Enabling a Sustainable Industrial Organization

Trend #2 Human workers are still your greatest asset

The 9th Annual State of Smart Manufacturing Report found that 94% of organizations expect to maintain or grow their workforce as a result of manufacturing technology adoption. Supplementing and amplifying workforce with cobots, autonomous mobile robots (AMRs), automated guided vehicles (AGVs) and wearables—all ranked as top investments areas for 2024.

Labor challenges continue to be one of the top cited struggles facing sustainable industrial organizations. The 9^th Annual State of Smart Manufacturing Report found that “respondents plan to use new and emerging technology to amplify their workforce, fill the skills gap and maintain quality against a backdrop of employee turnover.”

Leverage automation to do the repetitive tasks in your facility, and free up your workforce to perform high-impact tasks that require skill. As the report says, “manufacturers have cited a lack of skilled workforce as the top reason they will struggle to outpace the competition.”

As an example, you can assign an AI tool to analyze large datasets faster and more accurately than your workers. That frees up your workers to do the more impactful work of making outcome-driven decisions based on that data.

Plus, the well-being of your workers is critical in advancing your sustainability efforts and improving your Environment Social Governance (ESG) performance.

As a reminder, the Social dimension of ESG criteria encompasses initiatives related to employee well-being, diversity and inclusion, and community engagement. Recent studies found that organizations with strong employee well-being initiatives outperform companies listed on the S&PK 500 index.

How a sustainable industrial organization can invest in their employees

• Developing valuable and ongoing employee education and training programs that upskill and reskill employees who will be doing higher level work as automation processes are implemented to do rote, repetitive tasks.
• Cultivating a diverse, equitable, and inclusive work environment so that employees are empowered to do their best, most productive work.
• Improving the safety of the work environment, which leads to fewer disruptions in operations and lowers healthcare costs for the organization.

In other words, human workers at a sustainable industrial organization are not going anywhere. In fact, they're key assets to sustainable industrial organizations.

Action Item

Sustainable industrial organizations encourage employees to voice their opinions. Consider developing anonymous surveys, focus groups, online forums, and/or an open-door policy with managers. Enable employees to speak openly and safely about their level of well-being and what the organization could improve.

Trend #3 Stay ahead of regulatory changes

Today, manufacturers are not only concerned with their own sustainability efforts but also those of stakeholders across the entire supply chain. Manufacturers are increasingly adopting a holistic approach, collaborating with suppliers and partners to achieve sustainability goals and move to net zero. For companies with global operations especially, staying ahead of ESG regulations in different countries can be a challenge, which is why adopting the right technology and partnering with the right companies is crucial.

In the US, under the Securities and Exchange Commission's (SEC) long-awaited final rule, registrants will be required to disclose, if material, both their Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions. These include both the company’s direct emissions (emissions that come from the company’s operations, and that the company owns or controls) and its indirect ones (emissions generated by purchased electricity, steam, heating, and cooling).

In Europe, the Corporate Sustainability Reporting Directive (CSRD) requires EU businesses—including qualifying EU subsidiaries of non-EU companies—to disclose their environmental and social impacts, and how their environmental, social, and governance (ESG) actions affect their business. The regulation includes reporting also on emissions data from across supply chains, commonly referred to as Scope 3 emissions, which completes the greenhouse gas inventory and is oftentimes the most complex to address.

Manufacturers cannot afford to fall behind on ESG policies. Sustainability efforts must be taken early on and therefore extend across the entire supply chain and leverage cooperation across companies. Regulatory changes and government incentives have been instrumental in shaping this new landscape and motivating manufacturers to incorporate sustainability into their operations.

Action Item

Be proactive in incorporating sustainability within and across your operations. Expand your sustainability committee to include suppliers, product designers, customers, investors, and any other key sustainability stakeholder. Stay up to date with changes in the landscape and consult thought leadership resources such as those from the World Economic Forum.

Trend #4 Continue to equate sustainable industrial organization practices with productivity

There is no question that improved sustainability leads to improved productivity. The main reason that industrial organizations pursue sustainability is because it will increase efficiencies.

The link between sustainability and productivity is apparent on the world stage, as well. At Davos 2024, much discussion was had about making sustainability more achievable and ROI-focused.

For Cyril Perducat, SVP and Chief Technology Officer at Rockwell Automation, a big takeaway from Davos is that sustainability must be translated into something highly doable and ROI-focused for organizations:

“We need to make sustainability even more practical and actionable so that people understand, ‘If I invest in this way, here are the benefits I’m going to get, the time I need to implement, and the return on investment I’m going to get.’”

In other words, when sustainability efforts are practical, connected directly to ROI, and have a clear timeline, organizations will be more willing to commit.

Learn more on key takeaways from Davos 2024 here.

Action Item

Read first-hand accounts of how other sustainable industrial organizations have achieved improved efficiencies by prioritizing sustainability efforts.

Want Practical, ROI-Focused Help Becoming a Sustainable Industrial Organization?

At Rockwell Automation, our consultants and solutions help you determine and achieve sustainability goals in a way that works for you. Our recommendations prioritize your organization’s productivity and profitability.

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