{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
Machinery and equipment (M&E) manufacturers are taking steps to reduce their carbon emissions, in line with commitments by governments to reach net zero greenhouse gas emissions. However, only an estimated 5% of the overall CO2 emissions are created during the process of developing and manufacturing their own products.
Right now, most M&E companies are paying very little attention to the emissions being produced outside their own walls. Put simply, they are focusing their efforts in places less suitable when it comes to emissions reduction. In this report, we assess the current track record of leading M&E companies on emissions and examine how their efforts correspond with the most significant emissions drivers across the value chain. In light of the results, we set out how companies can focus their attention downstream to effectively reduce CO2 emissions and provide five concrete actions to boost their sustainability.
“The GHG Protocol breaks greenhouse gas emissions down into three categories: Scope 1 emissions are defined as those caused directly by an organisation’s activities while scope 2 emissions count indirect emissions resulting from an organisation’s energy consumption. Scope 3 emissions are defined as all other indirect emissions, caused along an organisation’s value chain.”
The challenge for the machinery and equipment sector in tackling and reducing Scope 3 emissions
Right now, M&E companies are still at an early stage when it comes to addressing their so-called Scope 3 emissions, those generated beyond their own production and premises. Compared to other industries, such as chemicals, pharma or electricity producers, the M&E sector has a far more downstream-heavy CO2 emission split, with emissions defined within ‘use of sold products’ making up by far the largest part of their Scope 3 emissions at 65%. By comparison, raw materials and intermediates, defined as ‘purchased goods and services’ and classified as upstream emissions, account for an estimated 25%. In addition, Scope 1 and 2 emissions produced during the process of developing and manufacturing their products, referred to as ‘own footprint’, only make up an estimated 5% of overall CO2 emissions.
Is the need to reduce CO2 a deeply embedded priority for companies, or are measures put in place in a relatively superficial way?
100%
80%
60%
40%
20%
0%
Sustainability is certainly on the radar in the M&E sector, but has yet to become a strategic priority: more than 90 percent of the companies reviewed mention sustainability on their websites and in their annual reports, or produce separate sustainability reports. Further, 85%, have defined specific CO2 reduction measures.
Looking at how M&E companies translate their sustainability ambitions into specific CO2 reduction targets, only 43% have put in place specific targets. In addition, only 14% of companies have a net zero target. High-level CO2 reduction roadmaps that define major milestones tied to the reduction targets could only be identified for one company within our dataset.
Five specific actions for machinery and equipment makers
Our study suggests five specific actions for M&E companies to successfully reach their sustainability targets:
1.Make sustainability a strategic priority
2.Create transparency
3.Develop a decarbonization roadmap
4.Make sustainability a focus of product improvements
5.Re-evaluate cross-value chain CO2 reduction potential
How machinery and equipment companies can reduce the imbalance between current CO2 emissions and their reduction measures
The M&E companies reviewed showed relatively low level of maturity in terms of their CO2 target setting, reduction roadmaps, the quantification of the impact of CO2 reduction measures, or the general role of sustainability within their organizations. This indicates that these issues have yet to become a key strategic priority with senior management teams.
Our study shows that companies do address emissions along the entire value chain, but only to a limited extent where the majority of emissions are generated.
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Contact us
