30 October 2023
73.7 million tonnes of the UK’s carbon emissions come from manufacturing each year. By working together, manufacturing SMEs can help us reach net zero and find a competitive edge.
Net zero. Sustainability. Decarbonisation.
These are related global issues that we all have a duty to tackle yet it can feel daunting for individuals who might feel their contribution will make little or no difference. But for the UK’s small and mid-sized manufacturing businesses (SMEs) looking to contribute to the nation’s net zero ambition, there is strength in numbers.
In 2019, the UK became the first major economy in the world to pass a law to reduce greenhouse gas emissions to net zero by 2050 and reduce them to 68% of 1990 levels by the end of this decade.
The Office for National Statistics (ONS) puts the number of manufacturing businesses of all sizes in the UK at around 138,400. At the same time, its figures also place manufacturing as the largest emitting industrial sector, generating around 16% of territorial UK carbon dioxide emissions, a total of 73.7 million tonnes.
If we are to reach net zero with a globally competitive manufacturing sector, this is not sustainable.
As the name suggests, sustainability is largely about the ability of businesses to survive and thrive in a changing world. Sustainable manufacturing includes economic, social and environmental components and all three are complementary. A business wants to enable economic growth with a healthy workforce while reducing the environmental impact of its operations.
Reducing environmental impact, and striving for a net-zero goal, means businesses need to become more energy efficient, lower their consumption of material and reduce waste. This also reduces costs which will improve your bottom line and making your business more competitive, especially in an increasingly decarbonised world.
And there are a range of benefits for businesses, communities and the world as a whole in doing so.
Apart from supporting the UK in achieving the legally binding net zero targets, this helps the local environment and also ultimately the planet – after all carbon emissions don’t respect national borders.
A recent survey carried out by Make UK found that through improved efficiency which in turn had a positive impact on sustainability, and nearly one in three saw increased competitiveness.
Consumer attitudes are changing to favour more sustainable business practices. For example, Deloitte found that most consumers say the commitment of businesses to sustainability influences their trust in those businesses. Specifically, 34% of consumers stated that their trust in brands would be improved if they were recognised as an ethical/sustainable provider by an independent third party.
Original equipment manufacturers and “Tier 1” companies are starting to ask their suppliers for evidence of the carbon emissions of the production processes used and products made. For example, in the EU, legislation like the Carbon Border Adjustment Mechanism (CBAM) will look to tax materials supplied into the EU to prevent carbon leakage making it all the more important that manufacturers of all sizes are aware of their emissions and upcoming legislation.
Sustainability is important, for the planet and for the future of business. The good news is there are plenty of steps businesses can take and measures that can be put in place individually to improve sustainability and reduce carbon emissions.
But it’s through collaboration that the UK’s SME community can make massive environmental improvements.
We spoke to Dr. Russ Hall, the HVM Catapult’s lead for the Reduction of Industrial Emissions and WMG’s lead for Sustainable Manufacturing and Circular Economy, to find out more.
Russ gave a hypothetical example of an small manufacturer in the metals industry, who’d identified a need for new equipment that could help improve energy efficiency and reduce operating costs but wasn’t on the market. He said:
On their own, they’re less likely to find an equipment manufacturer that will spend the time making new or bespoke equipment for them to use.
“But if, through a trade body organisation like the Cast Metals Federation, SMEs come together, share problems and realise a common need, equipment manufacturers are more likely to address that need. Together they show not only the market pull for innovative new equipment but also the collective environmental benefits. Solving a common problem for multiple manufacturers will have a much bigger impact than solving a problem for one company at a time.
In another example, Russ reveals he’s part of Coventry City’s Climate Change Board, where he’s been involved in discussions about the possibility new type of housing insulation made from recycled plastic.
Imagine if a group of SMEs came together to start a new supply chain that recycled waste into something like insulation to solve a social and environmental need, where the new product made economic sense for all involved.
“This would create a small supply chain within the city of Coventry, producing a new innovative product that is truly game changing for society and the environment. Individually it would be difficult for one SME to make this happen, it’s a risky proposition and it would be difficult to pull all of the different parties required together.
“But a group of SMEs, in conjunction with the City council, some innovation funding and perhaps the HVM Catapult, all working collaboratively, could create a completely new, sustainable product line that currently doesn’t exist.
The potential of such collaboration is clear to see – so why doesn’t it happen more often?
One of the biggest barrier to collaboration, according to Russ, is not worries over competitive advantage or the will to change– it’s time. And that’s where the HVM Catapult can help.
SMEs have different pressures and obstacles to big manufacturers. All manufacturers are limited in terms of resource – time and money, but for SMEs this limitation can be more acute.
“As a network, the HVM Catapult has the capability to bring groups of SMEs together and help set that kind of collaboration in motion.
But it’s about more than simply introducing businesses to one another and letting them get on with it.
At the HVM Catapult we’re able to see the bigger picture in a way that individual SMEs or businesses, despite having brilliant specific knowledge and capabilities, may not.
“We’re then able to co-ordinate and show everyone where they fit into the process, which piece of the jigsaw they are, and how it can all work when put together.
Deciding to become more sustainable can be a daunting prospect, but a great place to start is with our new Manufacturing Energy Toolkit.
This involves a team of our experts with experience and industry know-how visiting your production site for an in-depth assessment – identifying key areas where you could save money.
Once the problems are identified, we can work with you on a roadmap for cutting your energy usage. We also focus on the greenhouse gas emissions of your energy usage, giving you data that can help build your position in the market.