Lauren Knudsen is the main responsible for the transformation of Broadcom SoftwarePower50 Member, Top 100 Women in Tech.
The topic of sustainability is expanding to include more than green energy and the amount of energy you use. Now you need to look at your entire supply chain and determine how each component in your product is made. I expect that many countries will enact sustainability regulations in the next three to five years. Corporate leaders must plan for these regulations now so that they can meet the requirements in the coming years.
Businesses also need to be aware and have plans for a circular economy, right to reform, corporate social responsibility, and fair trade. This article provides an overview of these topics and how to make sure you’re prepared for what’s to come.
Let’s start with the topic that most people focus on. This relates to the energy your company uses to do business. With oil supplies disrupted, many companies are quickly tracking their change to using solar or wind power. Companies around the world are adding solar panels to office buildings or nearby fields. Most companies advocate reducing carbon emissions when undertaking such projects, but it also helps achieve the bottom line with lower energy costs. This is good news for our world, and I think we will go even further when we can store additional energy in hydrogen fuel cells. Technology in this area is expanding.
A circular economy is when we associate the end of a product’s use with the beginning of another consumer’s use of the same product. The goal of this movement is to stop mining and harvest materials and instead reuse materials from existing products. If regulations requiring a circular economy are passed, it will affect every company that manufactures physical goods.
In addition, China has Stop taking recycling from other countries, causing a buildup of plastics and metals around the world. We have limited space to keep these recyclables, so the pressure to reuse will only increase. I think there will be laws in the next few years that require companies to reuse a percentage of every product they make.
right to repair
In recent years, some manufacturers have made it difficult for their products to be repaired by anyone who does not work for the manufacturer. This causes more products to be discarded rather than repaired. Parts of the world are already looking to enact “right to repair” bills, which will make it difficult for manufacturers to order special tools, batteries or components not readily available to small repair shops. Besides the right to repair, the EU is looking to standardize power cords and other components to reduce waste further.
Corporate Social Responsibility
Along with regulations, what consumers and employees value is changing. Consumers research the environmental impact, fair trade supply chains, and corporate inclusive policies. Companies are aware of this and are adding information to their websites about how they can focus on becoming more sustainable and conscious. Value isn’t just about making money. Businesses today need to focus goals and outcomes on how they engage with people and the planet, as well as revenue. They also need to track the work they do on these problems so they can demonstrate the impact they are having on our world.
How we get the materials for our products is important. It doesn’t matter if we’re making chocolate bars, computers or software. Companies are expected to know that everyone involved in the supply chain is treated fairly. Consumers are becoming aware of how products are made, and apps are being created to keep track of which products are considered “fair” and which ones are not. Some companies now oversee their supply chain and create their own labels that ensure their products are fair. Time will tell if this is a successful practice.
It is clear that every company needs to focus on sustainability. How we track this work will become very important in the coming years. We will need to be able to demonstrate that we care about people and the planet as much as we do about revenue. In addition to consumer pressure, government regulations are expected to increase, which means we will need to pass audits about how well we have adapted our operations to be more sustainable. Value Stream Management is the solution, but this is only the beginning.