Sustainability has been a much-discussed topic in recent years. It is on the agenda for companies if only because the EU is exerting pressure with a directive. In the EU for example, from 2026 at the latest, companies with 250 or more employees must prepare sustainability reports and disclose their CO2 emissions. This reporting obligation is not an end in itself. The core aim for European companies is to achieve a carbon-free economy by 2045. The consequence is that companies must move toward sustainability, climate neutrality, and a circular economy.
CO2 values and a lot of other information are required to measure the success of sustainability measures. As a reminder: Greenhouse gas emissions are determined in three scopes.
Companies need to act now because it is not just a question of meeting EU reporting obligations. The EU has defined a taxonomy with sustainability criteria for the financial market. Companies that fail to provide the relevant information will be classified in a higher risk category and may have difficulties obtaining financing. Consumers are also paying increasing attention to the sustainability of products.
In addition, many companies are part of a wider network of suppliers, which creates further pressure. Industrial companies demand detailed information on sustainability from their suppliers. Anyone who is unable to do that may not be listed as a supplier in the future. That has long been the case in cybersecurity, for example. Most car manufacturers require their suppliers to be certified in accordance with the TISAX security standard.
Looking at product life cycles through a sustainability lens is a challenge in industry. PLM solutions are ideal for that since they meet the basic requirement of CO2 balance sheets through their parts lists alone: transparency. After all, for sustainability, the components and raw materials from which products are made must be known.
The circular economy (CE) is about conserving resources and energy, avoiding waste, and establishing material cycles. In contrast to the current “throwaway economy,” the circular economy is based on nature as the role model. Three principles apply here:
The circular economy is a sustainable model for production and consumption. Existing materials and products are shared, leased, reused, repaired, refurbished, and recycled for as long as possible. That extends the lifecycle of the products. The old “sell & forget” model no longer works.
This presents companies with new challenges. They need to consider and compare the raw materials and preliminary products from a sustainability perspective as early as the design phase of a new product. The post-sale phase also comes into focus. Modern PLM software like that from Revalize can help here.
Ultimately, it must be possible for all customers to return a product to the manufacturer even after years or decades. To put it somewhat bluntly: If a product ends up in landfill at the end of its lifecycle, it has been developed incorrectly and is not suitable for the circular economy. Such problems can be avoided with PLM.
The parts lists from a PLM solution are also the basis for the digital product passport, which for example will be mandatory throughout Europe from 2027, although initially only for batteries. With its help, all stakeholders should be able to access important information during the product lifecycle to facilitate the circular economy. In the final expansion stage, the passport must be produced for each product and be available for downloading at a central location on the Internet.
This is a data record that contains all the information about the composition of the product, in other words, all materials and components, as well as a list of their manufacturers and suppliers. It also provides information about CO2 emissions and other environmental impacts, repairability, necessary replacement parts, and the proper disposal of a product.
The numerous requirements relating to sustainability clearly show that holistic product lifecycle management with a corresponding PLM solution is one of the new core applications. Planning and process-oriented ERP solutions will not be sufficient to meet the various transparency obligations.
