Sustainable production: Reducing environmental impact in industry

The Kestria Industrial/Production Global Practice Group has convened six leading experts from around the world to explore how industrial leaders are reducing environmental impact, optimising resources, driving energy transitions, integrating sustainability into supply chains and embedding it at the core of business strategy to future-proof operations in a rapidly evolving landscape.

Key takeaways:

• Energy resilience drives innovation – Companies across sectors are investing in solar, waste heat recovery and modular renewables to ensure stable, sustainable operations.
• Circularity remains a challenge – While progress is being made in recycling materials like PET, true circular solutions are still limited by cost and infrastructure.
• Leadership embeds sustainability – Across regions, sustainability is becoming a strategic KPI, with leaders aligning supply chains, operations and teams to long-term environmental goals.

Optimising resources and reducing waste

Frank Michael Bouwers, ex-COO, Head of Operations at Corporación Moctezuma, Mexico, outlines what specific actions his company has taken to reduce material use or minimise waste in production: 'Cement is one of the top industrial CO₂ emitters, responsible for about 8% of global emissions, making it a key focus. Instead of reducing waste, the industry uses it in production. Quarrying impacts the environment, so we work with communities to reforest and restore biodiversity.

Most emissions come from burning limestone and clay in kilns powered by fossil fuels. To reduce this, we’re replacing them with alternative fuels like used tires and dry waste. We've built systems and partnered with suppliers to process this waste, aiming to replace fossil fuels by 20%, 30%, 40% and up to 50% - a core part of our sustainability strategy.

Another method is reducing clinker, the main CO₂ source in cement. We substitute it with pozzolanic materials and sugar cane ash. Romans used pozzolanic cement, some of their structures still stand today.

Globally, leaders in cement and steel use oxy-fuel combustion, slag, fly ash and carbon capture. Moctezuma, though smaller, follows these trends. Progress in Mexico is slower, but it's underway.'

We track waste daily, report scrap rates regularly and focus on ensuring that parts pass stringent quality processes (QSE). Our operations use copper, plastics and especially lead, which is energy-intensive but fully recyclable. Every lead-acid battery is returned, melted down and recycled. Lithium is harder to recycle and more hazardous and flammable. Lead remains a sustainable, cost-effective option for vehicles in Africa. We recover scrap lead and follow strict safety standards in recycling through a closed-loop system. We also recycle plastics into reusable packaging and reclaim oil to minimise spills and environmental impact.'

Dr. Javier Perez Freije, CFO at Gurit, Switzerland, explains what the company is doing and provides insights on their work with plastics: 'We use PET from recycled bottles and virgin PET to make foam for wind turbine blades. Wind turbine customers use this foam bonded with resin and composites. After the lifetime of the blades 20–25 years, recovering materials is hard. PET alone is recyclable, but mixed with resin, it isn’t. Some blades end up in landfills due to the costs related to separating the materials. A circular economy isn’t yet feasible but remains a key goal. Our PET foam is also used in office furniture, replacing wood cores at 60–80% lower weight. We’re partnering with a major U.S. manufacturer on circular solutions. Furniture’s long lifespan (10–20 years) makes foam recovery challenging, but we’re actively working on it. This use offers better circularity than wind turbine blades.

Circular economy works well for batteries with central collection, but office furniture is often discarded. Wood recycling exists, but PET solutions are still limited. Most PET in Europe and production markets comes from China, where virgin PET is currently cheaper than recycled, posing a big challenge to circularity.'

Frank Poels, Operations Director Wood & Managing Director at Unilin, Malaysia, describes their approach: 'In Belgium, we implement a highly effective strategy - we own our power plants and recover materials through the recycling process. When a house is demolished or an old wooden desk is returned, the material is brought to our factory. There, we separate the fibers. Those long enough are reused to produce panels for various applications, such as flooring. The remaining material is incinerated to generate energy, providing both heat and electricity to local communities.'

Ismail Dockrat, COO at Totai, South Africa, highlights that most of the country‘s power is generated by burning coal, resulting in high carbon emissions. 'Despite years of affordable electricity, South Africa has faced a persistent power crisis in recent years. Between 2022 and 2024, daily load shedding by Eskom, lasting two to eight hours, disrupted industry, operations and productivity.

