Why Corporate Sustainability Practices Must Start at the Top
Industrial manufacturers are some of the biggest contributors to pollution and climate change. Both industrial manufacturers and supply chain managers must bear a large part of the responsibility for reducing our environmental impact. While many factors have contributed to supply chain hurdles and economic woes, there are clear measures organizations can take to ensure progress toward more sustainable operations. Because there can be many hurdles on the way to meeting decarbonization goals, it helps to have multiple levers to pull and expectations to hold you accountable across various aspects of the business. Installing solar panels or recycling processed water alone won’t achieve your net-zero goals. Organizations must look at their entire operation – from supply chain to maintenance, manufacturing processes to administration – to identify decarbonization opportunities and ensure progress toward more sustainable operations.
Importance of Internal Transparency
Raising awareness about the importance of sustainable operations and being outspoken about transparency and integrity is essential. Two-thirds of the world’s largest publicly traded companies have been vocal about how they plan to achieve their net-zero and sustainability goals outside of consumer-facing operations, but others still lack transparency as to how they plan to get there. When determining sustainability goals, remember the best plans flow from the top down. Committing to sustainability across your organization can help drive a culture shift whereby managers and supervisors begin thinking and acting with sustainability in mind.
Some organizations even benefit from incentivizing these efforts, through executive compensation based on sustainable performance or programs that reward management and even production staff for their ideas and efforts toward sustainability. Shifting your culture toward sustainable operations can also help future-proof the organization. Keeping sustainability in mind when making equipment purchases and upgrade decisions can help you stay ahead of shifting mandates. For example, organizations might look at upgrading facility lighting to high-efficiency LED fixtures with future-ready capabilities, which can significantly lower energy consumption and carbon footprint at all facilities.
Promoting Cross-Functional Buy-In
Infusing sustainability KPIs into operations and decision-making will establish operational policies across your organization. One way to do this is to bring sustainability directors into management and purchasing decisions. With sustainability in mind, you can create consistent, well-documented policies, codes of conduct and processes to which all departments and business partners must adhere. No matter what you’re doing internally, working with suppliers who don’t meet modern sustainability standards holds back your net zero and corporate social responsibility progress. Establishing policies and expectations that suppliers must agree to in writing regarding safety record, waste management and greenhouse gas emissions helps ensure your entire supply chain is helping your company meet decarbonization and sustainability goals. Set operating agreements and separate performance metrics to follow up on, conduct regular audits and update your partners on any certifications you require. While some international companies may be reluctant to comply in the absence of governmental mandates, the tide is quickly turning in places like the UK and other European nations, who recently began pushing on due diligence proposals and forcing organizations to clean up their supply chain operations. When bigger, multinational companies with larger purchasing power begin enforcing these expectations, smaller organizations can demand the same standards. There is a bit of a follow-the-leader mentality in this endeavor, and by being the company in front of the issue, you can force the industry to catch up and have a say in the standards being established. As it turns out, competitive pressure is good for the environment.
Monitor Impact Regularly
It’s difficult to prove or prioritize sustainability when you are not able to consistently measure the results of your efforts. Using automated monitors for heavy industrial equipment or lighting control systems to track energy consumption can demonstrate quantifiable improvements in energy efficiency and carbon reduction. Having these metrics not only verifies the results of your efforts but can also help calculate ROI for the total cost of ownership over the up-front cost for investing in energy-efficient equipment. When you can show long-term benefit with empirical evidence, it turns a CapEx into an investment in long-value. Investing in energy efficient equipment and solutions will maintain and support your progress towards decarbonization so that you’re not constantly playing catch up.
Even for industries that are heavy emitters, such as oil and gas or even chemical manufacturing, for example— there are plenty of steps that can be taken to reduce your carbon footprint and any effort, big or small, can have a positive impact on the environment. By changing the organizational mindset from one of immediate gratification, ROI and cost-savings to one that prioritizes long-term investment, total cost of ownership and forward-thinking solutions, companies can make considerable and legitimate progress in their sustainability goals while also benefiting from higher-performing, longer-lasting products.
Fariyal Khanbabi is the CEO at Dialight, global leader in industrial LED lighting technology. Khanbabi brings over a decade of C-suite experience to her role, having formerly worked as CFO at Harvest Energy and Britannia Bulk, LTD. Having spent her entire career in the technology space, Khanbabi has become accustomed to being the only woman in the room and thus has proven to be a strong advocate for women in the workplace, especially in the LED industry.