With large corporations committed to sustainable production processes, the sense of urgency around establishing best practices has never been greater.
In late January, General Motors made an announcement that sent shockwaves through the automotive industry and delivered a clear message: Sustainability is a priority. In what the New York Times called a “seismic shift,” GM will aim to produce electric-only cars by 2035 and become carbon neutral across its entire fleet. The company will also switch to using only renewable energy across its American factories by 2030 and worldwide by that same 2035 target date.
With this commitment, GM is putting its money where its mouth is, as the need for sustainable initiatives increases in demand from both supply and consumer perspectives. The move could also expedite already-ongoing sustainability efforts across the auto industry, which employed around one million people in the U.S. in 2019 — far more than any other manufacturing sector. Efforts like these are yet another example of these companies stepping up in times of need — during the COVID-19 pandemic, GM and others transformed their factories to produce desperately needed ventilators to those in need.
The supply chain for the auto industry has such a large footprint globally, and there is optimism that small to mid-size suppliers will follow the lead of the big companies they work with. Also, with the U.S Government pursuing an aggressive policy on greener practices — and major companies pursuing their own initiatives,— these decisions and actions will go a long way in the fight against climate change.
However, there’s a push-pull effect when it comes to these efforts. Asking smaller manufacturers that often lack the same capital and resources as the conglomerates they work with to commit to streamlined greener practices is a balancing act. Any large-scale efforts made by companies like GM or Ford could be delayed if the materials they receive further down the supply chain aren’t up to the standards they hope to meet.
Furthermore, an analysis of 33,000 companies conducted from 2015 to 2017 by EcoVadis found that 73 percent of large businesses and 66 percent of small and mid-size businesses received a score of 40 or lower in regard to sustainability procurement, which measures how each part of the supply chain works towards sustainability. Bridging the gap between large and smaller companies and establishing an interconnected system — one in which each stakeholder understands their benchmarks — is the only way to create a healthy supply chain from top to bottom.
The question then becomes how best to rectify these deficiencies.
Recent findings from Oxford Economics and SAP found that the pandemic has only exacerbated the need for sustainability training. 33 percent of small and mid-size suppliers cited a lack of coordination between departments as a determining factor in regard to an inability to meet internal goals. A Harvard Business Review investigation suggests that large corporations could meet suppliers in the middle and train them on sustainability best practices as well as offer incentives for meeting environmental goals.
On the other hand small to mid-size companies need to institute their own measures. Coincidentally, the place to find the most positive momentum in this area comes from the automotive industry. With automobile production a global enterprise, major companies have had no choice but to take a hard look at their supply chains in an effort to reduce their carbon footprint. As a result, there’s hope for a butterfly effect, with the smaller businesses that rely on supplying these companies for their revenue recognizing it’s time to either get in line or risk being left behind.
As to where exactly this type of behavior can be mimicked, smaller companies might look to their production processes and the materials they’re using. Eliminating excess usage of raw materials and understanding supply and demand will help diminish harmful waste. For example, at Master Fluid Solutions, establishing green practices when it comes to metalworking operations has long been a priority. Its new TRIM® HyperSol™ 888NXT, an eco-friendly cutting fluid that contains biobased ingredients, is another giant step toward a greener direction. Ensuring that cutting fluids last longer through proper coolant management is another way to reduce environmental impact and create more efficient processes. Auditing these processes — as well as continually identifying the pollutants and wasteful practices that exist within production — is the best method toward a greener future.
If a company invests in fine-tuning its processes, it can become more profitable and set off a more prosperous and sustainable supply chain. What follows, then, is an ecosystem in which all involved are actively committed to reducing their environmental footprint with real economic incentive to do so.
In the fight against climate change, the conversation often trends towards doom and gloom. But efforts like that of worldwide governments and large corporations are cause for optimism that our negative impact on the environment will lessen. As the new decade takes shape, it will be imperative not to sink into complacency. Instead, we must hold businesses big and small accountable. It’s a monumental task, but no less than the liveability and health of the planet depend on it. If that doesn’t make it worth doing, what does?