Climate Change

Is a sustainable manufacturing industry economically viable?

Tiffany Misrahi
Vice-President of Policy, World Travel & Tourism Council (WTTC)
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Manufacturing is an industry that can bring a competitive edge to countries worldwide. However, if the goal is to have a long-term and sustainable approach, the industry cannot only be economically sustainable but also environmentally friendly.

Since the Industrial Revolution transformed society’s interaction with the environment, there has been a drastic increase in the use of natural resources and in the demand for new products. In 2012, patterns still look the same: people consume more than ever; population rates continue to rise; and the environment deteriorates.

This increase in global consumption hasn’t been caused only by the growing middle class in emerging economies. Think about how often we buy a new mobile phone and, more importantly, what we do with our old ones. Every year there is a 35% growth in mobile-phone subscriptions. How many plastic bags do we take when we go to the supermarket? According to statistics, between 500 billion and 1 trillion plastic bags are used worldwide each year. The numbers are huge and something has to be done.

In fact, climate change and resource depletion have risen to the top of the agenda. According to the Forum’s 7th Edition of the Global Risk Report, rising greenhouse emissions is the third most important global risk. According to research, the manufacturing sector accounts for more than a third of global CO2 emissions. As such, it is a key issue for the industry to tackle.

A sustainable manufacturing industry will require a multistakeholder approach. The effort needs to be led jointly by business and government, enabling long-term policies need to be implemented and incentives put in place. Resource-efficiency and environmental competitiveness need to become a core component of corporate strategy and business models. According to the Forum’s Sustainable Consumption report, businesses can play a leading and enabling role by transforming demand through interactions with consumers, remodelling value chains through new business models and changing the rules of the game through Public-Private Partnerships.

As we move towards sustainable manufacturing, there are a range of issues we will need to consider, including product design, innovation, recycling, waste management, infrastructure, financing, green pricing, renewables, life-cycle assessment, governmental support, energy usage, available low-carbon technologies, legislations, market conditions, consumer needs and many more.

What we need is for the manufacturing industry to continue to take a proactive approach to improving the recycling of existing products and to develop cleaner manufacturing products and processes. While making these changes will imply short-term costs, there are clear long-term economic and social benefits to making the industry more environmentally friendly. As Ben Verwaayen, CEO of Alcatel-Lucent, said: “Being green is not an option, it is a natural necessity.

Can you think of some success stories in making manufacturing sustainability a reality?

*Tiffany Misrahi is Research Analyst, Global Agenda Councils at the World Economic Forum.

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