint impact of recalling physical products. Just as important, these over-the-air updates allow manufacturers to stay in close communication with their customers. As circularity becomes critical, a manufacturer’s ability to maintain a close relationship with its customers throughout the product lifecycle will determine its success or failure. Aerial upgrades have proven to be an effective way to build this ongoing, rewarding relationship with customers, opening the door to circular growth.