3 reasons why industry must go green

20 January 2022, Micha van den Boogerd

The world needs to go green, and of course, this also includes industry. However, this will be a major challenge for a sector that has been accustomed to using fossil fuels for many decades and is responsible for nearly one-third of the world's emissions of CO2. Sitting back and doing nothing is out of the question, and even without the intense societal pressure to take action it would still not be a viable option. At TAUW, we are working hard to go green and we believe that industrial firms need to pay more attention to this issue than ever before. Why? Read on for our explanation of three key reasons.

About this blog series

The industrial sector is facing the substantial challenge of going green. For example, industry must be climate neutral by 2050, although the demand for industrial basic products will remain. Furthermore, by 2030, emissions of greenhouse gases must have been cut by at least 55% (compared to levels in 1990). How can industrial firms implement circularity and sustainability and how can you ensure that your business premises are made climate-proof and future-proof? In this series of blogs, our experts will examine a whole range of issues such as these. This first blog addresses the urgency to start going green now.  

Reason 1: From 'licence to operate' to 'licence to exist'

We have observed that the authorities are no longer the only parties who evaluate industrial manufacturing processes. The continued existence of our industrial clients is dependent on far more than just environmental and safety agreements with regulatory bodies, and social actors have more influence now than ever before. In short, this means that the industrial sector must do more than simply colour within the lines in order to satisfy the man on the street. Companies must be able to explain to society (as well as their shareholders) exactly what they do and show that they are doing their best to reduce their impact on the environment. Ultimately, it is society that determines what is acceptable, as was highlighted by recent examples involving 3M, Shell and Tata Steel. This is a long-term process, and in the future, you will see the authorities adopting an alternative and stricter approach, particularly for traditional industries such as oil, gas and metal.

Reason 2: Expanding and tightening of rules - Green Deal

In addition to pressure from society to go green, substantial pressure is being applied by enforcement measures. More and more rules are being implemented, and they are getting increasingly strict. These rules, which apply to both old and new industries, are part of the European Green Deal: an EU-wide initiative to promote change that is both metaphorically and literally sustainable. The goal of the Green Deal is to transform the European Union into a modern, resource-efficient and competitive economy. We have linked arms across national borders to meet these international obligations together and ultimately, all companies will have to comply with these European sustainability standards and targets. Although the specific restrictions and permitted usage levels concerning resources, auxiliary materials, waste and emissions are not yet clear and it is not yet certain how these standards will translate into requirements for products, companies and licences, the rough outline and the general direction are clear enough for businesses to anticipate.

Reason 3: Inaction will put you out of business

It may sound extreme, but it's simply the reality of the situation. Companies that fail to change will ultimately go bust as a result of the tougher government measures, increasing social pressure and stricter rules. Industries will have to pay greater attention to this issue than ever before and to guarantee future success, you will have to go over and above simple 'compliance'. You will have to accelerate the process of electrification or the implementation of hydrogen to meet your energy needs, and in order to reduce emissions, you will have to establish minimisation obligations that exceed the minimum levels stipulated by law. In the next few years, environmental and monitoring data will be extensively linked in order to enable one-to-one comparison of performance at the European level. Of course, this will be done gradually and the biggest companies will be first to act. Diverting operations to ports in Antwerp or Romania in order to take advantage of fewer regulations will no longer be an option. The industrial sector must actively map out all possible risks involved throughout the entire life cycle of their production process and take action to reduce them to the greatest extent possible. If they fail to do so, then they will be hit with more restrictions than ever before, they will no longer be permitted to take out loans, they will miss out on innovation grants and ultimately they will no longer be able to keep their heads above water (and given the rising sea levels, this could literally be the case if the industrial sector does nothing).

Working together for a future-proof industry

In short, the industrial sector has its work cut out. We're not saying it will be easy and the challenges are clear for all to see. How can I change my production locations? Which alternative resources and energy sources can I use? How can I decontaminate polluted sites? How much will it cost? These are all tough questions that the industrial sector will have to answer in the years to come and we will address all of these issues in greater detail in the subsequent blogs in this series.

Would you like to discuss these issues with us now? If so, feel free to contact us. We would love to work with you to achieve modern, resource-efficient and competitive industry!

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