Written by Bjørn Pedersen, Industry Practice Lead and Manufacturing Industry Expert at Columbus
The amount of regulation currently hitting European manufacturers can seem unfathomable, packed with acronyms and seemingly impossible demands. To mention just a few, DPP, CBAM, CSDDD, CSRD/ESRS … the list goes on!
One thing is certain: framed by the ‘Green Deal” and the promise of “leaving no one behind” where the target is to reach net zero on greenhouse gas emissions by 2050, the European Union’s commitment and aim for transparency is profoundly impacting the manufacturing sector. But is it all just an (expensive…) race for compliance to simply stay in business? Or can manufacturers leverage this and take business to a whole new level?
In search for an answer, I decided to take a tour of Columbus, starting with our own sustainability expert Dorthe Grønvold Tjørnemark, Director in Columbus Strategy & Growth.
“It is true we do see a lot of regulation being shaped or coming into force these years. Despite political uncertainty, one development is clear: the climate agenda is moving fast. Expectations for transparency on CO₂ emissions are shifting from company level to product level, and the tools to support this are maturing with increasing speed, making it achievable.”
Despite the urgency, practical challenges in implementation, especially around data collection, remains considerable. Climate reporting and the full CSRD/ESRS reporting package mandates many datapoints with high quality.
Dorthe adds:
“Navigating the political landscape around the implementation of CSRD/ESRS and climate reporting is becoming a major task in itself, with requirements and thresholds continually shifting. However, one area where manufacturers can move forward without wasting resources is the climate agenda. Working systematically with Scope 1, 2 and 3 emissions remain relevant under any regulatory scenario and is likely to increase in importance as product-level transparency, supplier data integration and value-chain reporting continue to trend.”
Data Capture: From Burden to Advantage
To dig a bit deeper into how this could work in practice, I turned to our Manufacturing Data & AI Lead Architect, Henrik Rasmussen.
“In most current implementations, data capture for sustainability reporting is a combination of semi-automated and automated processes. Choice of data capture method depends on factors such as the volume and complexity of the data, the level of accuracy required, and some manual interaction is often still needed to achieve compliance.
Typically, much effort also goes intocollecting GHG emission data for raw materials and components. This area is rapidly transforming: the use of AI agents to scrape data could significantly lower costs of data capture.”
With emission data available alongside costs, reporting can drive more than compliance. As an example, it can serve as the basis for employee incentives, such as procurement managers having bonus targets for reduced emissions.
Beyond Compliance: Opening New Opportunities
Could regulation even open new revenue streams and help manufacturers diversify their business models?
Consider the Digital Product Passport (DPP) also shaped as part of the ‘Green Deal’. The DPP requires manufacturers to provide customers and end-users with a structured, digital, and continuously updated set of product data. Initially, this will apply to industries such as batteries, textiles, electronics, and household appliances starting in 2027. However, by 2030, it is expected that virtually all industries, including subcontractors, will be covered.
Take a look at our article on how to prepare for the introduction of digital product passports.
Implicitly, the DPP will open a direct communication channel to end-users, even for traditional B2B-only manufacturers. I asked Lars Bruun, Senior Commerce & PIM Specialist at Columbus for his perspective.
“Instead of considering it a technically cumbersome administrative burden, consider the direct channel toward end consumers of your product opened by the DPP. With the appropriate platform for interacting with product data, opportunities for direct dialogue with end consumers on functionality and performance of your product open up. It is quite a unique upsell opportunity; an accelerator for diversification.”
Obstacle or Opportunity?
Talking to our experts across Columbus business lines gave me a sense of reassurance that competencies and tools are indeed available to address these challenges, much more so than just a few years ago. In particular, the importance of not descoping these elements in ongoing IT projects seems apparent, as accounting for your carbon footprint may become as crucial as accounting for your finances.
Remember: your competitors will face the same pressure, so eventually there is no navigating around the obstacle. It seems like there could indeed be a competitive edge for first movers in this space. But one thing is certain: manufacturers should face the challenge head-on with a ‘half-full mindset’ to unlock the value hidden in compliance.
