Professional Documents
Culture Documents
Sustainability in the
Industrial Sector
Agenda
• Sustainability
• Industrial Sustainability
• Barriers
• Drivers
• Performance
• Take-home messages and food for thought
Sustainability
• Why is sustainability important?
• When did the sustainability concept first emerge?
• How would you define sustainability?
Sustainability
Sustainability
The origin of Sustainable Development
“Sustainable development is the development that meets the need of the
present without compromising the ability of future generations to meet their
own needs” (United Nations 1987)
The Cosmic
Interdependence
Model The Russian Doll
Mebratu, 1998 O’ Riordan 2001
Institutional Pillar
(The Prism of Sustainability)
Spangenberg et al. 2002
Technical Pillar
Hill and Bowen 1997
Garetti and Taisch 2012
Cultural Pillar
Soini and Birkeland 2014
Sustainability
What’s in a name?
“The vagueness of the concept of sustainable development, coupled with its
increasing importance […] led to a large political battle for influence over our future
by linking interpretation to the concept” (Mebratu 1998)
Weak Sustainability
Focus on economic achievements with
social development at the expense of
environment.
Strong Sustainability
Focus on the sustained natural
environment; human impacts remain
manageable.
Industrial Sustainability
• Why should we implement sustainability in the industrial sector?
• What does it mean to implement sustainability in the industrial sector?
• How to enhance sustainability in the industrial sector?
Industrial Sustainability
And you might ask yourself “Well, how did we get here?”
Social
Bottom Line
Economic
Bottom Line
Environmental
Bottom Line
“Some of the most interesting challenges are found not within but between the
areas covered by the economic, social and environmental bottom lines” (Elkington
1997)
Industrial Sustainability
Is it progress if a cannibal uses a fork?
Wave 1 - Understand. Environmental impacts and natural resource demands
have to be limited: initial outpouring of environmental legislation. The business
response was likely to be defensive, focusing on compliance, at best.
Wave 2 – Realize. New kinds of production technologies and new products are
needed: development processes have to become sustainable. The business
response would began to be more competitive.
People
Planet Profit
Sustainability
Social Economic
Economic-Social
Occupational Health and Safety
Business Ethics
Fair Trade
Industrial Sustainability
Keys areas of Sustainability for Businesses - Economic
Corporate governance
Governance policy
Governance Structure
Compensation of Directors
Succession planning
Emergency planning
Business Risk (e.g. geographic)
Financial Robustness
Business longevity
Profitability trends
Cash flow trends
ROCE
Credit risk score trends
Innovation Capacity
Investment record
Policies and process
Business Integrity and Ethics
Internationally recognised codes of conduct
Legislative compliance record
Sustainability
Corporate Sustainability
Industrial Sustainability
Sustainable Manufacturing
“Industrial Sustainability accounts for all the actions that are referred to the
production plant, at the levels of material, product, process, plant and systems of
production as well as integration into normal operations.” (Trianni et al. 2017)
Industrial Sustainability
Current landscape – Relevance and Opportunities
• Relevance
o Sustainable Development Goals address industrial systems as fundamental for the
improvement of sustainability performance
o Industrial sector is recognised as one of the most important for both the number of
people employed and turnover generated
• Opportunities
o External and internal stakeholders pressure industry to address environmental and
social aspects of sustainability, besides canonically economic ones
o Sustainability is a major competitive factor
Industrial Sustainability
Current landscape – Problems and Challenges
Environment-related Aspects Social-related Aspects
• Enterprises (according to the European Union) • Accounting for the 82% of occupational injuries and 90%
< 250 persons of all fatal accidents
Turnover < € 50 M • 93.6% of EU SMEs are independent Growth and
• Key to economic growth, innovation, job creation and innovation played by owners
social integration (Eurostat, 2018b)
• 99.8% of European enterprises
• Consistent environmental impact
Industrial Sustainability
Current landscape – Problems and Challenges
Pillars consid.
Trianni et al. (2019) Firm
Eco Soc Env
Impact of sustainability on firm performance
A ● ● Any
B ● Positive effect on environment and employees’ wellbeing
Focus on the research C ● ● Any
Some aspects of D ● No direct impact on value creation
sustainability are still E ● ● ● Positive effect on employees’ wellbeing
F ● Any
missing still in the EU G ● ● ● Positive effect on overall firm performance
manufacturing sector and H ● ● ● Positive effect on economic and safety performance
SMEs, in particular, face I ● ● Any
J ● ● ● Positive effect on workers' wellbeing
difficulties in properly It leads to technical disadvantages and ethical advantages. Not sure of positive effects on final
K ● ●
evaluate sustainability customers
L ● ● ● Positive impact on employees’ wellbeing
impact.
