With western markets demanding ever cheaper and more disposable electronic products, the electronics sector was once the polluting engine of international industry. But all that has changed.
Electronics manufacturers have been major polluters
In the digital, industrial age the drive for cheap electronic consumer goods led to increased carbon emissions and exploitative supply chains.
Electronic component manufacturers and EMS providers with factories located in developing economies were some of the worst offenders. Far away from the products’ end markets, the pressure to support the ‘fast electronics industry’ led to pollution, exploitation and ecological destruction.
Climate change and resource scarcity have driven global disruption
As industrialisation boomed in the 20th century, so did global warming, the unsustainable extraction of rare minerals, and all the other polluting effects of electronics production.
Resource scarcity and extreme weather events caused by climate change have driven supply chain disruption, energy price hikes and conflict around the world.
And research shows these damaging effects are projected to continue unless drastic measures are adopted to curb emissions and promote greener thinking:
Source: UNEP
As the United Nations Environment Programme (UNEP), Global Resources Outlook in 2019 concluded:
“In a world of finite resources, the current patterns of production, consumption and disposal of materials are patently unsustainable”.
Luckily - the world has taken notice
In the last 20 years, things have changed for the better. Governments, corporations and consumers have all realised that emissions must be curbed and environments protected for the good of future generations.
Legislation demands transition to industrial sustainability
Pacts such as the Paris agreement and the US and EU’s clampdown on emissions and supply chain transparency signalled a shared direction of travel.
Around the world we saw some of the most wide-ranging legislation introduced to control the damage inflicted on the environment by industries (including the electronics sector).
The EU Corporate Sustainability Due Diligence Directive (CSDDD) and Germany’s Supply Chain Act (LkSG) required businesses to rigorously assess and mitigate environmental, social, and governance (ESG) impacts throughout their value chains.
And promised sanctions would follow if they didn’t.
OEMs and EMS innovate for sustainability
In response, industry giants like Apple and Microsoft, as well as EMS companies such as ESCATEC - have improved supply chain accountability with dramatic effects.
Electronics manufacturers lead the way
The innovation and commitment of many OEMs and EMS companies to ESG programmes has been remarkable.
They have invested in renewable energy, ethical supply chains, materials recycling, as well as extensive R&D programmes to create more sustainable choices (and better value) for their clients and consumers
And the world has begun to see results.
Embrace of renewables
Working with EMS companies such as Foxconn, Apple have delivered carbon neutrality programmes at scale across their manufacturing supply chain.
- Over 200 Apple supplier facilities now run on clean energy, avoiding 13.9 million metric tons of carbon in 2021.
- Apple cut 2 million metric tons of emissions last year by using recycled aluminum in many devices.
- Apple aims for full supply-chain carbon neutrality by 2030.
Strides in manufacturing efficiency
Studies undertaken by the Technical Research Centre of Finland have shown that improvements in material and energy efficiency in manufacturing processes could reduce global electronics emissions by 20%.
And these changes are really happening in innovative electronics businesses right now:
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Additive printing methods for creating flexible electronic components have been shown to reduce environmental impact by up to 86% compared to traditional subtractive processes.
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Changing from metal PCB etching to printing electronics onto bio-based substrates such paper or bio-plastic film is significantly reducing material waste and energy use.
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Sony has developed SORPLAS™, a recycled plastic made from 99% reclaimed materials, reducing CO₂ emissions by 80% during production of their consumer devices.
Increased supply chain transparency
Supply chain management tech is helping with transparency and greater control around sustainable procurement choices. For example:
- Sluicebox, an AI-powered platform, calculates the carbon footprint of electronic components in the supply chain. Their API provides carbon data for over 75% of globally available electronic components.
- Luminovo partnered with Sluicebox to offer instant carbon footprint estimates for their electronic components, PCBs, and assemblies within their supply chain software. This integration enables companies to prioritise eco-friendly parts and meet emerging regulatory requirements.
- Omnics' supply chain and GHG emission modeling tool is enabling OEMs and EMS to analyse and understand the carbon footprint trade-off between various sourcing-, manufacturing- and logistics scenarios.
The benefits of reshoring and local supply chains
More reshoring and the use of local supply chains is helping companies prioritise sustainability and accountability:
- Jabil's 2020 expansion in Ireland, dedicated to advanced medical devices, becomes a noteworthy EMS reshoring initiative. This enhancement better addresses local and European demand while decreasing carbon footprint and supply chain complexity.
- Research shows that local manufacturing can reduce overall transportation emissions by 12-25%. Industries such as electronics, appliances, and automotive parts are increasingly thinking global but building local to take advantage of more sustainable logistic strategies.
Value engineering and design for sustainability
Value engineering around materiality and Design for Sustainability (DfS) is improving longevity in electrical goods - this is increasing customer satisfaction and loyalty while preventing waste.
