Get
lean
GET READY
A more
efficient
environment
Many sustainable business solutions are also more efficient, both in terms of time and budget. This can boost efficiency and reduces expenses, with positive effects on a company's bottom line.
The green transition is linked to new technologies, as organizations are investing in tools like AI, automation, and the Internet of Things (IoT). By adopting digital technologies at scale, businesses can optimize their own operations – and their sustainability transformation.
“As a leader, you should prioritize the use of technology to calculate the true cost of your operations at product and service level – in terms of financial budget, and the environmental and social footprint. Once you understand the real cost of doing business, you can look for opportunities in the value chain to drive efficiency and make a positive impact"
Courtney Holm, Vice President of Sustainability Solutions at Capgemini Invent UK
GET SET
Manufacturing is
getting greener
The companies most advanced in their green transformations are those that manage to target efficiencies in production and operations. These can take many forms, including process redesign, waste management, water stewardship, and developing the principles of the circular economy – and they all benefit the organization’s profitability in some way.
For example, some manufacturers are making the shift to on-demand manufacturing and are already enjoying benefits such as reduced costs. A “just-in-time” strategy makes sense as fluctuating consumer preferences shift toward sustainable products. This approach can meet immediate demand, rather than risk an incorrect forecast of future demand, and thereby reduce manufacturing waste and its related expenditures.
It's also important to understand that sustainable design does not translate directly to higher spending, despite common convictions among leaders. Nearly a quarter of companies have even noticed decreased costs since adopting sustainable design strategies. And even among companies spending more, 51% say the benefits outweigh the costs4.
Data is key to driving efficiencies, and companies that measure the environmental impacts of their IT systems, data centers and applications to define sustainable IT strategies can also find efficiencies to benefit their bottom line. Some organizations are shifting to more renewable energy usage as they migrate IT infrastructure to the cloud.
A large-scale migration to a cloud powered by renewable energy sources could save up to 629 million metric tons of greenhouse gas (GHG) emissions by 2025. However, only 48% of executives say their organization uses green cloud architecture for data centers.
Companies enjoying the benefits of sustainability-related efficiencies should encourage more action. Notably, 65% of organizations that are well-seasoned in the sustainability game have implemented smart systems to monitor and reduce energy consumption, and 72% encourage employees to work from home to reduce emissions. These initiatives offer savings in terms of the company’s direct operating costs, and may increase productivity among its workforce.
We predict that a large-scale migration to a cloud powered by renewable energy sources could save up to
629m metric tons
of greenhouse gas (GHG) emissions by 2025.
We predict that a large-scale migration to a cloud powered by renewable energy sources could save up to
629m metric tons
of greenhouse gas (GHG) emissions by 2025.
Trend watch 2023
Intelligent ideas for industry
In the coming year, companies will have access to a wide array of options for improving efficiencies. In manufacturing, we predict more of a focus on the circular economy. Using resources more economically will generally be a guiding principle as we move through 2023 and beyond.
We have also identified a number of trends in tech that companies are adopting to improve efficiency and facilitate their sustainability transformations. One example is the Gigafactory, infrastructure that supports at-scale manufacturing of electrolyzers, batteries, and heat pumps. This, in turn, will create a more efficient and cleaner energy supply.
Additionally, more companies should embrace hydrogen production infrastructure, as it looks increasingly likely that the future will support a lively hydrogen economy. Carbon capture, utilization, and storage (CCUS) is another emerging technology. It provides a means to sequester and thereby reduce carbon emissions from production and manufacturing operations. More companies are either implementing or sketching plans to install CCUS infrastructure at key points in their value chains. Organizations that start investing in these trends now are set to reap the financial rewards in the long term.
Tech for the planet
Connected businesses
The term “intelligent industry” encompasses a range of ideas – from connected businesses to digital solutions for traditional manufacturers – all of which are great for a company’s bottom line. Some 83% of companies that focus on intelligent products and services, which are connected and software-enabled, have seen reduced servicing costs5. Meanwhile, “sustainable IT,” which refers to tools like eco-friendly application architectures, can help organizations both streamline applications and identify and decouple those that are too energy-intensive.
Despite the availability of these tools, 18% of organizations are either unaware of them, or else have not yet begun to implement them6. But shifting from on-site computing to the cloud also offers considerable energy savings.
“As a leader, you should encourage the use of technology to calculate the real cost of your operations at product and service level – both in terms of budget and environmental footprint.”
Courtney Holm, Vice President of Sustainability Solutions at Capgemini Invent UK
Cost savings seen among companies that have implemented and scaled green cloud architecture organization-wide6
GO!
Your turn
There are a number of ways in which C-suite executives can introduce more efficiencies at every level of their organizations.
If you're the COO
The Chief Operating Officer holds the unique power to identify and eliminate unnecessary waste production in a company.
Increase on-demand manufacturing by adapting to produce just what is required when it is required will make your group more versatile while also meeting consumers’ growing demand for customization.
Find and cut down on overproduction wherever it occurs. Identify where the most waste is happening will enabling your company to remove these inefficiencies and potentially any defects in products, as well.
If you're the CDO
As the Chief Design/Product Officer, you should make the most of your position as a link between the C-suite and the design teams.
Leverage your expertise to translate broad sustainability goals into actionable design objectives.
Adopt a data-driven approach to measuring impacts across the product lifecycle and identify priorities, for example via lifecycle assessment (LCA). This method finds approaches to product design that consider environmental impacts across the entire product lifecycle. By introducing sustainability into the company’s value chain, you will drive the whole organization toward new efficiencies and a circular economy.
If you’re the CPO/CSPO
As the Chief Procurement / Supply Chain Officer, you are also providing a bridge, this time between your company and its external partners.
Set clear and well-informed sustainability criteria for suppliers to benefit both parties. This might take the form of environmental pledges or ESG evaluations and ratings.
You could also include suppliers in your own sustainability KPIs, thereby giving them clear targets to aim for and incentivizing greater efficiency.