Siemens Digital Industries Software

Creating a
sustainable future
Leveraging technology to reduce the environmental
impact of the consumer products industry
White paper | Creating a sustainable future

Executive summary

Sustainability is at the forefront of everyone’s mind. to develop new sustainable innovations. By

Companies, regulators and consumers are leading the way examining the four areas sustainability: the circular
toward a sustainable future by examining the ways they economy, decarbonization, traceability, and global
can reduce their environmental impact. Within the food insecurity, we can see how technology can be
consumer products industry, there are many opportunities leveraged for sustainable development.

Abstract
Every minute, the equivalent of one garbage truck full of These defeating statistics present a call to action for
plastic leaks into streams, rivers and oceans.1 An estimated consumer products industry corporations to reduce
100 million marine animals die each year due to plastics. their environmental impact. Consumer products
Soon there will be greater amounts of plastic than fish in the companies are now facing external and internal
ocean.1 In 30 years, current agricultural practices will not be pressure to actively reduce their environmental
able to sustainably feed the growing population.2 impact through innovation and investment. Through
partnering with technology solutions, consumer
products companies can accelerate their progress to
achieve full environmental sustainability.

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White paper | Creating a sustainable future

Creating a circular economy

Consumers care about their impact on the planet. They are It is also critical to address the large amount of wasted
becoming increasingly conscious about the difference they an plastic to keep materials in use. Many top CPG companies
make through their wallets. Consumers support companies have committed to making all their products re-usable,
with purposes of embracing social causes, providing recyclable or compostable by 2030. Although recyclable
transparency and aligning with their personal values.3 This packaging is a step forward, only 8.7 percent of
highlights how consumers are driving the shift toward recyclable plastic is recycled, still creating large amounts
sustainability. Consumers also want an end to the current of waste.8 To combat this issue, companies are
unsustainable, linear model of make, take and dispose. This innovating to find more solutions. Some companies are
has given way for brands to reexamine current practices and looking at creating invisible barcodes to make it easier for
incorporate circular economy solutions. The circular economy recycling facilities to sort plastics and increase the
is a concept with three principles: design-out waste and recycling rate. Biodegradable packaging is also becoming
pollution, keep products and materials in use and regenerate increasingly popular. Options such as mycelium from
natural systems.6 The circular economy is a concept mushrooms and seaweed-based alternatives are taking
companies can adapt if they wish to create a sustainable, center stage for their fast biodegradability.
waste-free future. Designing-out waste in the CPG industry
involves eliminating emissions and material waste
throughout the supply chain. This starts with decarbonizing Sustainable-products are trending to be
manufacturing or using renewable energy to remove carbon the future as consumer packaged goods
dioxide from fossil fuels in manufacturing.
(CPGs) are growing 7.1 times faster
Another way to design-out waste is to keep products and than non-marked CPGs.5 Even with the
materials in use. This can be done with re-use/refill or
repairing and return-to-manufacturer programs to reduce COVID-19 pandemic, consumers are
long-term waste. This all paves the way for new business continuing to buy sustainable products.
models to arise out of circular economy solutions.
Implementing the circular economy is not exclusive to small
companies. Large corporations like Unilever and Nestlé have Consumers want sustainable options without
begun experimenting with new business models by investing compromising the overall quality of the product. Using
in a program that ships products to homes and collects them design tools and simulation in product manufacturing
to later be refilled, helping keep waste out of landfills. Having could be a huge advancement toward sustainable
a digital twin in production, or a digital representation of products. For companies to uphold their commitment to
manufacturing production, is a beneficial way to see how sustainable products, it is essential to invest in material
materials can be re-used or repurposed. The digital twin can and new innovations. Investment in technology to create
be used to understand what the bill-of-materials (BOM) is, a comprehensive digital twin is being investigated by
which allows companies to discover how to re-use materials. consumer products companies. Simulating what waste is
Using a comprehensive digital twin is also beneficial to produced, and the re-use of materials or carbon
understand the structural integrity and material properties of emissions would allow companies to see environmental
the products. Then, simulation can be used to validate the impacts throughout the supply chain. This technology
quality of the new, reused sustainable products, is just as can then be used to achieve optimal, sustainable
comparable to non-sustainable products. production.