- The Merckgroup has developed colloidal silica-based lubrication systems for linear motion components in manufacturing machinery, resulting in:
- 60% reduction in maintenance-induced downtime
- 35% lower lubricant consumption through optimised application systems
- KUKA's Matrix Production System showcases the benefits of modular manufacturing. Flexible automation cells with standardised interfaces allow easy reconfiguration, upgrades, and scalability, extending equipment lifespan and adapting to changing production needs efficiently
Embracing the Product-as-a-Service (PaaS) model
Subscription-based Product-as-a-Service (PaaS) models are transforming the way products are purchased, used, and maintained.
- From factory robotics and agritech, to laptops and consumer electronics, leasing-based models shift responsibility for maintenance, repairs, and upgrades to manufacturers, extending product lifespans and reducing waste.
- Industry leaders such as GE Aerospace, Rolls-Royce Jet Engines, HP Enterprise, Kaeser Kompressors, Carrier, Dell, and Sandvik are pioneering PaaS as a sustainable alternative to traditional ownership - moving away from the outdated “buy and bin” cycle.
- OEMs are now working with EMS on many PaaS projects, helping think about new sales and service models based on extending lifespan, repairing and recycling rather than ‘building in obsolescence’ to encourage new purchases.
All these efforts not only benefit the environment but also deliver significant commercial advantages, proving that a sustainable and profitable future is well within reach.
This report from PWC shows just how much money manufacturers can save when key elements of the circular economy are embraced. In fact, they conclude that sustainability efforts are protecting and boosting revenue around the world:
“The manufacturers out in front are not only using circularity to boost decarbonisation, but also to drive out costs, innovation and meet ever more exacting consumer expectations.”
Nick Atkin - Industrial Manufacturing and Services Leader, PwC UK
“Drill, baby drill!” - will Trump have a chilling effect on ESG?
However, even as governments and corporations were moving to more sustainable business models, Donald Trump swept to power for a second term - with a platform based on climate change denial and a promise to roll back eco-regulation.
In his first week he exited the Paris Agreement (again), prioritised fossil fuel production over renewables, removed all mention of climate change from federal websites and slapped tariffs on imports that will further impede the tech development vital to more green innovation.
America first? Tariffs as a tool to reshore manufacturing
This is a highly volatile subject, with changes taking place weekly. Many of the originally threatened tariffs have now been paused; however, at the time of writing, we have seen:
- 125% tariffs on all Chinese goods
- 10% for the rest of the world
While these measures could be renegotiated, their immediate impact is to pressure global manufacturers to reassess their supply chains and potentially relocate production to the U.S.
But will reshoring help the US become more sustainable?
In the short term, near-shoring or reshoring could serve the “America First” agenda and even help reduce carbon footprints, but only if factories in the U.S. rely on renewable energy and localised supply chains. However, if these re-shored operations remain tied to fossil fuels, any environmental gains could be lost.
Will a US retreat from global ties stifle innovation?
The regulatory pivot away from favouring renewables in the U.S. could undermine regional innovation in clean energy, recycling, and electrified transportation. This may put American companies on the back foot when it comes to meeting new global demand and competing with foreign companies innovating with cheaper, more sustainable resources.
However, this shift in direction by the US could cause many global companies to backtrack on their ESG work as they dance to a new American tune.
Will the world change its mind on sustainability?
The “America First” agenda of a new Trump administration poses significant challenges to a global order that was previously co-operating to deliver a more sustainable future for manufacturing.
The US no longer seems likely to lead or consent to global efforts to lower emissions.
But if that's the case Trump’s climate denial will continue to give China a leading role in the future of global industry
Given the overwhelming evidence for urgent climate action and their own internal struggles for greener productivity, China is likely to further its leadership in the global shift to renewables.
Meanwhile, America could become less important on the global stage, as climate action becomes ever more critical.
Denial will not hold back a rising tide
And regardless of what Trump wants, the market may continue to push American companies to maintain their ESG commitments.
After all, consumer and employee demand for cleaner, more responsible industry is clear:
Most signs indicate that the strategic drive to reduce carbon emissions, clean up supply chains, and look for more sustainable solutions will endure. Not just because it’s the ethical route but because it makes the most commercial sense.
Ignoring climate change does not insulate anyone from rising temperatures, extreme weather, or other escalating hazards. Ulltimately, environmental realities will continue to shape markets, policies, and manufacturing worldwide.
Conclusion
In this context, EMS providers around the world will continue to look for the most sustainable, cost effective manufacturing, procurement and logistics solutions.
In the end it makes commercial and ethical sense to innovate with renewables and recyclables - to save money, eradicate waste and bring extra value to our customers. It makes sense to try and save facilities and infrastructure from future climate change by halting the destruction of the ozone layer. It makes sense to ensure our populations are healthier and have more access to fresh air and clean water, so they will continue to buy our goods!
OEMs should continue to look for the most sustainable partnerships with agile and innovative EMS who can help you find new markets in a changing, international landscape.