M ● ● Any
N ● ● ● Sustainability as a philosophical concept. No economic advantages, but disadvantages
The Sample. O ● ● ● No advantages but the potentiality of advantage
P ● ● ● Positive effect on overall firm performance
26 industrial SMEs across Q ● ● ● Positive effect on overall firm performance
Germany and Italy R ● ● ● Advantages since world is moving towards sustainability. Positive effect on firm's image
operating in the chemical S ● ● ● Environmental issues and concerns as marketing instruments or related to economic reasons
T ● ● Positive effect on overall firm performance
and metalworking sectors. U ● ● ● Positive effect on overall firm performance
V ● ● ● Positive internal (employees' safety) and external (market) effect
W ● ● ● Positive effect on overall firm performance
X ● ● Any
Awareness of sustainability as possible advantages on overall firm performance, but not always
Y ● ●
considered in decision-making process
Z ● ● ● Economic internal benefits and community external benefits
Industrial Sustainability
Industrial Sustainability Interventions
The attainment of sustainable performances in all its dimensions in an industrial
context is pursued through the adoption of sustainability intervention.
Barriers
Industrial
sustainability Adoption Process Performance
intervention
Barriers
• What is a barrier?
• What are the main barriers to the adoption of industrial sustainability
interventions?
Barriers
Definition
A barrier to an industrial sustainability intervention can be defined as: “a postulated
mechanism that inhibits a decision or behaviour that appears to improve industrial
sustainability performance” . (Sorrell et al. 2004; Trianni et al. 2017)
The Sample.
26 industrial SMEs across
Germany and Italy
operating in the chemical
and metalworking sectors.
Barriers
The role of contextual factors
Neri et al. (2021)
The Sample.
26 industrial SMEs across
Germany and Italy
operating in the chemical
and metalworking sectors.
Barriers
General barriers vs barriers to a specific intervention
Cagno and Trianni
(2014)
The sample
Italian metalworking SMEs.
Barriers
General barriers vs barriers to a specific intervention
Trianni et al. (2017)
The sample
Italian manufacturing firms.
Barriers
The presence of multiple perspectives
Trianni et al. (2017)
During the empirical investigation in Firm 3, the two Industrial Decision-Makers interviewed (OHS Manager
and Energy and Environment Manager) disagreed very often on the identification of main barriers
• Different industrial decision-makers of the industrial sustainability areas may have different perspectives on
the same intervention.
• Different industrial decision-makers of the industrial sustainability areas may perceive different barriers to
the adoption of the same intervention.
Barriers Drivers
Industrial
sustainability Adoption Process Performance
intervention
Drivers
• What is a driver?
• What are the main drivers to the adoption of industrial sustainability
interventions?
Drivers
Definition
An industrial sustainability driver can be defined as a factor promoted by one or
more stakeholders, stimulating the adoption of an industrial sustainability
intervention, influencing a portion of the organization and a part of the decision-
making process so to tackle existing barriers (Neri et al. 2018).
The Sample.
26 industrial SMEs across
Germany and Italy
operating in the chemical
and metalworking sectors.
Drivers
The role of contextual factors
Neri et al. (2021)
The Sample.
26 industrial SMEs across
Germany and Italy
operating in the chemical
and metalworking sectors.
Drivers
The relationship between barriers and drivers
Trianni al. (2017)
Barriers Drivers
Performance
Indicators
Industrial
sustainability Adoption Process Performance
intervention
Performance
• Why measuring performance?
• How to measure performance?
Performance
Relevance of performance measurement
“Sustainability reporting is a voluntary activity with two general purposes: (1) to
assess the current state of an organisation’s economic, environmental and social
dimensions, and (2) to communicate a company’s efforts and sustainability
progress to their stakeholders” (Lozano and Huisingh 2011)
Performance
External stakeholders
• Firms receive strong pressures towards increased sustainability and transparency
about the results achieved by external stakeholders to whom firms communicate
their sustainability practices and performance
• Improving the relationship with external stakeholders companies aim to enhance
and protect their reputation
• External communication plays a relevant role in influencing the indicators
measured by a firm leading to a focus on external rather than internal reporting
Benchmarking
• Benchmarking activities are crucial, by conducting a closer and continuous
comparison with peers and competitors, identifying areas for improvement and
stimulating change
• Benchmarking traditionally entails comparison with peers operating in the same
sector, but the importance of other contextual factors is emerging, such as the
geographical area or firm size
Performance
The relevance of performance indicators
“In order to document and show the current status and improvement in
sustainability, sustainability indicators are crucial” (Engida et al. 2018)
The sample
26 industrial SMEs
across Germany and
Italy operating in the
chemical and
metalworking sectors.
