How trailblazers forge sustainability in manufacturing, heavy industry

Discover insights from Finnish manufacturing and heavy industry sustainability leaders on more sustainable futures.

In brief:

• Businesses need to make transitions beyond simply fulfilling sustainability requirements to actively deriving value from sustainability practices.
• They must assess their readiness for significant investments into green manufacturing despite uncertain customer demand.
• It is crucial to engage and help empower all members of the organization, as well as those in value chain, to actively participate in the sustainability agenda.

With the Trailblazers of Sustainability report vol. 2, we are continuing our conversation with sustainability leaders on organizations’ efforts toward more sustainable futures — this time through the lens of manufacturing and heavy industry in Finland.

Preparation to meet growing sustainability expectations from regulators and customers

The global landscape of environmental, social and governance (ESG) is rapidly evolving, demanding a response from organizations to realign their operations in the new business environment. The evolution is characterized by four forces of change. New stringent ESG regulations, such as Corporate Sustainability Reporting Directive (CSRD), require companies to disclose comprehensive information on their environmental and social impacts, moving away from selective voluntary reporting to full transparency. According to carbon disclosure project (CDP), B2B clients are increasingly prioritizing sustainability, expecting partners to demonstrate sustainability certificates, credentials and practices, which can be a decisive factor in business negotiations. Consequently, this sets businesses to increasingly evaluate the sustainability efforts of their value chain to align with these demands.

In parallel, companies are becoming more ambitious on sustainability, recognizing it as a strategic imperative and wanting to be leaders in their fields with the most leading-edge products and solutions. The final push comes from investors who are pressing for transparent and effective ESG disclosure. An EY survey showed that a staggering 88% of investors feel companies often provide bare-minimum ESG information and 73% say that companies have failed to help create enhanced reporting that supports decision-making.

With this compelling and complex context, we set out to explore how the trailblazers are not only navigating but also actively driving forward their sustainability agenda. With the focus on manufacturing and heavy industry, we are returning with the second edition of Trailblazers of Sustainability to the discussion of sustainability transformation. The rationale for choosing this industry is compelling: It contributes to over 30% of global greenhouse gas emissions (IPCC report) and stands as a key economic sector in Finland, placing it in a vital role in fighting climate change.

Trailblazing the future

While impacted by the four forces of change, companies are simultaneously faced with several challenges in their sustainability journey. The enormous increase in ESG regulations within a relatively short period poses both resource and time challenges for companies. Challenges with adhering to the reporting demands are amplified especially with Scope 3 emissions. Scope 3 emissions represent the largest share of total emissions (75%) as reported in the CDP’s study and at the same time are the hardest to measure due to, for example, data limitations and complex supply chain networks. Simultaneously, the term "sustainability" may be perceived by some as merely a trendy buzzword, introducing an additional layer of complexity when trying to engage all people across organizations. Another key challenge relates to aligning the supply and demand of green products; how to make the right green investment call in an environment with a not yet clearly established demand for greener products?

The findings reveal that integrating sustainability into the core of trailblazing companies’ strategy is key to translating it into a competitive advantage. Additionally, trailblazing companies are setting various means for engaging people across the organization to join the sustainability work. A defining feature in manufacturing and heavy industry is the critical role that engineering skills and pioneering technology play in driving sustainable business development. Knowing the organization, framing challenges in the right way and giving recognition where it is due are critical for an innovative culture. Furthermore, a joint effort is crucial both within the company’s internal and external networks to achieve meaningful ESG progress. To turn efforts into results, robust ESG metrics and reporting need to be harnessed to inform strategic business opportunities.

Glimpse into sustainability leadership in manufacturing and heavy industry

To conclude, while not comprehensive, this report is designed to offer a glimpse of inspiration drawn from our discussions about the current factors influencing sustainability in the manufacturing and heavy industry sector. It delves into the ways in which companies are responding and what drives the trailblazers to exceed mere compliance and strive for greater impact in their sustainability efforts. We hope this report not only provides you new insights but also inspires action for what lies ahead, sparks meaningful dialogue on sustainability within your organization and encourages businesses to pioneer new paths, guided by the tangible successes showcased here.