In the race towards net zero, the manufacturing sector has joined many other global industries that are furiously working towards becoming more sustainable. To navigate the path to decarbonisation and reduce their environmental footprint, manufacturing leaders will require more cutting-edge technologies, such as cleantech.
The Cambridge Dictionary defines clean technology or cleantech as a solution that prevents harm to the environment. Recycling and renewable energy are good examples of cleantech. Although cleantech is gaining momentum as a critical solution, as investments grow, stakeholders are demanding greater transparency to ensure accountability.
Cleantech funding soars, but there’s a catch
According to Statista, in 2023, global investments in low-carbon cleantech soared by 17 per cent and is predicted to almost double that of fossil fuels. An increase in awareness of climate change, energy security, and surging energy prices is driving this increase. Yet, the Financial Times reports this is less than half of the annual investment needed to achieve net zero goals.
The International Energy Agency (IEA) predicts that the “surge” in cleantech investment is expected to continue, but investors will want to know where their money is going and ensure a successful adoption of any new technology. In all of this, transparency remains key to securing future investments to significantly speed up the adoption of cleantech to meet climate targets.
The good news is that an increase in cleantech investments signals that investors are willing to commit to sustainability initiatives, which has led to a deluge of new cleantech projects and a rapid rise in production in various areas, from battery manufacturing to solar PV models.
This level of growth is noteworthy, considering that solar and wind technologies took over two decades to reach similar scales. However, sustaining this momentum hinges on transparency, as investors will demand transparency and accountability before committing to investing. Here’s how to unlock their support:
Build trust with stakeholders
Transparency ensures accountability and trust among stakeholders, including governments, businesses, and the ecosystem at large, all of which needs to come together for the world to meet net zero goals.
Without it, there is a risk of false claims and ineffective measures, which could undermine innovation and funding efforts in cleantech. Manufacturers must ensure that they are transparent with their progress when they adopt new technologies and ensure their sustainability roadmap has a comprehensive plan including integration, continuous learning and non-ambiguous accounting.
Enable data-driven decision-making
McKinsey and Co. asserts that businesses that don’t engage in data-driven decision making are “leaving value on the table and creating inefficiencies”. Data-driven decision-making uncovers new opportunities and guides CEOs on where to pivot their businesses when projects aren’t working. The data will also act as the proof for how well a new integration is going and is critical in the way forward when decarbonisation initiatives. By being transparent, manufacturers provide clear, verifiable data that allows stakeholders to assess the true impact of their environmental initiatives.
Deal effectively with regulatory pressures
Companies face a new wave of environmental, social, and governance (ESG) regulations, such as the European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD), requiring a new level of transparency and accountability across various sectors, leaving businesses under unprecedented levels of scrutiny. Governments worldwide are implementing stricter rules on environmental sustainability, data privacy, and corporate governance. Manufacturing businesses must be well-versed in past, present and future regulations, and understand the consequences of non-compliance. To reassure stakeholders, CEOs should promote compliance and ensure that their team stays updated with the latest information.
Challenges in addressing transparency
Despite the growing emphasis on transparency in cleantech, several significant challenges persist, particularly in accurately measuring and reporting environmental impact. The lack of standardised metrics and reporting frameworks continues to be a thorn in the side of manufacturers. Without universally accepted standards, comparing the performance and impact of different clean technologies becomes difficult. This inconsistency not only complicates investment decisions but also hampers the ability of stakeholders to assess the true effectiveness of sustainability efforts.
Accurately measuring carbon footprints is another barrier. The complexity of industrial processes, varying methodologies, and data collection issues make it hard to obtain precise measurements. Recent data highlights this issue, with only 10 per cent of companies measuring their emissions comprehensively. These challenges underscore the need for improved tools and methodologies to ensure that environmental claims are both credible and verifiable.
Transparency as a catalyst: driving net zero progress through cleantech
To reach net zero goals, manufacturers must quickly adopt cleantech and be transparent about progress or risk being left behind. Challenges like unclear metrics, measuring carbon footprints, and regulatory pressures show the need for reliable data and frameworks that are built to address these challenges felt keenly by manufacturers.
For organisations committed to transparency and advancing sustainability, the Consumer Sustainability Industry Readiness Index (COSIRI) is a comprehensive ESG framework that assesses the sustainability maturity of companies across all manufacturing industries. Endorsed by the World Economic Forum, this strategic platform can support CEOs in driving impactful change. Learn more about how COSIRI can support your journey towards sustainability and help achieve your net-zero targets.
