Two-thirds of Board-level executives at UK-based manufacturing companies agree that sustainability is a high priority and a third have decarbonisation plans in place, but how much progress is being made?
Research conducted by management consultancy, Vendigital, with 201 C-Suite Executives in the UK’s manufacturing sector shows that progress in decarbonising products, processes, and supply chains is patchy at best, and this could cause UK industry to fall behind global competitors in the race to net zero.
63% of C-suite decision-makers said that sustainability is a high priority for the business and 31% confirmed that they have a carbon reduction plan in place. The majority (70%) have gone as far as setting ‘net zero by 2030’ targets, but about two thirds (61%) aren’t sure that their sustainability goals will be achieved.
Even though most manufacturers have mature sustainability strategies in place, the research suggests that their plans for delivery may be underdeveloped and under progressed.
Alessandra Del Centina, managing consultant at Vendigital, said: “Manufacturers don’t know if their sustainability strategies are deliverable. In many cases, they have targets and plans in place, but they are unsure about whether they will be achieved.
“This lack of certainty could be rooted in a lack of reliable data – for example, only one in five (19%) respondents confirmed that their business is measuring GHG Scope 1, 2 and 3 emissions. Some may not even realise that Scope 3 emissions must be tackled to achieve net zero.”
Lack of urgency in searching for carbon reduction opportunities
Manufacturers recognise that in order to decarbonise they must look for carbon reduction opportunities. Despite this being ranked as a primary concern by respondents, fewer than one in three (31%) were actively looking for carbon reduction opportunities.
Del Centina commented: “Without clear information about the carbon cost of specific products or processes, it is impossible to identify and prioritise decarbonisation initiatives.
“For example, it’s usually possible to identify ‘quick wins’ where a relatively small change, such as a low-carbon product switch or a process efficiency measure designed to minimise machine downtime, can deliver a significant reduction in carbon emissions. More complex initiatives that involve supply chain collaboration and project support can be planned in over a longer time frame.”
Barriers to sustainability improvements
While there are many barriers to progress when it comes to decarbonisation, the headwinds affecting many industries including rising costs, high interest rates, geopolitical uncertainty, increasing global competition and the risk of supply chain disruption, are a distraction for decision-makers.
82% of Board-level executives admitted that various short-term pressures have held up or otherwise affected their ability to plan and implement sustainability strategies.
When asked to rank barriers to achieving progress on the way to net zero, half of respondents (50%) identified that maintaining Board-level engagement with sustainability issues was the biggest issue. Other key barriers included a lack of resources, skillsets, capital and data.
Del Centina concluded: “Board engagement (in sustainability) is still an issue despite growing pressure from customers, stakeholders and regulatory bodies. It could partly be a result of the misconception that decarbonisation strategies automatically bring extra cost.
“While they often require investment in areas such as renewable energy systems, hiring people with the right skillsets and developing AI-led decision-making models, they can also deliver significant cost savings in the short, medium and long-term.
“Developing decarbonisation plans that leverage cost benefits upfront to help offset investment further down the line can help businesses to decarbonise and realise their sustainability goals.”