Empowering Regulated Industries to Thrive in a Greener Future

by Bill Olson and Bryan Middleton / April 22, 2024

An increasing number of companies across industries are embracing sustainable product design, manufacturing, and supply chain management practices to reduce their carbon footprint and help combat climate change. Amid stricter greenhouse gas (GHG) emissions regulations from governing bodies like the European Union and the United States Federal government, some companies are working toward Net Zero GHG emissions directly and across their value chains (Scopes 1, 2, and 3). However, due to stringent certification processes, regulated industries face unique sustainability obstacles. In celebration of Earth Day 2024, this article underscores the critical role of original equipment manufacturers (OEMs) in implementing sustainability strategies to limit their products' environmental footprint. It also highlights the benefits of integrating sustainability practices and how regulated industries can meet sustainability goals.

Addressing Sustainability Challenges in Regulated Industries

Regulated industries (such as aerospace, defense, and medical technologies) face unique challenges in achieving sustainability goals. Given the stringent qualification and certification requirements they must meet, OEMs in these industries cannot easily revisit and upgrade their product designs unless they undergo costly and time-consuming re-certification. These challenges make seizing the opportunity to improve a product's environmental impact more critical when a design is revisited for other reasons (such as for parts obsolescence or required functionality upgrades).

Although concerns about scope creep and loss of focus are legitimate, sustainability imperatives cannot be ignored. Addressing these challenges proactively during a planned redesign will save aerospace, defense, and medical device companies significant headaches in the long run. Benchmark mitigates product design adaptation risks through a disciplined phased-gate product realization process while maximizing environmental benefits.

Collaboration is Key to Reducing Scopes 1, 2, and 3

For industries with complex and highly interconnected value chains, reducing Scopes 1, 2, and 3 emissions requires close collaboration between suppliers and customers. This is especially true for semiconductor capital equipment companies where the vast majority of a company's carbon footprint can consist of Scope 3 emissions (the upstream emissions from suppliers and downstream emissions from the use of their products by chipmakers).

Semiconductor leaders like Applied Materials (Applied), ASM, and ASML are taking steps to achieve Net Zero emissions by or before 2040. But these companies cannot do it alone. As Applied's CEO Gary Dickerson said during a keynote at SEMICON West 2023, “[t]he only way we can accomplish Net Zero is by working together.

The only way we can accomplish Net Zero is by working together."

This shift toward sustainability across industries is essential for continued growth and resilience. With stringent requirements set by regulatory bodies like the European Union Aviation Safety Agency (EASA) and European Chemicals Agency (ECHA)—including the EASA's Aviation Environmental Report 2020 and Waste Framework Directive—the imperative for incorporating sustainability in products has never been more urgent.

Benefits of Integrating Sustainability Practices

There is also increasing importance surrounding reporting climate-related risks and greenhouse gas (GHG) emissions, particularly for Scope 3 reporting. In fact, by 2027 (and even as early as 2025 and 2026 in some cases), companies will face growing pressure to disclose their indirect emissions associated with activities such as supply chain operations and product use. This includes measuring and managing direct emissions from owned or controlled sources (Scope 1), indirect emissions from purchased electricity, heat, or steam (Scope 2), and all other indirect emissions that occur in the value chain (Scope 3).

By integrating sustainability practices across all three scopes, companies can enhance transparency, minimize environmental impacts, and strengthen their competitive position in the marketplace. Collaboration also increases since reducing value chain emissions requires OEMs to partner with suppliers in their upstream and downstream value chains to reduce their overall GHG emissions and achieve compliance with existing and emerging environmental regulations. By partnering with Benchmark, customers can navigate complex regulatory frameworks, mitigate risks, and future-proof their operations against evolving ecological and regulatory reporting mandates.

How to Meet Sustainability Goals in Regulated Industries

Aerospace, defense, and medical technology OEMs often need help with high costs associated with product requalification, reluctance to introduce additional risks into development, supply chain complexities, and the need for minimal functional impact. These concerns can hinder efforts to implement sustainable design improvements. However, by partnering with Benchmark, companies can overcome these obstacles and embrace a greener future without compromising product performance.

Meeting sustainability goals efficiently requires evaluating every aspect of a company’s operations and screening for potential opportunities across product development, supply chain, and manufacturing operations. A detailed evaluation of the difficulty of implementation and possible impact helps to set priorities. Switching an already-qualified manufacturing site to lower-carbon energy solutions may be easier than transferring production and qualifying a new site. Switching to a regionalized supply chain that reduces the impact of transportation emissions may only sometimes be possible. Still, it may be easy to include when architecting the supply chain solution for a planned functionality upgrade.

Following a disciplined, phased-gate approach with a multi-disciplinary team is critical. Avoiding risk later in the regulatory approval process requires evaluating every angle of design decisions. For example, design engineers should work alongside supply chain experts to simultaneously realize additional carbon footprint and ethical sourcing benefits when moving from lead to lead-free components. Benchmark offers sustainability solutions integrated across your product's lifecycle to deliver measurable results balanced with product features, quality, and time-to-market goals. Our advanced engineering, manufacturing, and supply chain expertise make us the perfect partner to help you integrate sustainability into your current products and product roadmaps.

Achieve Greener Practices with Benchmark

Benchmark offers Product Sustainability Services designed to enhance your product's environmental impact. Through our Creative Workshops, we meticulously assess your product and its supply chain to ensure enhanced sustainability. We improve product design by integrating engineering, supply chain, and manufacturing solutions while significantly reducing environmental impact. Our approach is centered on supporting your bottom line with efficient, cost-effective strategies while maintaining your products' high performance.

Sustainability requirements are expected to become more stringent in the years to come. By combining our advanced engineering expertise with our commitment to environmental stewardship, Benchmark is driving positive change and helping our customers reshape our respective industries into a more sustainable future. Partner with Benchmark to identify and implement a pragmatic sustainability strategy for your products and manufacturing operations—because it matters.

For more information on Benchmark's commitment to sustainability, please visit our 2023 Sustainability Report.

Medical Defense Aerospace Semiconductor Capital Equipment Sustainability

about the author

Bill Olson and Bryan Middleton

As Director of Sustainability at Benchmark, Bill leads efforts to improve ESG and sustainability at a global level, working to expand the company's offerings and better serve our customers, employees, investors, operations, and communities. In his role as a Director of Global Accounts, Bryan contributes to significant revenue growth and customer retention. Together, Bill and Bryan exemplify Benchmark's commitment to innovation, sustainability and customer success.

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