66% of consumers see a greater need for companies to get involved

in improving social and environmental outcomes.4

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White paper | Creating a sustainable future

Creating carbon neutrality

Companies are facing surmounting pressure from regulators and environmental impacts of the supplier,
and consumers to become carbon neutral. In 2018, 22 manufacturing line or product level can help companies
percent of industry greenhouse gas emissions came from quickly prevent energy loss. This would create greater
burning fossil fuels and specific chemical reactions from adherence to sustainability goals and an increase of
producing goods from raw materials.7 In an effort to lead environmental awareness, creating overall energy
change and reduce carbon footprints, over 280 companies transparency. Energy management is leading the way for
have made the commitment to use 100 percent renewable the future of carbon neutrality in manufacturing.
energy by 2050 as a part of the RE100 initiative. Furthermore,
regulators are pressing for change as they try to achieve While reducing emission levels in a company’s direct
governmental agreements such as the Paris Climate reach is crucial, it is important to recognize the impact
Agreement. These are ways for consumers to identify consumers have. For example, more than 60 percent of
companies aligned with their values. Regulations and laundry detergents have a footprint in the consumer-use
initiatives like the RE100 are helpful for holding companies phase. This correlates to the amount of energy used in
accountable for maintaining their sustainability heating warm-wash cycles.18 New innovations like
commitments. Companies must continue investing in laundry detergent that works efficiently with cold-water
sustainability to reduce their carbon footprint not only in cycles are underway. This will drastically reduce laundry
manufacturing, but in how the product is used. detergent’s carbon footprint. Similarly, innovations in
dishwasher detergent that have enabled consumers to
To achieve carbon neutrality, companies need to examine the eliminate the need for a pre-wash cycle.
direct impact their manufacturing systems have on the
environment. For example, Coca-Cola is already using 100 Using simulation and formulation
percent renewable electric energy. However, they still need to technology to test the efficacy of new
reduce their natural gas carbon footprint. They are leading
the way for carbon neutrality by implementing ways to detergent formulations could provide
increase their energy efficiency with energy management. valuable insight into how to perfect
Coca-Cola is reducing their water consumption, waste and
emissions. Using technology to quickly learn specific energy formulation and reduce environmental
impacts. Through this, creating carbon
neutrality is becoming a reality with
technology and innovation.

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White paper | Creating a sustainable future

Creating traceability

Consumers want to know who is making their food and Traceability is also beneficial for food safety recalls and
confirm it is being produced using sustainable practices. preventing waste. The Food and Drug Administration

“
(FDA) is looking toward implementing a policy to maintain
80% of North Americans want to transparency with the proposed Food Safety
Modernization Act (FSMA).
know the origin of the products they
buy, making it imperative to gain This act would “help the FDA rapidly and effectively
visibility into the supply chain.3 identify recipients of those foods to prevent or mitigate
foodborne illness outbreaks and address credible threats
Regulators also want to know the source of products, of serious adverse health consequences or death.”10 If
which demands traceability. Traceability technologies can traceability was instilled during the 2017 outbreak of E.
reduce food waste and verify sustainable sourcing such as coli in romaine lettuce, only recalled lettuce would have
validating fair trade and ethical sourcing. Today’s supply been disposed of as opposed to all lettuce. Using internet
chain lacks transparency on where products have been of things (IoT) sensors, blockchain and low-code
and where they will go. applications together could bring trusted traceability