Yet the crisis sparked one of the world’s fastest shifts to solar. In 2024, South Africa added nearly nine gigawatts of new capacity, over 5.7 gigawatts from rooftop solar, led by the private sector and enabled by government reforms. Falling global costs of lithium-ion batteries and PV panels supported the transition, positioning South Africa as a leader.

At Totai, we saw energy resilience as essential. During severe load shedding three years ago, we swiftly installed solar across warehousing, service and manufacturing. Since then, we've expanded capacity, added storage and raised company-wide awareness of usage. Solar offers clear ROI, immediate savings and long-term benefits. Even for conservative organisations, it’s a smart first step toward broader energy efficiency. I see it as the beginning of a lasting shift across industries.'

Energy efficiency and renewable transitions

Anesh Jogia illustrates how the transition to renewable energy in some of the automotive supplier businesses is managed: 'Energy resilience drives capital investments, with profitability and returns essential to allocating capital. Most projects are self-funded, but government support through policies, grants and incentives would help in further rollouts and keeping costs within an acceptable level. We follow a modular approach, aiming for 20–25% renewable energy use to ensure profitability over the project.

Smelters rely on gas and electricity for high-intensity needs, which solar can't fully replace. To try and manage this, we use Power Purchase Agreements (PPAs) to source power without upfront investment, improving returns.

A major wind and solar project (wheeling through the Eskom grid) in the Eastern Cape will be starting up and will allow greener sources of energy to local manufacturers and lowering capital costs as well as improving returns. South Africa’s aging electrical grid and infrastructure result in frequent outages, especially in areas where automotive manufacturing occurs, but we continue to invest where possible.

In Europe, plants benefit from government and EU grants/subsidies for solar projects, which can cover 30%- 40% of electricity needs. These examples show the importance of continued government support, tax incentives and collaboration to scale renewables.'

Since 2022 Moctezuma publishes every year around May its intergrated financial and sustainability report. The main pillars of the sustainability part are 

a) Health and Safety, 

b) Energy and Climate Change, 

c) Social Responsibility and Human Capital, 

d) Environment and Biodiversity, 

e) Circular Economy, focusing on waste avoidance.

During internal Sustainability Committee meetings, all relevant KPIs, their evolution, and next steps are reviewed. These include the clinker factor in cement, power consumption, fuel consumption, alternative fuel rate, volume of waste received from partners, and more. 

Moctezuma is a member of the GCCA (Global Cement and Concrete Association). Aligned with global ambitions to reduce CO2 emissions in the cement and concrete industry, the company targets a maximum of 500 kg CO2 per ton of cement by 2030 and net-zero emissions by 2050. Moctezuma is also testing and implementing AI and machine learning in order to minimise human errors in continuous operations and to reduce quality and process variations, thereby lowering energy consumption and ensuring consistent product quality.'

Frank Poels believes that as a company, they can make a difference: 'We integrate these initiatives into our corporate strategy as part of the value we offer retail consumers - products that are economical, sustainable and future-ready. We've set bold targets: a 42% cut in Scope 1 and 2 emissions by 2030, with 61% renewable energy already in place. Despite the significant investments, we manage them centrally, with a corporate team working closely with factories to stay on track across all levels.

Globally, our efforts include wind turbines, waste-to-energy plants integrated with local ecosystems and solar panels tailored to local viability. In Malaysia, we lease solar panels from TNB at a reduced rate. In Romania, we share land and CAPEX 50-50 with the government.

Local partnerships are key, as sustainability is now essential for our customers. Our early waste-to-energy investments are well integrated. Like in Malaysia, where a 25-year-old wood-fired boiler produces hydraulic oil and steam.'

Sustainability across the supply chain

Dr. Javier Perez Freije notes, following Frank’s comments on Scope 1 and Scope 2 CO2 emissions, that including Scope 3 makes involving suppliers essential. 'At Gurit, over 95% of our CO₂ emissions come from Scope 3, mainly raw material suppliers, while only 5% are in-house. Reducing our overall CO₂ emissions requires strong supplier collaboration; focusing on renewables alone won’t get us there.

