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Reimagining Sustainability:

A Comprehensive Guide to ESG Integration in Manufacturing

ESg

In a world grappling with climate change and societal demands, the manufacturing sector must align with Environmental, Social, and Governance (ESG) goals. By Genevieve Diesing

In an era marked by a growing concern for the environment, ethical practices, and transparent governance, the task of integrating Environmental, Social, and Governance (ESG) goals has become a primary focus for manufacturers. But this integration goes beyond mere compliance and regulation; it’s about weaving sustainability into the very fabric of an organization’s ethos and operations. It’s a process that demands a broader understanding of “green jobs,” a recognition of the vital role that quality departments play, and a committed leadership that is ready to face challenges such as the talent gap and varied reporting requirements.

Defining The Sustainability Workforce

To connect an organization’s goals to day-to-day operations, step one is to broaden everyone’s understanding of “green jobs,” says Rebekah Kowalski, vice president, Manpower Manufacturing.

“There is a sustainable version of every job or role on the way to or awaiting its transformation, including new opportunities and transitions to better versions of conventional roles,” Kowalski says. Kowalski cites sustainable product strategists to packaging or electric battery engineers to remote management technicians to community impact analysts as just some of the more than 775 “green” roles that Manpower has found will drive sustainability results across industries.

Kowalski divides these jobs into shades of green, or sustainability categories.

Green jobs are traditional roles focused on environmental concerns, “green-plus” positions are evolved and focus on a modernized workforce, while “turquoise” roles expand beyond science and environment to social, business, and economic roles.

Quality’s Role in Sustainability Goals

Quality professionals help to carry the sustainability torch, Kowalski says. Their roles are twofold, encompassing sustainability process coaches and stewards of data, responsible for continuous improvement proof and organizational effectiveness.

Kowalski highlights three methodologies as critical for sustainability:

  • Systems-thinking, which encourages an interconnected approach to complex problems.
  • Risk Assessment, which helps identify potential risks and mitigate them proactively.
  • Root Cause Analysis, which identifies the underlying causes of issues and ensures long-term resolutions.

“Quality professionals and executives have a pivotal role in accelerating sustainability goals within an organization within three primary areas: culture, capability, and function,” Kowalski says. “Within an organization’s culture, they are the circular business model connectors, the digital process and culture transformers, and the systems thinking and doing trainers. From a capability perspective, they are the voice and co-architects of what ‘good’ looks like, the ‘canary’ in the organization’s sustainability value chain, and the digital data champions and reporters. And from a function perspective, they are the actionable sustainability coaches behind the standards and slogans, the model-based mentors, and the internal/external innovators.”

Challenges in Integrating Quality Methodologies —The Talent Gap

Kowalski raises a concern that while nearly eight in 10 organizations have developed ESG strategies, 94% of organizations lack the talent to implement these goals. It’s not only about creating new jobs but modernizing existing roles.

“We are seeing an increase in demand for the talent, but the truth is when we press in, we find that a number of companies don’t understand just how pervasive the change will be—not just for new jobs, but [for] existing jobs and work,” Kowalski says.

Viewing ESG Beyond Compliance

Part of this may be because organizations have focused mainly on the compliance and reporting elements of their ESG objectives.  Those are absolutely essential, but are part of the much broader view of sustainability.

Many organizations are stuck in a narrow focus on compliance and reporting, possibly missing a broader view of sustainability. Kowalski urges leaders to go beyond compliance and adopt a value creation mindset focusing on growth, regeneration, and equity.

“It might be helpful to think of it like this: We have three major horizons that have been unfolding over the past few decades: automation, digitalization, and sustainability,” Kowalski explains. “All three of them are picking up speed and the first two horizons (automation and digitalization) actually make the third (sustainability) possible at a scale that will actually have impact. ESG is a way to help organizations make the dream of more sustainable futures a reality.”

But, if manufacturers remain narrowly focused on ESG vs. creating organizations and communities that are more sustainable and resilient, they risk missing the benefits of a more sustainable future,” Kowalski says. Instead of focusing on complying with standards, leaders should reimagine the nature of work, value, product, and process in a way that truly benefits all.

“From our perspective, this shift is about far more than regulation and reporting. To do well, you have to go beyond compliance and cost, with the ideal state being a value creation mindset – growth, regeneration and equity,” Kowalski says.

This means considering resource dependency, rethinking the built world and infrastructure, considering innovation through the lens of resiliency, a culture of transparency, and more, Kowalski explains.

As it relates to quality, the goal should not be to integrate quality methodologies into ESG initiatives, but rather to have quality departments bring their methodologies to the table when crafting the vision for a more sustainable organization — and then working through the goals, objectives, and measurable criteria that will be tracked through the ESG program and governance, Kowalski says. 

“Think of it this way: the primary quality methodologies all have a sustainability mindset to them. Instead of integrating them into what is already built, having quality leadership at the table to help you craft your ESG framework is essential,” she says.

Training and Education for ESG: Different Training Paths for Different Roles

Tailored training is vital in ensuring that individuals in different roles have the specific skills and understanding required to implement ESG strategies effectively.

Adam Hammes, ESG director, SGS North America-Knowledge, recommends that senior ESG committee members and other leaders setting ESG strategy for an organization pursue training focused on ESG trends, issues, and strategies within their specific industries. He also suggests they obtain stakeholder engagement and materiality assessment education, and recommends that leaders gain an understanding of the scoring methodology of relevant ESG rating agencies.

Managers of initiatives and topic specialists or other implementers executing ESG strategies should seek out training on topic-specific standards, targets, and tools, as well as high competencies in various risk and quality management strategies.

And for reporters communicating ESG management and performance for an organization, such as marketing departments, investor relations, and legal compliance teams, “I recommend trainings on greenwashing risks, reporting frameworks and standards, and various types of independent third-party assurance,” Hammes says.

The integration of ESG goals does not happen overnight. And the work may be deeper and more personalized than previously thought. The path to sustainability requires reimagining conventional roles, aligning quality methodologies with sustainability objectives, and focusing on growth, regeneration, and equity beyond mere compliance.

Opening Image Source: Man As Thep / iStock / Getty Images Plus via Getty Images.

Genevieve Diesing is a contributing editor to Quality.

October 2023  |  Volume 62  |  Number 10

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