“
across the supply chain, providing much needed insight
60% of executives have no visibility into consumers and regulators.
into their supply chain beyond However, with the potential and current legislation
first-tier suppliers, prompting the improving transparency, there is still no universal
need for industry change.9 traceability system. The current FDA regulation only
requires food records to “document one step forward to
Traceability is important to consumers and regulators for where food has gone and one step back to its immediate
understanding companies’ social and environmental impact. previous source.” 11This does not fully represent where
Consumers and regulators want access to transparent food has been throughout the supply chain. The FDA
information to make the best decision for environmental acknowledges this and is advocating and looking for a
sustainability. When it comes to harvesting certai n raw new system. Overall, the industry needs a robust,
materials such as coffee or chocolate, traceability is critical to industry-wide tracking program to keep up with external
ensure ethical and sustainable sourcing. Making sure that expectations and demands. As new regulations are
products include fair labor practices and are not sourced from implemented, having traceability throughout the supply
a fragile ecosystem are vital for the planet and the people chain would be beneficial to companies. To make
living in these communities. traceability a reality, it requires companies to invest in
technologies such as blockchain and artificial intelligence
Regulators are expediting this by implementing a policy for (AI). Blockchain and AI are options for creating trusted
companies to maintain transparency. For example, the traceability. Having a record of where the products have
California Transparency in Supply Chains Act of 2010 requires been and where they will go and a record of suppliers,
companies to report their efforts. This promotes sustainable provides customers, regulators and companies full
sourcing throughout the supply chain. visibility into the supply chain.

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White paper | Creating a sustainable future

Creating a sustainable food system

Another significant component of creating a sustainable Solving the world’s food instability requires having
foods supply is social sustainability. In order to protect the enough land to produce nutritious food. Using
planet, we must protect the people who inhabit it. One of technology in agriculture is one way to achieve this. The
the greatest concerns of social sustainability is the global idea of Industry 4.0 in agriculture, or Agriculture 4.0, is
food system leaving people hungry, obese or malnourished. trending to be the future. It is a concept that treats
agriculture like a manufacturing plant to increase yields.
Vertical farms, growing food vertically rather than
horizontally, and hydroponics, growing crops in water,
are using Agriculture 4.0 techniques to produce more
Globally, 850 million people go food efficiently. They are exponentially increasing yields
hungry each day.12 while decreasing the need for land, pesticides and water.
By 2050, we need to double the They can also be grown an urban area, decreasing
current amount of food available carbon emissions associated with transportation. These
to feed nine billion people.12 factors are making vertical farms an environmentally
Agriculture will account for half sustainable option for feeding the future.
of all greenhouse gases in 2050.13 Using IoT sensors is critical to make Agriculture 4.0 a
reality. IoT sensors are being used to track the amount of
soil nutrients, water consumption and sunlight. These
factors are adjusted as needed to create optimal growing
conditions with the least amount of resources.
These statistics call for immediately improving
Leveraging IoT data with analytics can be used to track
food and environmental sustainability. and manage waste so it does not pollute local
ecosystems.
About one-third of all globally produced, consumable
food goes to waste, however, pinpointing the sources
and causes of all food waste has yet to be fully known.14

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White paper | Creating a sustainable future

Creating a sustainable future

To solve food insecurity, incorporating technology is critical. Grain-fed beef must consume about seven pounds of
Identifying bottlenecks causing food waste, increasing grain to produce one pound of beef.17
traceability in the supply chain, optimizing manufacturing The manufacturing and processing of these animal
execution and better planning to match supply with demand products also emits great amounts of carbon. This is
are all ways that could help prevent food waste. Online calling for a shift away from animal products. Shifting
communities are tackling food waste by using the sharing from animal products and producing plant-based foods
economy to rescue surplus or nearly expired food for presents a way to create a sustainable future and address
consumption. Increasing the amount of food and decreasing food insecurity. Many new animal product alternatives
food waste are required to solve food insecurity. The final such as vegetarian burgers and almond milk are
possibility to increase the food supply is with biotechnology. becoming staple items on every menu. As consumers are
Biotechnology can improve plants or develop microorganisms becoming increasingly privy to their environmental
to create a better crop. It can also help make farming impact, new plant-based substitutes need to be
production more manageable and cheaper. Biotechnology comparable or better than traditional animal products.
can be used to pick the crops with the best genetic traits to
increase crop production. It helps with pest control, weed Design simulation and exploration technologies
management and makes food more nutrient-rich or longer allow food formulators to optimize the nutritional
lasting. Advanced simulation technology combined with makeup and flavor profiles of a product to make
biotechnology can be used to identify how to increase the best plant-based alternative. They can also be
production with seeds and crossbreeding. The overall use of used to map the carbon footprint of processing
biotechnology can create a larger, more nutrient-rich crop and manufacturing products. Technologies like
yield and help solve food insecurity. these are helping create the best plant
alternatives for consumers.
Animal product alternatives are also starting to take center
stage to combat food insecurity. Animal products are When these solutions are deployed on the
extremely land intensive. Xcelerator Cloud, companies can connect
people, product data, and processes across
An estimated one-third of the world’s land is growing disciplines and around the globe for faster
livestock feed.15 This is land that could be used to grow development. This enables scaling formulas and
nutritious food for people. Livestock production also emits an recipes quickly in the cloud to meet changing
estimated 14.5 percent of global greenhouse gas emissions.16 manufacturing needs.

