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Compliance, Not Marketing, Motivates Manufacturers to Adopt Sustainability

Manufacturers increasingly are viewing sustainability through the lense of compliance, instead of marketing, suggesting a shift in perception from opportunity to cost, according to “Sustainability Reporting and Greenhouse Gas Management—Sensing Market Trends and Evolution in U.S. Manufacturing,” a report (PDF) from AMR Research and SAP.

What a difference a couple of years makes. In 2008, manufacturers overwhelmingly cited gaining a competitive advantage with the corporate brand as a top driver for participating in enterprise sustainability, with 33 percent listing that as a top reason.

Now, just 12 percent cite gaining a competitive advantage with the corporate brand as a top driver.

On the flip side, in 2008 just 11 percent of manufacturers cited compliance with regulatory requirements as a top driver, but now 27 percent list compliance as a top driver.

Staying fairly steady, about 28 percent of manufacturers cited business value as the main driver, down slightly from 29 percent in 2008.

For the 2010 survey, 189 manufacturers responded, down from 236 in 2008. Companies were asked to choose three top drivers.

Best-in-class manufacturers typically reduce their energy consumption by 24 percent compared to laggard companies that increase their energy use by 6 percent, according to benchmarking research from Aberdeen Group.

Other findings from Aberdeen reveal that best-in-class companies reduce their emissions by 30 percent, outperform goals for operating margin by 19 percent, and achieve 89 percent overall equipment effectiveness (OEE).

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4 thoughts on “Compliance, Not Marketing, Motivates Manufacturers to Adopt Sustainability

  1. The link between improvements in OEE and an increase in energy efficiency has long been proven. Breakdowns, multiple inefficient start-ups, slow-running equipment, rejects and under-utilised capacity all have a major impact on energy consumption – so operating plant as effectively as possible can result in impressive savings. Using an OEE system, a leading food manufacturer in the UK reduced it’s gas consumption by 7% and achieved an annual saving of just under £400k. The results speak for themselves: http://idhammarsystems.com/case%20studies/oee/food%20and%20drink/british%20bakeries/

  2. Ultimately, it is all about the potential opportunities and threats to the corporate brand and to the shareholders pockets. By being an early adopter, companies had an opportunity to bolster brand image. Now that the pack is catching up, it’s more about risk of being left behind. Risk of being called out by environmental groups or consumers if they find a company doing something obviously not green, or even risk of not being an early adopter of cost-saving technologies. Regardless, it is interesting to see the way we all are changing our perceptions of ‘green’.


  3. Kinda reminds me of past recessions when the first thing cut was ad budgets. Oddly, in competitive markets, those who saw opportunity in innovation in a marketing sense were those who came out earlier and stronger.

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