Arthur D. Little (ADL), the world’s first management consulting firm, today released an exclusive report exploring ways to balance economic growth, environmental care and social well-being. The report, titled Imperatives for Sustainable Industrial Development: The KSA Case spotlights the industrial sector as a key development focus and examines ways to maintain its pace in a sustainable manner.
Proving to be a rapidly growing industrial force, the Kingdom is home to more than 10,000 industrial facilities and ranks 41st in the Competitive Industrial Performance Index. Saudi Arabia’s National Industry Strategy aims to increase the value of the Kingdom's industrial exports to about $149 billion by 2030. Saudi Arabia's industrial sector accounts for around 46% of the country’s total emissions, followed by power generation at 28%, and transport at 19%. It presents an opportunity for the development of green technologies and industries in the Kingdom.
Dr. Adham Sleiman, Partner Energy and Utilities, Arthur D. Little Middle East, said: “The MENA region has made significant strides towards sustainable development, with ambitious goals to reduce their carbon footprint and increase the share of renewables in their energy mix. However, more concerted efforts and cooperation are needed to accelerate the transition towards long-term carbon neutrality. To achieve industrial sustainability objectives, countries need to accelerate their transition to renewable energy sources and adopt more ambitious targets. With Saudi Arabia as a point of reference, our latest report outlines ways to reduce carbon emissions and mitigate the impacts of climate change for the benefit of both people and the planet.”
Dr. Adham Sleiman, Partner Energy and Utilities, Arthur D. Little Middle East
As the GCC’s largest industrial powerhouse, KSA is committed to building a greener future. It has implemented ambitious targets for the future, aimed at reducing industrial emissions by 65% by 2050. The Kingdom launched numerous initiatives across the different economic sectors and specifically in its industrial sector. In the report, ADL has identified several dimensions across the industrial value chain that organizations should tackle to ensure sustainable growth. These include:
1. Sustainable industrial inputs: Energy is essential to industrial operations; addressing its role in industrial development is necessary to a successful strategy. Transitioning from environmentally damaging sources to renewable energy alternatives is a critical step toward increased sustainability.
2. Refined manufacturing processes: According to the World Government Summit, more than 30% of total GHG emissions are generated by industrial processes. Focusing on improving industrial manufacturing processes is proving to be significantly impactful — improving the energy efficiency of industrial processes could result in reducing manufacturing emissions by 8%.
3. Efficient shipment & distribution: On top of industrial inputs and manufacturing processes, shipments and distributions of manufactured products are proving to be key contributors to the sector’s emissions. Shipping and distribution can be optimized by rolling out green storage logistics, adjusting routes, and applying fuel-efficient processes.
4. Green marketing: Adopting reusable packaging practices is another way manufacturers can reduce their carbon footprint. Most notably, replacing single-use plastic with eco-friendly alternatives benefits the environment and saves money for companies.
Aside from reducing emissions, the government is also working to move the industrial sector away from fresh water. There are 16 industrial cities in the Saudi Authority for Industrial Cities and Technology Zones (MODON), and the government aspires to source 70% of its water from treated industrial wastewater by 2030.
Amer Hage Chahine, Principal, Energy and Utilities, Arthur D. Little Middle East, said: “Sustainable industrial development is now a requirement for both private businesses and governments due to increasing regulatory pressure and consumer environmental awareness. Saudi Arabia's government facilitates industries sustainable development by setting best practices, introducing innovation-related initiatives, and fostering knowledge sharing. Our latest report highlights key approaches to promote sustainable industrial development through policies and incentives that encourage businesses to adopt environmentally friendly practices.”
Amer Hage Chahine, Principal, Energy and Utilities, Arthur D. Little Middle East
According to the report, the Saudi government is unifying the region’s efforts through consistent collaboration between GCC countries, aiming to boost the sustainable development of industrials and synergize the region’s fight against climate change. This includes efforts to reduce GHG emissions, implement waste management solutions, and raise awareness of industrial sustainability.
The Kingdom’s efforts have been incorporated into a joint plan with GCC countries to adopt the concepts of circular economy within the industrial sector. The plan aims to ensure that the percentage of industrial facilities adopting circular economy practices reaches at least 50% of all industrial facilities within five years in each of the GCC countries.
Explore Arthur D. Little’s recommendations to achieve tangible progress and enable long-term carbon neutrality in further detail here.