As a small public listed company, we’re committed to reporting internal CO₂ targets. Much of our emissions relate to carbon fiber with a high impact. We're working closely with suppliers to secure CO₂-neutral materials and are nearing that goal.

A large part of our supply chain is in China, where low margins in the wind industry strain the entire value chain. This makes it harder to push for recycled PET, which is currently more expensive than virgin PET - a likely short-term issue.

We partner with suppliers to cut emissions and maintain customer demand, which is key to driving change. As a Swiss company, CO₂ reduction is a top priority, and we’re well placed to influence suppliers, including in Asia.'

Paljeet Sasan, Manufacturing Operations Excellence lead, wider Asia at Haleon, Malaysia, shares how collaboration with suppliers led to a major sustainability improvement. 'In my previous role, Reckitt’s largest plant in Johannesburg was experiencing frequent outages due to the South Africa power crisis and the site was running coal feed boilers. We invested combined heat and power (CHP) systems in 2021 and really benefited the site and solar panels and were targeting min 25% of generation of electricity through this green route.

In countries like Nigeria, where these models were not available...company was moving ahead in direct investments. Globally we were replacing it with compressed air or nitrogen-LPG mix in most of our Aerosol technologies. All packaging was 100% recyclable, supporting a global reduction initiative.

In Bahrain, we applied a roof coating to reduce the heat transfer (specially meant for high temperature areas) which helped us to reduce the energy consumption by nearly 5%.

We treat suppliers as partners, sharing best practices in energy, water, emissions and lean
operations through a very transparent communication system helping all of us to improve our operational excellence.'

Leadership in driving a sustainable future

Ismail Dockrat reviews what role leadership plays in advancing sustainability within his organisation. 'Sustainability has evolved greatly over the past 30 years. During my university days, the first Rio climate summit in 1992 marked the beginning of this global focus. Many executives now in their 50s built their careers as sustainability became mainstream.

By the late 1990s, science made clear that unchecked industrialisation would cause serious harm. Since then, businesses and policymakers have worked to create frameworks and a global consensus for change.

While progress is evident, much more is needed. Some argue that change hasn’t been fast enough, but leadership remains critical. Our role goes beyond operations—we must engage employees, shareholders, suppliers and customers to keep sustainability front and center.

In the past year, sustainability has become a core KPI for leading multinationals, backed by data and measurable goals. It now sits at the heart of business strategy.

Looking ahead, demands will only grow. Experienced leaders must mentor the next generation, embedding sustainability into leadership and identity.'

Paljeet Sasan outlines their rigorous approach to measuring and managing sustainability progress across the organisation. 'We have a robust quarterly review process with the global leadership team to monitor progress. Internally, we use a precise data capture system that is closely tracked with regular feedback. Designing this process was challenging, as it differed from conventional methods.

Over the past 20 years, water use equaled three centuries’ worth, metal production increased fivefold, oil increased eightfold and gas increased fourteenfold. We set 2015 as the baseline for all plant measurements, despite challenges from plant upgrades like essential air conditioning installations.

Using this baseline, we launched projects to reduce resource use despite expansions. This guided our measurement system’s design. We maintain strict monitoring and make regular, company-supported investments. Overall, we are making significant progress in this area.'

We communicate transparently with shareholders, stakeholders and customers. We've earned a Gold medal from EcoVadis, placing us in the top 5% for sustainability. However, we don’t conduct external audits unless legally required, as we see limited value in them.

Finally, linking sustainability goals to compensation has proven a strong motivator, backed by committed leadership.'

Summary

Sustainable production requires continuous innovation, collaboration and leadership commitment to balance economic growth with environmental responsibility. Future progress depends on advancing circularity, scaling renewable energy and embedding sustainability deeply within operations and supply chains. Success will come from bold targets, transparent measurement and leaders who inspire systemic change across industries.

The Kestria Industrial/Production Practice Group excels in sourcing leaders who navigate the complexities of modern industries. With expertise in sectors like manufacturing, energy and automotive, Kestria helps organisations find transformative leaders who drive operational excellence, foster innovation and guide companies through technological disruption. Committed to shaping the future of industrial production, the group delivers leadership for an evolving landscape.