The push for sustainable operations is accelerating, reshaping priorities for manufacturers of all sizes. Whether driven by consumers, investors, or regulators, expectations for transparency and accountability are intensifying.
In the European Union, the next phase of ESG regulation has begun. New frameworks such as the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) require organizations to disclose environmental impact with far greater rigor. At the same time, the EU’s latest regulatory omnibus aims to simplify reporting without weakening standards.
Regardless of how the omnibus shakes out, it seems clear that manufacturers need to stay agile and data-driven. As Sophie Graham, Chief Sustainability Officer at IFS, tells Manufacturing Digital, “A simple fact remains: good data is good for business.” Mark Wilkinson, OpenText's SVP for the Global Business Network, says that by “embracing AI’s capabilities, optimizing agile data foundations and embracing automation, companies can ensure they remain prepared in the face of increasing regulations.”
This shift isn’t isolated to Europe. In the U.S., companies have continued to invest in sustainability. Sustainability is about reducing waste, and as Purdue University professor John Sutherland explains, “waste is a sign of inefficiency.”
Whether it’s for regulatory or philosophical reasons, across industries, leading manufacturers from Amazon to L’Oreal to Volvo have plenty of motivation to stay sustainable and use AI, the Cloud and modern ERP systems to do so.
Today’s manufacturers face increasing expectations on multiple fronts:
Consumers expect environmentally responsible products. Volvo’s ES90 reflects this shift, with sustainable materials, full traceability built into the vehicle, and Life Cycle Assessment reports. Acer is moving in the same direction by incorporating reusable materials and improving energy efficiency in its manufacturing processes. Primient is taking a similar approach in agriculture, prioritizing sustainably sourced ingredients. The message is clear: consumers are no longer satisfied with promises alone — they expect transparency.
Capital is increasingly tied to ESG performance. Companies failing to meet expectations may face higher financing costs or lower valuations.
AI tools can help companies comb through massive amounts of data about their product formulas and manufacturing processes to discover more sustainable approaches. For example, leading beauty brand L’Oreal has been using a proprietary AI model to reduce production waste and incorporate greener materials in its products. Meanwhile, HVAC giant Trane has been building its own AI-powered digital tools for cutting down on energy use, carbon emissions, and operational costs.
In the past, it was much more difficult for manufacturers to find those sorts of insights, not to mention implement them. If your data is siloed, outdated, or incomplete, AI-driven sustainability insights will be limited. AI requires a strong data foundation. This is where ERP becomes essential.
With a more detailed view of the data and technology that can point them toward a practical solution quickly, manufacturers can essentially use a scalpel where an axe once felt necessary. Fine-tuning the materials and processes used to create a product can have a significant impact on sustainability without adversely affecting productivity or profitability.
Manufacturers can follow the lead of Amazon and its partners, who have used rapidly improving energy tech to make significant progress on their Climate Pledge. Investments in renewable energy have counteracted carbon emissions across the company, and electric trucks have made freight and last-mile logistics more sustainable across India.
As renewable energy and EVs become more affordable and cost-effective, smaller manufacturers could consider making similar investments. The impact would be significant, considering that last-mile delivery accounts for around 30% of logistics-related carbon emissions. By using EV trucks or choosing to work with last-mile firms that do, manufacturers can take a major leap toward achieving their long-term sustainability goals.
Manufacturers can make all the promises they want when it comes to sourcing sustainably, but how do they know they’re actually doing it? Volvo’s solution was to use the blockchain to trace the cobalt and other materials they use to produce their EVs. Today’s environmentally conscious consumers need more than pretty words on a website to feel that they’re making the right purchase, so it could be worth investing in technology that helps prove it.
Manufacturers already rely on ERP platforms to standardize and improve business operations. To leverage those platforms for sustainability, manufacturers can use existing features aimed at environmental impacts. For example, Microsoft Dynamics 365 Business Central offers sustainability management tools that can track things like greenhouse gas emissions, energy usage, and water usage.
Modern ERP can:
For manufacturers who want to go even deeper, Microsoft’s suite of sustainability-specific Cloud solutions can centralize relevant environmental data, analyze the impacts of specific business processes, and make compliance and reporting far quicker and more efficient. In fact, Microsoft’s Cloud-based sustainability tools can even track the environmental impact of using them – a good reminder that tech aimed at sustainability needs to be implemented sustainably itself.
At Enavate, we know that modern business success of any kind starts with data. We’ve helped our clients de-silo their data, move it to the Cloud, and build custom ERP platforms to serve as the foundation for major improvements and innovations. If your manufacturing business is hoping to hit its sustainability goals, we can help you get there. Reach out to our team to learn more today.