Sustainability: Aligning ESG and Asset Management in Sustainable Manufacturing
THE IMPORTANCE OF COMMUNICATION AND STRATEGIC PLANNING
A Tug-of-War Environment
Have you ever felt like a "tug-of-war" is being played between your Operations and Maintenance teams? This scenario is common in sustainable manufacturing, where both departments compete for time with the same assets.
Operators are focused on meeting production goals and profitability, while maintenance teams prioritize preventive and corrective actions to maintain equipment’s optimal condition. Both perspectives are vital for operational efficiency, profitability, and sustainable manufacturing practices, but they require careful coordination and execution.
This tug-of-war is often intensified when organizational goals, aligned around competing performance metrics, are not communicated or synchronized effectively. Without alignment, misunderstandings arise, hindering not just performance but sustainability goals as well.
Consider how corporate strategies like Environmental, Social, and Governance (ESG) fit into the equation.
Aligning ESG with Sustainable Manufacturing Goals
The environmental component of ESG focuses on reducing carbon emissions, energy consumption, waste generation, and resource depletion. Yet, despite the growing corporate interest in sustainability, only about 30% of the Fortune Global 500 have a clear goal and a documented plan that is all renewable, carbon-neutral, or science-based.1
Leading companies, such as Microsoft, are taking bold steps to align their manufacturing operations with sustainability goals. Microsoft set one of the most aggressive climate goals to become carbon negative by 2030, and by 2050 removing all carbon it had emitted since it was founded.2 However, achieving such goals requires more than lofty statements—it necessitates comprehensive alignment of all teams, including those managing assets.
Are your operations teams aware of how their actions impact sustainability goals? Many times, frontline operators and maintenance teams aren’t fully aware of how their work ties into broader ESG initiatives. When their day-to-day efforts aren’t aligned with sustainable manufacturing and ESG strategies, the disconnect can undermine progress toward sustainability targets.
The Role of Asset Management in Sustainability Reporting
Financial reporting standards like SASB and TCFD now scrutinize ESG data with the same rigor as financial data. For CFOs, this means understanding real-time operational metrics to accurately report sustainability data, like the carbon emissions from specific assets, including energy-intensive equipment such as compressors and heat exchangers.
In sustainable manufacturing, asset management plays a pivotal role in reducing emissions. Frequent equipment failures increase the carbon footprint due to additional maintenance, replacement parts, and increased energy consumption. Yet, sustainable asset management practices can minimize these inefficiencies and support sustainability goals.
Leveraging Digitial Transformation for Sustainable Manufacturing
The digital transformation in asset management is enabling sustainable manufacturing through better data integration and predictive maintenance. By collecting and analyzing data on equipment health, energy use, and materials consumption, organizations can make informed decisions that minimize waste and optimize energy use.
Reliability teams today are using predictive analytics to foresee equipment failure before it happens, helping reduce unnecessary material consumption and energy waste. This proactive approach not only improves asset uptime but significantly contributes to sustainability and ESG objectives.
Social Implications and Workforce Alignment with ESG Goals
The global health crisis and social movements have underscored the need for organizations to be socially responsible and transparent. Employees are increasingly choosing to work for companies that prioritize social responsibility and contribute to sustainable manufacturing practices that benefit the community.
One company has achieved impressive results by aligning their maintenance strategy with ESG principles. Through efficient maintenance planning and scheduling, they saw a 21% improvement in overall maintenance efficiency, which contributed to sustainability efforts. Importantly, this also allowed the company’s employees to dedicate time to community-focused initiatives, reinforcing their commitment to a sustainable future.
Cultivating a Sustainable Culture
Building a culture aligned with sustainability goals requires clear communication and purpose-driven leadership. In organizations that have aligned their operations with ESG goals, employees feel more connected to the company’s broader mission. Whether it’s enhancing sustainable manufacturing practices or promoting social good, this alignment fosters a sense of ownership and accountability toward a shared, sustainable future.
Conclusion: Strategic Sustainability Starts with Asset Management
For companies aiming to achieve sustainable manufacturing, aligning asset management with ESG strategies is critical. However, many companies still lack clear, actionable plans to implement these goals. It’s time for leaders to move beyond rhetoric and take a results-oriented approach to ESG and sustainability.
By adopting a structured, sustainable asset management approach that integrates ESG principles, companies can drive efficiencies, reduce waste, and contribute to a greener future. Allied Reliability can assist in aligning your ESG and asset management strategies to achieve sustainability goals.
Register for our free one-day executive workshop, “ESG and Asset Management: Designing the Journey” and learn how to integrate sustainable practices into your operations to meet your sustainability objectives.
About the Author
In his current role with Allied Reliability, Chris is responsible for building successful relationships and engagements between Allied and its clients. He supports client teams’ execution strategies and is instrumental in helping Allied’s teams deliver world-class service and value. Chris focuses on business improvement elements that yield a measurable return on investment through sustainable change.
Chris has over 24 years of experience in the industry with a focus on engineering, reliability, design, maintainability, and energy management. Prior to joining Allied, Chris worked for a large electrical and mechanical contractor. Additionally, Chris has experience in a wide range of industries, including oil & gas, primary metals, mining, food & beverage, power generation, automotive, and pharmaceutical.
Chris graduated from the University of Louisville with a Bachelor of Science in electrical engineering and has been an IEEE member for 23 years. He is a Certified Energy Manager (CEM) through the Association of Energy Engineers and a Certified Maintenance and Reliability Professional (CMRP) through the Society for Maintenance and Reliability Professionals (SMRP). He is the co-author of the book Clean, Green, & Reliable – How equipment reliability delivers low-cost, energy-efficient assets to plants around the world. He has taught numerous seminars and written multiple articles to help educate engineers and maintenance personnel worldwide on maintenance and reliability and energy management best practices.
Connect with Chris on LinkedIn.
References
- “Response Required: How the Fortune Global 500 Is Delivering Climate Action and the Urgent Need for More of It,” Natural Capital Partners, October 6, 2020, https://www.naturalcapitalpartners.com/insights/response-required.
- Brad Smith, “Microsoft Will Be Carbon Negative by 2030,” The Official Microsoft Blog (blog), January 16, 2020, https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030.
ABOUT ALLIED RELIABILITY
Allied Reliability provides asset management consulting and predictive maintenance solutions across the lifecycle of your production assets to deliver required throughput at lowest operating cost while managing asset risk. We do this by partnering with our clients, applying our proven asset management methodology, and leveraging decades of practitioner experience across more verticals than any other provider. Our asset management solutions include Consulting & Training, Condition-based Maintenance, Industrial Staffing, Electrical Services, and Machine Reliability.
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