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.

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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

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?