Sustainability
measurement on actions” it” areas” worker”
experience and “Once certificated, a “We miss an analysis “I’m really focused on
sensitivity […] firm must concern by the operators, who […] the exchange of
The sample without a quantitative with every single are the ones at the information among
approach. However, detail [...] we cannot production site every them and between
5 industrial Italian firms. the quantification leave anything up to day […] we would like them and me”
helps in better change and to translate the idea
developing corrective everything must follow of the suggestion box
actions” a plan” in an integrated
system of data
collection”
“We focus on “We don’t have an “We focus on costs” “We have a very good “Just measuring we
economic aspects” index to measure, but “We are currently control on the realised how many
Performance Measurement:
“We had never had different indicators working for improving production […] for the scraps we were
the time to focus on according to the our efficiency. Our other performance, producing and how
the measurement of specific needs for technician suggested we have a person in much we are wasting”
Sustainability
performance other example of paints, us to install smart charge of the “I’m really focused on
What
than the ones related wood panels metering in each supervision of the the constant
to compliance with production or for the department and on health, safety and monitoring of the
legislation” production or each machine for the environment areas” relationships among
purchase of evaluation of the the workers”
complementary consumption”
materials”
Performance
Measurement of sustainability performance in industrial firms
A1 A2 A3 B1 B2 B3
Neri al. (2021) "Management of "Products, "Competitiveness “We mainly use “We try to focus "We monitor
production, process, in terms of price." three channels, on products with a different KPIs,
management of technology." two non-official, high level of used also to evaluate
Research question the the customers technology, to our supply chain:
How are sustainability relationship and the be competitive commercial
with the suppliers, and and be different insolvency; new
related performance
Benchmarking
supplier, one official, the from our product development
measured in the context times, price." result of the competitors.” lead time; product
of the SC? firm in the
market.” “A comparison is
quality; delivery
reliability, in terms of
made difficult by time, quantity and
The sample the fear of being documentation;
too exposed and complaints towards
6 manufacturing Italian allowed the others our suppliers and the
firms from 2 SCs. to have too many suppliers’ response
information about time.”
production.”
“We indirectly “The economic - “We have never “We don’t do “We are aligned
compare aspect is relevant, analyzed so far benchmarking on with the request
ourselves with but we also try to our sustainability sustainable from our
our peers by identify the compared to our aspects." customers, as
trying to adoption of peers. Through almost all the big
Benchmarking on sustainability
Industrial Sustainability
• Carter, C.R., Rogers, D.S., 2008. A framework of sustainable supply chain management: Moving toward new theory. Int. J. Phys.
Distrib. Logist. Manag. 38, 360–387. https://doi.org/10.1108/09600030810882816
• EIA, 2018. International Energy Outloook 2018.
• Elkington, J., 1997. Cannibals with forks : the triple bottom line of 21st century business. Capstone, Oxford.
References
• Elkington, J., 2004. Enter the Triple Bottom Line. In: Henriques. A. and Richardson, J., Eds., The Triple Bottom Line, Does It All Add
up? Assessing the Sustainability of Business and CSR, Earths can Publications Ltd., London, 1-16.
https://doi.org/10.1108/13598540910941948
• EPA, 2018. Overview of Greenhouse Gases [WWW Document]. URL https://www.epa.gov/ghgemissions/overview-greenhouse-
gases (accessed 4.17.19).
• EU-OHSA, 2017. Work-related accidents and injuries cost EU €476 billion a year according to new global estimates [WWW
Document]. URL https://osha.europa.eu/en/about-eu-osha/press-room/eu-osha-presents-new-figures-costs-poor-workplace-safety-
and-health-world (accessed 9.25.19).
• Eurostat, 2018a. Accidents at work statistics [WWW Document]. URL
http://ec.europa.eu/eurostat/statistics-explained/index.php/Accidents_at_work_statistics#Number_of_accidents (accessed
9.25.19).
• Eurostat, 2018b. Statistics on small and medium-sized enterprises [WWW Document]. URL https://ec.europa.eu/eurostat/statistics-
explained/index.php/Statistics_on_small_and_medium-sized_enterprises (accessed 9.13.18).
• Eurostat, 2018c. Greenhouse gas emission statistics - air emissions accounts [WWW Document]. URL
http://ec.europa.eu/eurostat/statistics-explained/index.php/Greenhouse_gas_emission_statistics_-_air_emissions_accounts
• Eurostat, 2017a. Consumption of Energy [WWW Document]. URL
http://ec.europa.eu/eurostat/statistics-explained/index.php/Consumption_of_energy
• Eurostat, 2017b. Material flow accounts - flows in raw material equivalents [WWW Document]. URL
http://ec.europa.eu/eurostat/statistics-explained/index.php/Material_flow_accounts_-_flows_in_raw_material_equivalents
• HSE, 2018. Costs to Britain of workplace fatalities and self-reported injuries and ill health, 2016/2017.