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 Conclusion
New sustainability innovations and investments are at the brink of
providing substantial changes. Regulations and inventions are being
introduced daily, bringing us one step closer to creating sustainable
development. Companies must evaluate their entire enterprise to see if
they are equipped for the sustainable and technological changes of
tomorrow. By examining the four areas of the circular economy,
decarbonization, traceability, and global food insecurity, we can see the
need for companies to aid sustainable development with the use of
technology. With the Xcelerator™ portfolio, the comprehensive and
integrated portfolio of software and services from Siemens Digital
Industries Software, we are equipped to deliver technological solutions
that enable companies to achieve sustainability.

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White paper | Creating a sustainable future

References

1. James Pennington. “Every minute, one garbage truck of plastic is dumped into our oceans. This has to stop.” World Economic
Forum, 27 October 2016.
2. Keith Breene. “Food security and why it matters.” World Economic Forum, 18 January 2016.
3. Karl Haller, Jim Lee and Jane Cheung. “Meet the 2020 consumers driving change.” IBM.
4. “Advice for retailers: innovation in sustainability is the key to more successful business.” Serai, 17 December 2020.
5. Randi Kronthal-Sacco, Tensie Whelan. “CSB sustainable market share IndexTM.” NYU Stern, 16 July 2020.
6. “What is a circular economy?” Ellen MacArthur Foundation, March 2021.
7. “Global greenhouse gas emissions data.” US EPA, 10 September 2020.
8. “Plastics: material-specific data.” US EPA.
9. Francisco Betti, Hernan Saenz, Juliane Stephan. “4 ways industry can make supply chains more sustainable.” World Economic
Forum, 18 September 2020.
10. Center for Food Safety and Applied Nutrition. “Food traceability list.” U.S. Food and Drug Administration, 12 January 2021.
11. “Tracking and tracing of food.” U.S. Food and Drug Administration, 21 September 2020.
12. Jonathan Foley. “Feeding the world.” National Geographic.
13. “Farming, food and climate change.” International Monetary Fund, December 2019.
14. “Food loss and food waste.” Food and Agriculture Organization of the United Nations.
15. “Livestock and landscapes.” FAO.
16. “Key facts and findings.” FAO.
17. “Is meat production an efficient use of resources?” Beyond Meat – Go Beyond®.
18. “P&G Embraces Natural Climate Solutions to Accelerate Progress on Climate Change and Will Make Operations Carbon Neutral
for the Decade.” Procter & Gamble News, 16 July 2020.

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About Siemens

Siemens Digital Industries Software is driving transformation to enable a digital enterprise where
engineering, manufacturing and electronics design meet tomorrow. Our solutions help companies of
all sizes create and leverage digital twins that provide organizations with new insights, opportunities
and levels of automation to drive innovation.

For more information on, visit siemens.com/software or follow us on LinkedIn and Twitter.

Siemens Digital Industries Software Where today meets tomorrow.

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