A Fresh Generational Drive For More Sustainability In Manufacturing

There is an almost revolutionary generational change occurring in Australia and around the world. Where once the Baby Boomer generation (roughly, people born between 1940 and 1964) comprised the single biggest cohort, this group is giving way to Millennials (born between 1981 and 1997) and Generation Z, known more commonly as Gen Z (born between 1995 and 2002). 

In 2019, Global consulting giant Deloitte conducted a survey of more than 13,000 millennials from over 40 countries. The survey covered a wide range of issues – including health, social mobility, the media landscape, economic optimism, and the attitudes of Millennials to business and the workplace. The report’s authors unearthed some important insights about their attitudes: “Facing continuous technological and societal disruption, Millennials are disillusioned with traditional institutions, sceptical of business’ motives and pessimistic about economic and social progress.”

The report also revealed a steady decline in support for the notion that business has a positive impact on society. In 2017, support for such a sentiment sat at 76% of respondents. By 2019, that support had dropped almost 21 points to 55%. Climate change and the environment topped Millennials and Gen Z’s list of personal concerns (as of writing, the 2021 survey results were yet to be released for comparison).

Significantly though, especially where manufacturers are concerned, consumer relationships are important to Millennials and Gen Z. The report found that 38% of respondents would reduce their relationship with a business that has products or services that negatively impact the environment or society at-large. Likewise, 29% would reduce their interaction with a business based on negative behaviour or comments of a single company leader. Twenty-eight percent of those surveyed say they would reduce their use of a business based on that organisation’s position on political matters. 

It’s a sentiment that Erika Hughes, Commercial Director of Integra Systems, is seeing play out in manufacturing. “The global consequences of everybody's actions are now being taken,” affirms Erika. “Whether it's energy, whether it's labour, whether it’s textiles, foods, footwear, it's that whole concept of ‘act local’. And, in manufacturing, the same applies.”

“If you go back 20 to 30 years ago, we had the advent of clothing chains that had really cheap clothing. As a consumer, it was an easy choice. We went out and bought it, but it turned out that we were supporting things like child labour and sweat shops without knowing it. Now, we're much more aware of these things. It's the awareness now that we all have about what's happening on a global scale. It's now about responsible sourcing and the elimination of abusive production environments that many low-cost purchasers unwittingly encouraged.”

“People turn their nose up at palm oil and they stop buying products with palm oil,” continues Erika. “Or, like what happened with lead in the ‘60s, ‘70s, and ‘80s – movements start up to eradicate toxins in certain products, or there’s a push for manufacturers to use more organic fabrics. There's a whole range of different things that buyers are changing all the time. It's a fickle market, so being able to have a manufacturing facility that can adapt to those changes is key.” 

“Australian-made now doesn't just represent buying local; it also represents buying responsibly and manufacturing responsibly." 

Sustainability is playing a greater role in how and where consumers decide to spend their money, regardless of their generational cohort. Embracing sustainability delivers tangible business benefits, writes Alexandra Cain in the Australian Financial Review: “The top three reasons businesses implement sustainable practices are to meet buyer expectations, achieve regulatory standards and improve their reputation. Greater efficiencies, competitive advantages and higher sales are other reasons why sustainability is becoming top of mind for local businesses.”

An increasing body of evidence continues to show us that consumers are willing to spend more money if a brand is environmentally sustainable. HSBC’s Navigator: Now Next and How – a report drawing on the insights of more than 9,000 companies globally – revealed that, while 81% of respondents believe they have a role to play in combatting climate change, yet still only 21% of survey participants consider taking a sustainable approach to business is essential to survive. 

For Integra Systems, putting sustainability front and centre of their business operations is non-negotiable, as evidenced by a number of company-wide initiatives including a commitment to the UN Sustainable Development Goals. And it’s a value that’s being reflected in the people they see coming through their front door. 

“People are becoming a lot more sustainable in their awareness and their contribution to a circular economy,” adds Erika. “The younger crew that are coming through, their buying patterns are starting to change. They are a lot more socially aware and conscious. So, with that, you’re seeing an industry-wide shift based on buyer preferences.” 

Another important shift is the growing movement in Australia to less offshore manufacturing and more onshore manufacturing. As Erika explains, “In terms of longevity and sustainability, Australians will benefit from it down the track, whereas there was no winner in offshoring other than the disposable society. And even that's going to shrink because people are becoming a lot more sustainable in their awareness and their contribution to a circular economy.” 

Erika believes such a shift doesn’t mean we become a high-cost society; it means we start complying with the general global trend towards responsible sourcing.

“If we can continue to have a strong manufacturing base that has strong governance, strong compliance, and if we can channel our labour towards higher value processing and production processes like digitisation and deploying the circular economy concepts, then everyone will benefit from the long-term gain."

“Movements are not a quick fix,” Erika concludes. “The movement is definitely towards act local, think global, and it will be a generational thing. I think that once we start to see the disposable mentality growing out of society, this movement will only get stronger.”