Sustainability is claiming its rightful place in the manufacturing industry – insights from Hannover Messe 2023

Hannover Messe 2023 has illustrated how ESG and, more precisely, sustainability are being integrated into industrial companies’ daily operations. Recent regulatory initiatives like the Supply Chain Act, the Corporate Sustainability Reporting Directive (CSRD), and the Inflation Reduction Act are forcing companies to look into their carbon emissions across all scopes. These regulations are part of the reason why manufacturers are investing more in their sustainability-related efforts. While calculating the emissions related to a producer’s direct operations is fairly straightforward, determining scope 3 emissions is especially challenging for discrete manufacturers, which require more intermediate products and whose total GHG generation is, therefore, greatly impacted by their supply chains.

Software & IT services (SITS) providers have addressed this issue by developing solutions to accurately track companies’ carbon footprint. More precisely, it is about accessing, gathering, analyzing, and visualizing data from business applications (e.g., ERP, MES, etc.) and external sources (e.g., weather data, external databases) to calculate the amount of GHG emitted by a business. At Hannover Messe 2023, companies such as Microsoft, SAP, and Siemens presented various use cases that illustrate the capabilities of their dedicated software tools (i.e., Microsoft Cloud for Sustainability, SAP Cloud for Sustainable Enterprises, and Siemens Sigreen).

Additionally, one of the most prominent use cases relating to decarbonization presented at the fair was handling the batteries of electric vehicles (EVs) at their end of life. From 2024, a battery passport containing crucial information (e.g., carbon footprint, performance, durability, chemical composition, etc.) will be mandatory in the European Union. As the demand for EV batteries is rising rapidly, the automotive sector is particularly affected by this regulation, which also aims to make batteries more sustainable and durable. Consequently, at this year’s Hannover Messe, IT companies like AWS, Bosch Rexroth, and Siemens displayed their approach to making vehicle batteries repairable and reusable. Most of these players actually rely on their already existing solutions and deploy them in a new way to determine which battery parts are still functional, what needs to be repaired, and which materials can be extracted for further use.

Another interesting evolution that became evident at Hannover Messe 2023 is the relation between Catena-X and Estainium. The former is a collaborative ecosystem that focuses on secure data sharing in the automotive sector along the entire value chain; the latter aims at sharing climate-related data across the entire supply chain in a trusted manner. Siemens, which is a member of both and announced the creation of Estainium at Hannover Messe 2022, is bringing the two consortia closer together. With the automotive sector being under close scrutiny due to its strong environmental impact, the German tech company is using the insights gained in both groups to advance the topic of environmental sustainability. The insights coming from Estainium help Siemens to further improve its product carbon footprint calculator Sigreen, among other things. At the same time, the application is used in the Catena-X network to connect the carbon-related data coming from the automotive supply chain and improve emissions management.

As was hinted at in the previous year, Hannover Messe 2023 has shown that companies are focusing on a data-driven approach to decarbonization and circularity. SITS companies rely on their current portfolios or offer specific sustainability-related solutions, or both. In either case, data analytics and data visualization tools are crucial to support manufacturers in obtaining reliable information and making informed decisions on their way to net zero. At the same time, sustainability is no longer considered as a stand-alone topic. On the contrary, SITS players and manufacturers understand that sustainability is not a topic that can be dealt with in a separate business unit. Since companies’ environmental impact is determined by all aspects of its operations, environmental sustainability is being integrated horizontally across all management levels, functions, and units. Change management and employee up-/reskilling certainly play an important role in making this a success.

Looking ahead, it will also be interesting to see what role generative AI and the industrial metaverse will play in the manufacturing industry’s journey toward net zero.