While India aims to become a production hub of the world, one needs to take a close look at making India’s manufacturing sector sustainable. Dr Sunita Purushottam feels that the entire transformation process should be done with an effort to reimagine sustainability as a core attitude. 

 

Growing concern about environmental and social consequences throughout the world, dependency on scarce natural resources, and at the same time, generation of waste and environmental pollution have aided in the development of the sustainable manufacturing (SM) concept. The US Department of Commerce has defined sustainable manufacturing (SM) as “creation of manufactured products that use processes that are non-polluting, conserve energy and natural resources, and are economically sound and safe for employees, communities and consumers”, which clearly implies fostering of domestic and international conditions for doing business, in addition to fulfilling basic dimensions of sustainability. The biggest challenge that organisations are facing for implementation of SM is end user adoption. 

 

Sustainability issues are also becoming critical in one of fastest growing economies in the world, ie India, and most of the world’s manufacturing will be done in Asia within the next twenty years. This will create enormous environmental and social pressures in the manufacturing sector in India. 

 

Enablers

 

After discussions with industry leaders and research of publicly available sources, the following business enablers for manufacturing growth have been identified:

 

 

However, it is important that these enablers are aligned to business practices that are sustainable in nature. Thematic alignment with larger global issues such as climate change, environmental and social externalities, circular economy, shifting consumer demands are critical in this process.

 

What global companies are doing?

 

Sustainable manufacturing is a business imperative for all major brands. Some of the major manufacturing initiatives being launched across the world are: 

 

 

Government of India initiatives

 

Manufacturing has the potential to emerge as one of the high growth sectors in India and accordingly the sector has been given a major boost by the Government of India. 

 

Government launched Make in India initiative to revitalise the Indian manufacturing industry, especially for small and medium enterprises (SMEs) and make it an attractive investment destination.

 

Similarly, the government has taken many steps to improve ease of doing business in the country. It has taken initiatives such as fast tracking defense projects worth Rs 80,000 crore; extending validity of industrial license to three years; excluding major components of defense products list from industrial licensing; making process of obtaining environmental clearances online; deregulating dual use items having military as well as civilian applications;  making available the process of applying for industrial license & industrial entrepreneur memorandum online on 24X7 basis through eBiz portal, etc

 

Government has opened up many sectors for global participation. Policy in defense sector has been liberalised and FDI cap has been raised from 26% to 49%. The government has allowed 100% FDI in defense sector for modern and state of the art technology on case to case basis. Similarly, it has permitted 100% FDI under automatic route in construction, operation and maintenance in specified rail Infrastructure projects.

 

The government is also promoting the concept of Zero Defect Zero Effect. While ‘Zero Defect’ focuses on customer needs, while ‘Zero Effect’ focuses on society’s needs such as zero air pollution/liquid discharge (ZLD)/solid waste and zero wastage of natural resources.

The government has also introduced new regulations or has modified/amended existing norms pertaining to banking, environment, waste management, etc to facilitate manufacturing sector. 

 

But, is it enough?

 

It appears that there has been, to a certain extent, dilution of legislation, which is difficult to put a finger on. Relaxed clearances for land, diverting forest land for non-forest users like mining, construction and other, is a new reality that will have far reaching implications on the biota and the ability of nature to dilute pollutants. White (so-called) non-polluting industries do not need environmental clearances as per the EIA notification 2006. The easing of doing business must be viewed in context of tightening of various other operational regulations.

Tightening of regulations around air, water and waste for polluting industries has, however, helped government to drill some amount of seriousness in business in context of measuring and monitoring pollution. The Zero Effect Zero Defect (ZED) effort for MSMEs in manufacturing is a major initiative that actually must be leveraged by the manufacturing sector to produce goods that have zero defect ‘so that they are never returned’ and zero effect ‘so that there is no negative impact on the environment’. ZED, therefore, is the vehicle for sustainable manufacturing for MSMEs in India. However, ZED uptake has been poor. 

 

India has 51 million SMEs as of 2015. There are only 15 MSMEs that have got the ZED certification. Only 22 organisations have disclosed their sustainability reports as per GRI Disclosure database. There seems to be little motivation as some of the companies that have made their first sustainability report have not followed up with yearly reports. Clearly one would rather be being doing anything else than make a sustainability report or focus on ZED!

 

The barriers

 

Even though, several steps have been taken to escalate sustainable manufacturing in India, there are several factors that act as hindrance to fulfill the target. The main barriers identified are: 

 

 

These barriers are true for large and SMEs alike. The larger companies need to take a three-pronged approach to help strengthen their resolve and efforts for sustainable manufacturing. They should focus on self-operational EHS and sustainability excellence. Large companies should use ZED for engagement for operationalising sustainability for MSME/supply chain. They should leverage the GRI framework for sustainability reporting of self and MSME/supply chain performance. They can use a data driven approach enabled by technology.

 

Crossing the barriers

 

Barriers will always exist, but getting over these barriers is what matters. The manufacturing sector in India has always been plagued by barriers, but certain aspects can help the Indian manufacturing sector overcome these barriers. These aspects will not only help in reducing the impact of manufacturing practices on environment, but it will also make manufacturing sector sustainable.

 

Circular economy: Moving away from linear economy to circular economy is the need of the hour. Circular economy allows organisations to retain the value of material longer, and ensure it is kept in circulation as well as increase the longevity of any product. In a circular economy, the damage to the environment is reduced, due to increased durability, reuse, reparability, remanufacturing and recycling of products and materials. 

 

Life cycle assessment (LCA): Taking a holistic view of entire product lifecycle can help organisations to understand its points of impact across the value chain. This will give a clear picture in terms of what happens to the product at all phases of the product life cycle to enable companies to take steps towards a more sustainable process.  

 

Self-sustained industrial ecology: Policy decisions by governments, with respect to the manufacturing sector, need to understand the synergies between industries. Setting up industrial ecology centers, which work in sync with each other, can do this. The entire by-product and waste channelisation can be taken care by setting up industrial parks and zones, where one industry’s waste or output can be used by other industry as an input.  

 

Cluster-based approach towards sustainability: A cluster-based approach will enable industries and allied industries to come together to make the supplier as well as entire value chain sustainable. Larger manufacturing players have adopted this approach for making their suppliers sustainable, and bigger players can come together to join hands with their suppliers to make them understand and help them adopt sustainability, therefore making the entire value chain in manufacturing sustainable. 

 

Renewable energy: Manufacturing processes need power, and usage of power is one of the highest in terms of operations in this sector. The entire process must move to renewable energy, and this must be integrated across the value chain.  Consideration of cleaner power and energy in manufacturing is vital for the manufacturing sector to understand.

 

Engagement of this approach across the value chain is important, and this approach will not only enable India to see a transformation in its manufacturing sector. But ensure, the entire transformation process is done with an effort to reimagine sustainability as a 

core attitude. 

 

Dr Sunita Purushottam is the Head of Consulting at Treeni Sustainability Solutions. In her career spanning 15 years, Sunita has gained a wide spectrum of expertise and experience in sustainability and carbon strategy, and reporting (GRI certified professional). Her core area of expertise is in the area air quality and GHG emissions. Sunita possesses a strong meteorological background with understanding of climate change science and adaptation.