Manufacturing generates 30% of global anthropogenic CO2 emissions, with the top three emitting industries – iron & steel, non-metallic minerals (cement, glass, lime), and chemicals & plastics – accounting for 70% of these. There is a high correlation between energy consumption and production across the mentioned industries, and often electrification will not work on a large scale.
Our investment hypothesis is driven by:
- Without adopting “smart manufacturing” practices, hard-to-abate industrial sectors will not be able to reach their emission reduction targets. Therefore, digitization and sustainability are interlinked
- Companies integrating digital and sustainable transformations into their operations and value chains are 2.5x more likely to be among the best-performing businesses in the future than those that don’t
- Every aspect is part of the digital strategy e.g. optimising energy and resource use, improving supply chain management, and allowing for differentiation of products based on environmental attributes
- To ensure competitiveness, manufacturers must rethink their business model, their value proposition and their operational efficiency
- Besides more predictable revenue streams and increased customer loyalty, product-as-a-service business models excel through a more client-focused value perspective and improved product uptime, and thus, resource efficiencies
3 Green chemistry and synthetic biology
- Green chemistry and synthetic biology technologies are on their way to becoming a disruptive force for manufacturing and industry, and are expected to be used extensively by the end of the decade
- Start-ups in the area are focused on engineering new products and processes, and enhancing existing ones across a broad spectrum of industries
- Using this new method of manufacturing, products will require fewer resources, dispense with fossil fuels, while being more durable, healthier, cost-effective and scalable.