Pathways Toward a More Sustainable Future

Sustainability has become increasingly crucial for organizations to remain competitive in today’s business world, and it plays an is essential role in meeting evolving regulatory requirements.¹ According to the most recent Boston College Center for Corporate Citizenship State of Corporate Citizenship Report, at least 85% of executive respondents report that stakeholders are driving this change because of, increasing demands for more environmentally sustainable practices. Companies are now encouraged to be more environmentally sustainable through increased climate-related reporting, adopting emission reduction targets, and engaging or increasing Carbon Capture, Utilization, and storage (CCUS) technology. In a recent report, 61% of companies expect climate change to affect its business strategy and operations over the next three years, and most of those companies have already started using more sustainable materials and taken steps to increase energy efficiency.² Research also shows that investing in sustainability initiatives has the potential to have a more favorable return on investment in the long term.³ Embracing sustainable practices to elevate environmental, social, and governance (ESG) ratings can also elevate a company’s financial performance.⁴

Consumers have become increasingly interested in sustainability. Between 2016 and 2021, online searches for sustainable products rose by 71%.⁵ Eco-conscious consumers may be more likely to purchase environmentally friendly products based on an appeal to their identification with and knowledge of sustainability rather than product attributes.⁶

Here, we examine two companies, Flex and General Motors, that are at the forefront of sustainable practices. See how the companies are focusing efforts both regionally and internationally, and how circularity has become a part of their business models.

Company-Wide Collaboration: A Path to Sustainability

Flex is a diversified manufacturing partner that helps market-leading brands design, build, and deliver innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, Flex delivers end-to-end manufacturing services to diverse industries and end markets.

Sustainability has been a cornerstone of Flex’s business strategy for over 20 years. The company’s 2030 sustainability strategy and goals prioritize reducing environmental impact, investing in communities, advancing an inclusive and respectful work environment, partnering with customers and suppliers to help mitigate value chain emissions, and driving ethical practices with transparency. To date, Flex tracks about 150 environmental, social, and governance (ESG) metrics as part of its broader sustainability strategy to maintain progress towards its ambitious 2030 goals. According to Flex’s 2023 sustainability report, covering calendar year 2022, the company’s efforts have resulted in a 27% reduction in absolute Scope 1 and 2 greenhouse emissions compared to its 2019 baseline.⁷ In addition, 35% of Flex’s preferred suppliers had emissions reductions targets.

“Our company’s vision is to be the most trusted global technology, supply chain, and manufacturing solutions partner. Sustainability is an integral part of making this vision a reality, especially as stakeholder interest continues to grow and the world is calling on companies to do good while running their business,” said Barjouth Aguilar, head of global sustainability program and foundation officer at Flex.

 One key factor in its sustainability strategy is accountability. In 2015, the company went from publishing its sustainability report every two years to publishing one annually. Flex has also created a Global Sustainability Program that stewards the company’s sustainability strategy and execution. Across the organization, site-level sustainability matters are overseen by site sustainability teams that are responsible for and report monthly on the development of each of its sites. These teams are involved in goal-setting and developing initiatives and programs that support progress toward company-wide sustainability success.

Flex recognizes the importance of focusing on regional efforts in order to make a global impact through sustainability. The company operates on a region-by-region basis to determine how to implement changes, understanding that a one-size-fits-all approach does not account for where a country is in its climate change efforts and capabilities. Flex is committed to reducing operational emissions by 50% by 2030, and ultimately reaching net zero greenhouse gases by 2040. To reduce operational emissions, Flex is invested in increasing energy efficiency at factories by using less power while maintaining the same factory output and by upgrading facilities with more energy-efficient lighting, air conditioning, and equipment, and more. When it comes to overall operational emission reduction, Flex has taken a three-pronged strategy:

• Seek out opportunities to reduce the need for energy consumption,
• Leveraging system efficiency as a mitigation tactic
• Increasing the percentage of renewable energy resources in its energy portfolio

This is paired with the company’s net-zero plans, which involve investing in site and system efficiencies, deploying and procuring renewable energy, and collaborating with customers and suppliers. 

Another strategic priority is utilizing and purchasing renewable resources for power generation at its facilities. The company continues to work to increase its solar capacity, installing and expanding photovoltaic solar farms. In 2022, Flex had 98.51 megawatts of renewable energy, a 145 percent increase year over year.

Flex leverages Industry 4.0 (I4.0) technologies to drive manufacturing innovation and performance which can achieve sustainability benefits. These technologies drive fundamental transformation into manufacturing to enable more integrated, efficient, and sustainable operations. Flex’s I4.0 investment has helped reduce waste, increase energy efficiency, and reduce emissions.

Recognizing the manufacturing industry’s role in tackling the growing electronic waste (e-waste) challenges, Flex’s zero-waste certified Sorocaba, Brazil site developed a circular economy ecosystem by using I4.0 technologies. Since integrating the technology, the site now transforms e-waste and reintroduces repurposed materials into the product lifecycle by repairing, harvesting parts and materials, and recycling. This decade-long journey earned Sorocaba’s place in the World Economic Forum’s Global Lighthouse Network and recognition of Sustainability Lighthouse in January 2023, representing the first Sustainable Lighthouse in Latin America.

