Sustainability – the blame game
The goal of global sustainability efforts is to achieve a better and more sustainable future for all. Every country, government, business and individual plays a part in seizing control of carbon emissions to limit the earth’s temperature rise to 1.5°C above pre-industrial levels. Many businesses are taking a leading role in translating global needs and ambitions into business solutions. However, the journey to net-zero emissions is both massive in scale and complex in execution.
Over the past decade and a half, companies have navigated a severe worldwide economic crisis, the ongoing pandemic of coronavirus disease and geopolitical conflicts. Businesses are grappling with instability in their supply chains and global economic conditions that could worsen in the months ahead as inflation balloons around the world.
Despite the tremors of these significant global events, many business leaders believe that managing the net-zero transition will be the biggest challenge their business has ever faced. A report commissioned by Castrol on the transition to a sustainable global economy indicated that 71% of business leaders and 62% of operational professionals in the automotive, industrial, manufacturing and marine sectors consider the transformation their number one challenge. Castrol’s report also suggests that sustainability is essential to commercial success. Over three-quarters of business leaders (76%) and 68% of operational professionals said improving the sustainability of their operation is critical to meeting customer needs.
On April 27, 2022, during the ALIA Annual Meeting in Bangkok, Thailand, Starry Dong, Castrol’s vice president for sustainability and operational excellence shared with participants the five key lessons from the study prior to its official release in August. Her team is responsible for developing Castrol’s global and market strategies, sustainability plans, digitalization and value-added activities to drive commercial and operational excellence. She is also a member of Castrol’s global leadership team.
The report, entitled The Sharp End of Sustainability, was commissioned to better understand how the automotive, industrial, manufacturing and marine sectors are approaching the transition to a sustainable economy, says Dong. The research considered the opinions of 1,180 business leaders, predominantly C-suite executives, and 1,680 operational professionals across 14 markets, including the United States, United Kingdom, Germany, Singapore, China, India, Vietnam, Australia, New Zealand, Brazil, Greece, Turkey, France and Norway.
The report provides valuable insight for business leaders on the application of sustainability work by enlisting the views of operational professionals tasked with delivering the strategies.
Castrol reported general confidence from business leaders in their sustainability strategies and progress with 89% of respondents confident their businesses will be net-zero by 2050. Despite the apparent bullishness of business leaders, the same faith does not present on the front line. Only 68% of operational professionals believe their businesses will attain the net-zero target. Castrol’s report highlights a clear disconnect between business leaders and operational professionals when it comes to turning sustainability strategy into reality.
“This study said that improving the sustainability of their business is key to meeting customer needs,” says Dong, “but in our findings we see that on the ground workers are sometimes apprehensive that their businesses are not taking actions required to meet the challenge.”
“Almost half of the operational professionals involved in this research reported that they believe that their sustainability strategy isn’t a priority for their leadership team.”
It is not uncommon for business leaders and their employees to have conflicting opinions on the progress of an organisation. 64% of business leaders surveyed reported that sustainability is “at the core of everything their organisation does.” However, the report draws attention to issues around cascading sustainability strategy throughout an organisation in a way that is supported and actioned by their workforce.
Business leaders responding to the survey indicated that just 40% of their employees understand their sustainability strategy and only 36% agree with it and are actively delivering it. Though, leaders in the marine industry were more positive, with 96% reporting clear sustainability criteria attached to every procurement decision and 99% claiming a clear and widely understood sustainability strategy.
Castrol’s report paints a different picture from operational professionals—who are unconvinced of the commitment to sustainability of their leaders. Almost half of operational professionals involved in the study claimed that the sustainability strategy isn’t a priority for their leadership team. A need to prove that sustainability is a priority was one of the key findings of the research. Many operational professionals (48%) noted a lack of clear targets around sustainability, with the same number identifying the absence of a clear business strategy around sustainability. The lack of vision from business leadership (47%) was also pinpointed as a barrier to progress.
A gap between perceptions around strategy and action raises serious concerns over the progress of sustainable business models. However, Castrol emphasised that the results of the study should not be used as part of a blame game, but rather to inform the actions of business leaders. The UK-based global lubricant company stressed the importance of a fully engaged workforce to successfully implement strategies and ensure meaningful progress.
Energy efficiency could be the “low hanging fruit” for energy-intensive companies in their quest to reduce carbon emissions, says Dong. Most operational professionals (72%) saw improving energy efficiency as the most effective way to reduce carbon emissions and two-thirds recognised that energy-efficient machinery was integral in their own organisation’s transition. Workers identified a range of tactics including effective maintenance of equipment, upgrades and modifications and implementation of new, more energy-efficient technologies. Although, only 51% of business leaders rated energy-efficient machinery as an important part of their business transition.
A need for more robust and reliable data was outlined in The Sharp End of Sustainability. 76% of business leaders identified a need to improve data management in their businesses to inform sustainability efforts with 82% noting the opportunity to make better use of existing data.
Both operational professionals (69%) and business leaders (76%) recognised the opportunity for better application of data-driven predictive maintenance to reduce both maintenance costs and energy consumption. The report suggests operational professionals are typically more positive about the potential of this technology in the transition to a more sustainable business model. Although, leaders in the automotive sector went against the grain with three-quarters of respondents supportive of predictive maintenance as a technology in the sustainable transition compared to 57% of operational professionals.
Sustainable waste management is an increasingly vital process to reduce the volume of natural resources consumed. The Castrol report underlined waste reductions as an important first step in sustainability programs, particularly for resource and energy-intensive organisations. While 63% of business leaders claimed waste reduction targets were in place and a similar number (61%) employ targets around water reduction, Castrol highlighted concerns around the awareness of waste reduction targets by operational professionals. Further, only 58% of operational professionals believe that waste reduction targets are important to their business and a low 43% support water use reduction targets. The report suggests that messages around water conservation are failing to flow effectively throughout the businesses.
This trend is not reflected in the manufacturing sector where reducing waste to landfill is the top organisational priority for operational professionals and business leaders, and importance is also placed on ensuring products are recycled, recyclable or biodegradable.
For more information on this report, go to https://www.castrol.com/en_gb/united-kingdom/home/castrol-story/newsroom/press-releases/the-sharp-end-of-sustainability.html.