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WCMS_249278/lang--en/index.htm (accessed 8.19.18).
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• Trianni, A., Cagno, E., Neri, A., 2017. Modelling barriers to the adoption of industrial sustainability measures. J. Clean. Prod. 168,
1482–1504. https://doi.org/10.1016/j.jclepro.2017.07.244
• Trianni, A., Cagno, E., Neri, A., Howard, M., 2019. Measuring industrial sustainability performance: Empirical evidence from Italian
and German manufacturing small and medium enterprises. J. Clean. Prod. 229, 1355–1376.
https://doi.org/https://doi.org/10.1016/j.jclepro.2019.05.076
References
Barriers
• Cagno, E., Trianni, A., 2014. Evaluating the barriers to specific industrial energy efficiency measures: an exploratory study in small
and medium-sized enterprises. J. Clean. Prod. 82, 70–83. https://doi.org/10.1016/j.jclepro.2014.06.057
• Sorrell, S., O’Malley, E., Schleich, J., Scott, S., 2004. The Economics of Energy Efficiency, Policy Research Series. ISBN 0 7070 0215
X
• Neri, A., Cagno, E., Trianni, A., 2021. Barriers and Drivers for the adoption of Industrial Sustainability measures in European SMEs:
Empirical Evidence from Chemical and Metalworking sectors. Sust. Prod. and Cons., 28, 1433-1464.
https://doi.org/10.1016/j.spc.2021.08.018
• Trianni, A., Cagno, E., Neri, A., 2017. Modelling barriers to the adoption of industrial sustainability measures. J. Clean. Prod. 168,
1482–1504. https://doi.org/10.1016/j.jclepro.2017.07.244
Drivers
• Neri, A., Cagno, E., Di Sebastiano, G., Trianni, A., 2018. Industrial sustainability: modelling drivers and mechanisms with barriers. J.
Clean. Prod. 194, 452–472. https://doi.org/https://doi.org/10.1016/j.jclepro.2018.05.140
• Neri, A., Cagno, E., Trianni, A., 2021. Barriers and Drivers for the adoption of Industrial Sustainability measures in European SMEs:
Empirical Evidence from Chemical and Metalworking sectors. Sust. Prod. and Cons., 28, 1433-1464.
https://doi.org/10.1016/j.spc.2021.08.018
• Trianni, A., Cagno, E., Marchesani, F., Spallina, G., 2017. Classification of drivers for industrial energy efficiency and their effect on
the barriers affecting the investment decision-making process. Energy Effic. 10, 199–215.
https://doi.org/10.1007/s12053-016-9455-6
References
Performance
• Cagno, E., Neri, A., Howard, M., Brenna, G., Trianni, A., 2019. Industrial sustainability performance measurement systems: A novel
framework. J. Clean. Prod. 230, 1354–1375. https://doi.org/10.1016/j.jclepro.2019.05.021
• Engida, T.G., Rao, X., Berentsen, P.B.M., Oude Lansink, A.G.J.M., 2018. Measuring corporate sustainability performance– the case of
European food and beverage companies. J. Clean. Prod. 195, 734–743. https://doi.org/10.1016/j.jclepro.2018.05.095
• Gray, R., 2010. Is accounting for sustainability actually accounting for sustainability...and how would we know? An exploration of
narratives of organisations and the planet. Accounting, Organ. Soc. 35, 47–62. https://doi.org/10.1016/j.aos.2009.04.006
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• Lozano, R., Huisingh, D., 2011. Inter-linking issues and dimensions in sustainability reporting. J. Clean. Prod. 19, 99–107.
https://doi.org/10.1016/j.jclepro.2010.01.004
• Neri, A., Cagno, E., Trianni, A., 2021. Barriers and Drivers for the adoption of Industrial Sustainability measures in European SMEs:
Empirical Evidence from Chemical and Metalworking sectors. Sust. Prod. and Cons., 28, 1433-1464.
https://doi.org/10.1016/j.spc.2021.08.018
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Eng. Manag. 2, 42–50. https://doi.org/10.5755/j01.erem.48.2.13
• Trianni, A., Cagno, E., Neri, A., Howard, M., 2019. Measuring industrial sustainability performance: Empirical evidence from Italian
and German manufacturing small and medium enterprises. J. Clean. Prod. 229, 1355–1376.
https://doi.org/https://doi.org/10.1016/j.jclepro.2019.05.076