Flex’s factory in Althofen, Austria is also a World Economic Forum Global Lighthouse Network member. The backbone of Althofen’s environmental progress is a specialized IT infrastructure enabled by the Industrial Internet of Things. It provides real-time energy data monitoring and alerting of significant energy use, leakages, and more. The improved information flow helps the site quickly identify unnecessary energy losses and helped in the creation of a plan to manage peak times of energy use efficiently.

In addition, Flex’s sites in China employ digitization to help quantify, analyze, and mitigate the environmental impacts of operations through digital waste management and tracking of utilities consumption trends.

“Laying the foundations of our sustainability strategy and progressing our sustainability journey is made possible by the dedication of our integrated global workforce and our value chain partnerships. As an advanced end-to-end global manufacturer, we are committed to incorporating sustainability into our practices as we design, source, build, deliver, and manage our customers’ products,” said Aguilar.

General Motors: Driving Sustainability Ahead

General Motors Company (GM) is driven by innovation and a commitment to action, bringing together diverse perspectives and experiences to solve today’s complex transportation challenges. GM is committed to achieving circular transformation by increasing circularity in its facility operations and throughout the vehicle life cycle. To achieve these goals, the company aims to minimize waste through reduction, reuse, and recycling strategies within operations and in collaboration with external partners. When it comes to vehicle development, GM's circular transformation focuses on design and engineering, using more sustainable materials, and incorporating vehicle and part reuse and remanufacturing.

Because GM operates in a resource-intensive industry, the company feels it is vital to integrate circular design thinking into all of its operations. For example, the company looked inward and set a goal to divert more than 90% of operational waste from landfills, incinerators, and energy recovery facilities by 2025 against a 2018 baseline. In 2023, GM’s zero-waste performance was 94.6%, resulting in a diversion of 1.19 million metric tons of waste. It marked the second consecutive year that GM surpassed its original zero-waste target, and the company is building upon these results to set a new goal.

“At GM, we are taking important steps toward supporting the transition to a more sustainable, zero emissions future for everyone. We continue to make progress on our plan to become carbon neutral in our global products and operations,” said Kristen Siemen, GM’s chief sustainability officer.

GM also focuses on increasing circularity throughout a vehicle’s life cycle, from design to end-of-life. Its approach involves collaboration with GM’s supply chain and data-driven strategies for critical materials like plastics, steel, aluminum, textiles, and more. In 2023, over 39 million pounds of recycled plastic were used in GM vehicles. These recycled plastics came, in part, from 15.8 million wheelhouse liners, 1.4 million engine beauty covers, and 1.2 million center consoles from previously used GM vehicles. GM has also collaborated with its suppliers and developed textiles from numerous items, including recycled plastic bottles, recovered fishing nets, and plant-based fibers. One of these collaborations was with thermal management company Autoneum to use its Re-Liner technology in the rear wheelhouse liners of some of GM’s heavy-duty pickup trucks. The liners utilize recovered bumpers as a resource to create Autoneum’s core resin.  Additionally, GM’s Customer Care and Aftersales (CCA) remanufacturing program is a crucial part of its commitment to a circular economy. The program helps reduce raw material needs and waste to landfill by enabling the reuse of vehicle parts through remanufacturing. In 2023, CCA sold more than 700,000 units in the U.S., encompassing thousands of unique parts that meet engineering specifications, including engines, transmissions and other offerings. 

One of GM’s sustainability goals is to have 100% returnable, recyclable, reusable, or compostable operational packaging by 2030. To help, GM partnered with packaging company WestRock in 2020 as its preferred supplier for consumer-facing packaging. GM’s corrugated packaging now uses 35%-55% recycled material, and coated board packaging is made entirely from 100% recycled material.

GM is also committed to finding opportunities to reuse materials in its manufacturing operations. Two GM foundries that manufacture aluminum engine components teamed up in 2021 to reuse waste sand—specifically, the sand used to create the molds and cores that aluminum is poured inside. This project diverts sand waste from the GM foundry in Defiance, Ohio, to one in Saginaw, Michigan and replaces the need for virgin sand on a block production line. In 2023, this initiative reused more than 2,500 metric tons of sand, with cost savings of over $45,000.

GM's commitment to resource conservation also extends to its energy procurement. In 2022, GM announced that it would be able to secure 100% of the energy necessary to power all of its U.S. sites using renewable energy by the end of 2025. With these procurements, GM is.  the highest-ranking automaker on EPA’s Green Power Partner list. In addition, to help decrease overall reported global emissions, GM strives to make all-electric, zero-emissions vehicles more affordable and accessible by creating a more comprehensive portfolio of electric vehicles, working to integrate its plug-in hybrid technology to select North American vehicles, supporting the construction of a robust vehicle charging network, working to innovate vehicle battery technology, and more.  

“Sustainability is not just good policy. It’s good business—good for the company, for employees, and for recruiting and retaining the best people, people who will help us achieve our vision. And it’s essential to our ambition of leaving a better planet for future generations,” said GM Chair and Chief Executive Officer Mary T. Barra.