According to the World Economic Forum (WEF) (2022) global production sectors are responsible for one-fifth of carbon emissions, consuming 54% of the world’s energy sources. While the manufacturing and production sectors are key drivers for economic growth, comprising 16% of global GDP, activity from these sectors also poses serious environmental risks that must be collaboratively addressed.
According to the Circularity Gap Report (2020), the world is using up more than 100 billion tonnes of natural resources per year for the first time ever while global recycling of raw materials has fallen. This data requires immediate attention from governance and user industries. According to various published sources, the climate, water and environmental impact will lead to price increase by — 70-90% on Food; >200% on energy, and >90% on metals by 2030, vis-a-vis 2015. A Bloomberg report (2021) stated that a record $120 billion was invested on green, sustainability projects, as a result of Government regulations for organizations to comply with stringent Environment, Social & Governance (ESG) targets, that includes carbon emissions accounting and various parameters including equal pay, gender equality and more.
A recent study by communications firm Edelman found 58% of consumers now buy from companies that share their beliefs and are more sustainable in the manufacturing of their products. The ESG challenges the world faces today is significant and urgent, meaning organizations across sectors must step up and come forward in solving them. It should begin with manufacturers assessing the applicability of the Environment (E), the Social (S) and the Governance (G) to their business and using those insights to develop strategies and action-plans, and act to improve performance.
ESG is the most viable route to preserve the precious and finite resources on our planet. A strong ESG framework increases operational efficiency by reducing expenditure, and ensures overall business growth, as well as green image, universally.