In the field of climate change and sustainability, the Middle East has been struggling with an unspoken reality—the choice between economic prosperity and environmental responsibility. The intersection of the thriving industry opportunities in retail, trade, construction, manufacturing, and export, against the stark backdrop of rising carbon emissions, demands our undivided attention in 2024. The International Energy Agency’s stark warning that most countries in the MENA region lack formal targets for achieving net-zero carbon emissions is an alarm bell we can no longer afford to ignore.
The true cost of sustainable manufacturing
The challenge lies not only in recognizing the need for change but also in understanding the true cost of sustainable manufacturing. The process involves substantial capital investments, navigating uncharted territories, and communicating the imperative for change across all levels of business. In the complex landscape of luxury retail, where the supply chain involves importing materials, intricate transformation processes, and global shipping, the environmental impact becomes expansive and challenging to accurately track.
McKinsey & Co. reports that 70% of businesses claim sustainability in their practices, with luxury retail brands boasting in-house environmental welfare departments. However, a gap exists between claims and understanding—brands may communicate their commitment through extensive reports, but comprehension of emission calculations and day-to-day processes for reducing emissions often falls short.
Consumer sentiment, as evidenced by a 2023 Deloitte study, indicates a willingness to pay more for sustainability. A third of consumers express higher trust in brands recognized as ethical or sustainable by independent third parties. This shift in consumer behaviour underscores the urgency for direct action from household name brands.
The Carbon Conundrum
Examining the feasibility of large organisations adopting controls and initiatives observed in smaller entities and grassroots movements prompts a vital question. Is it viable to shift focus from the financial aspects of sustainability to educating and empowering consumers for meaningful action? Collaboration across the supply chain becomes paramount, necessitating retailers to engage closely with suppliers, manufacturers, and stakeholders for innovative and cost-effective sustainable solutions.
In this pursuit, standardisation of CO2 calculations is key, offering uniform carbon footprint assessments across industries. Here, the new Alpha Nero software stands ready to contribute on a wide scale. To streamline and measure this complex process, we used world class standards that meet the Greenhouse Gas protocol for material certification in addition to collaborating with local energy providers such as DEWA. The outcome was a software solution capable of drilling down to and segregating a client’s emissions by project, material, and even specific elements within each project.
The Alpha Nero software not only provides detailed personalisation for manufacturing processes but also provides scalability, an actual versus ideal benchmark across all scopes, ease of implementation, limited manual input and tangible visualisation of emissions impact. Looking ahead, the next stage involves harnessing the power of machine learning and AI to identify discrepancies across processes and recommend alternate materials as well. This advanced capability positions us to not only refine our internal processes but also has the potential to rank brands based on their sustainability emissions, further advancing our commitment to driving positive change within the industry.
Consumer expectations in today’s marketplace demand sustainability as a fundamental requirement, not an optional endeavour. Ignoring this imperative shift can impact both the bottom line and brand goodwill. As consumers prioritise environmentally conscious practices, businesses must embrace sustainability as a strategic choice, integral for thriving in a value-driven consumer landscape.
The Middle East, with its rapidly developing industries, faces an unprecedented challenge in resource consumption. The call for sustainability is louder than ever, and fast retail’s extensive waste and emissions act as a catalyst for change. Alpha Nero, as a regional manufacturing business, understands that sustainability is not just an option—it is the only path forward.
Sustainability that improves the bottom line
Dispelling the myth of sustainability being ‘too expensive,’ the industry must educate, innovate, and embrace change. Governments and regulatory bodies in the GCC should play a pivotal role, establishing comprehensive frameworks and offering incentives for eco-friendly practices. Alpha Nero’s homegrown carbon calculation solution exemplifies this commitment, emphasising the need for nuanced approaches to manage extensive information. To illustrate the point that it is entirely possible to run a business utilising truly sustainable practices, At Alpha Nero, between January and October 2023, we have reduced landfill waste by half and increased revenue by 35%. The company’s employee headcount has also increased by over 100% to 250 people during this period.
In conclusion, the argument that sustainable manufacturing is ‘too expensive’ can be shifted with education, social responsibility, innovation, and determination. The manufacturing sector has the power to be a driving force for positive change by aligning business practices with global sustainability goals. The cost of sustainability is not expense; it’s an investment in a future where responsibility, innovation, and prosperity coexist harmoniously.
By Simon Hacker, CEO, Alpha Nero