May 11, 2023

It’s time to take inventory of the ESG (Environmental, Social, and Governance) landscape. A company’s ESG is the framework of how a particular organization manages risks and opportunities in response to these three pillars and shines a light on how they drive sustainability.

The manufacturing industry has faced challenges in mitigating the rising concerns of how the global environment is impacted at large by greenhouse emissions, air pollution, and toxic waste that has been running rampant. Many believe that making a manufacturing plant “green” or holistically sustainable will be exceedingly costly or not profit-optimizing in the long term, but that couldn’t be further from the truth.

Many organizations are taking a stand against the dangers of neglecting their responsibility to protect the planet. Several key players voluntarily comply with regulations and frameworks set in motion to circumvent the rising concerns regarding manufacturing plants causing widespread damage.

Here is why it’s imperative to look at how sustainability impacts business operations according to the EPA:

• About 7 in 10 distributors face pressure to reduce wasteful labor and consider the environment. Heartland’s Sustainable Warehouse System uses state-of-the-art technology and methodology to help businesses reduce their carbon footprint.
• Conservation appeals to customers by attracting them to your mission to preserve the well-being of future generations.
• Sustainability strengthens the brand and builds public trust, increasing the probability a company will remain in the industry long-term and continue to enjoy growth.
• Greener policies aid in cutting costs by promoting employee retention. Employees desire to work in conditions where health is not at impending risk. Otherwise, they may look to competitors with healthier conditions and benefits.
• Going green reduces costs. Energy and water are grounds for draining excess capital for manufacturers. However, annual reports show improved systems with efficient manufacturing correlate with decreased utility bills.
  
  

Due to these monumental global gains and profit opportunities, we are seeing manufacturers making commitments to:

• Manage waste: According to Deloitte, one-fourth of surveyed manufacturing executives agreed that developing better waste management systems and using the latest technology to improve product recycling would make manufacturing plants more sustainable.
• Increasing supplier diversity: Supplier diversity programs benefit the economy by increasing job-seekers that will choose to go into manufacturing (64% of millennials say they won’t work for companies that perform poorly on corporate social responsibility) but also the social responsibility index due to working with many businesses from various socioeconomic backgrounds.
• Elevating Smart Buildings: Technology-enabled smart buildings assist in achieving carbon neutrality. Deloitte sites a technology manufacturer that has achieved carbon neutrality because they source 100% renewable electricity for their facilities.
• Electrifying fleets: The Department of Energy’s programs to strengthen battery supply chains can aid companies in electrifying their vehicle fleets. Electric fleets are competitive because they last longer than non-electric vehicles, have lower operational costs, and have simpler maintenance procedures. Electric vehicles are expected to make up 10-15% of commercial and passenger fleets by 2023.

Sustainability is a promising road to enterprise efficiency and marketability worldwide. We are eager to help businesses incorporate warehouse practices that will adhere to ESG criteria and impact the world outside the borders of facilities and storehouses. Reach out to our team to see how to change the planet one improvement at a time.