Sustainable manufacturing, and environmental, social and governance issues, have been gaining prominence in the Australian manufacturing sector for decades. Even in the early 2000s, big manufacturers started receiving surveys from investors seeking to understand their carbon emissions footprints and mitigation strategies.

Since then, sustainable manufacturing has become an essential plank of many manufacturers’ business strategies. The CommBank Manufacturing Insights Report released in March 2022 showed this was the case for more than eight in 10 manufacturers.1

In addition, 70% of manufacturers believe that the sector is responding well to sustainability-related opportunities and challenges. Many of the attendees at CommBank’s recent Western Sydney Manufacturers roundtable agreed as they discussed a range of initiatives, from enhancing the workplace, to waste reduction and recycling and carbon reduction programs.

The benefits of a great workplace

As covered earlier in the series, talent shortages are one of manufacturers' most significant issues and were felt acutely by roundtable participants based in Western Sydney.

The CommBank Manufacturing Insights report2 revealed that workplace health and safety and wellbeing ranked number one among the sustainability initiatives being adopted across the industry. These were also the most likely to be progressing faster than expected.

The sharp focus among attendees on recruiting and keeping staff may help explain why the workplace, staff wellbeing and sustainability are inextricably linked.

The second most commonly adopted sustainability initiative related to diversity and inclusion. There was a consensus among attendees that increasing female participation was important, welcoming the different approaches and perspectives women could bring to their business.

Keeping pace with changing expectations

The topic of waste reduction and recycling was also on the agenda, given that process efficiencies to match inputs and outputs are important to customers and the planet.

This aligned with the findings in the CommBank report that showed the top driver of sustainability was to keep up with market and customer demand. However, attendees noted some of the challenges still to overcome, offering strategies for improvement.

Michael Hornby, National Operations Manager at Dincel Structural Walling, said, “our major focus is recycling products that end up on customers’ sites to reduce the amount of product we produce that goes to landfill.”

“We work with customers to match what they need and work with them to have sustainable disposal solutions,” Michael said. “The big problem is that at the end of life, we need to recycle the product and are working through how to separate concrete, steel and plastic”.

“Where those materials can’t be separated, waste companies won’t divert that product from landfill and recycling plants won’t accept it.” 

Another attendee said that manufacturers must consider a broader spectrum of issues to keep pace with customer expectations. They said that now, customers want to understand operational aspects such as “modern slavery compliance, where products have been sourced, and whether supplier workplace practices are acceptable or not”.

Overcoming barriers to progress

The most cited barrier to advancing sustainability initiatives is a lack of government incentives, according to CommBank’s Manufacturing Insights report. This was noted by almost one in two manufacturers.

However, some manufacturers are taking advantage of existing grant programs to balance the cost of switching to greener solutions, including renewable energy generation. The report also found that even of the available incentives, only 39% of manufacturers had accessed them.

One such business is duck farmer and producer, Pepe’s Duck. Its Chief Financial Officer, David Fox, said, “as a business, we have been using rooftop solar, and with government grants, it’s now commercially viable to do so. We’re also saving money on our energy costs, so there’s an efficiency benefit”.

This sentiment summed up the key drivers of sustainable manufacturing. Not only is it about meeting the expectations of society and the market, but it makes good business sense too.

Things you should know

  • 1 

    This article is published solely for information purpose. As this article has been prepared without considering your objectives, financial situation or needs, you should before acting on the information in this report, consider its appropriateness to your circumstances and if necessary seek the appropriate professional advice. Any opinions, views of contributors, conclusions or recommendations are reasonably held or made, based on the information available at the time of this article’s compilation, but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article.

    Commonwealth bank of Australia ABN 48 123 123 124.