Manufacturing a sustainable advantage

With all eyes fixed on the upcoming 26th UN Climate Change Conference of the Parties (COP26) in Glasgow, Lee Collinson, National Head of Manufacturing, Transport and Logistics at Barclays, looks at the path to net zero and some of the benefits that can be afforded by manufacturers by following a sustainability-first agenda.

In line with its commitment to reach net zero carbon emissions by 2050, the UK Government has just released its Net Zero Strategy. This landmark document outlines the UK’s path to net zero, which will include securing 440,000 well-paid jobs and unlocking £90bn in investment in 2030.

The path to net zero

The government’s Net Zero Strategy builds on the Prime Minister’s 10-Point Plan for a Green Industrial Revolution, as well as many other ambitious existing policies, including the Energy White Paper, North Sea Transition Deal, Industrial Decarbonisation Strategy, Transport Decarbonisation Plan, Hydrogen Strategy and the recent plans to decarbonise the UK’s electricity system by 2035.

As the 368-page paper highlights: “By moving first, the UK can get ahead of the pack and make the birthplace of the industrial revolution the home of the new Green Industrial Revolution.” For manufacturers, the prospects are not only exciting but potentially game changing.

Speaking about the government’s new Net Zero strategy, Stephen Phipson, CEO of Make UK said: “Today’s plans are a very positive step on the journey to net zero by 2050, with practical support to help businesses transition to green and clean production processes. The creation of 2 hydrogen clusters in Britain’s industrial heartlands puts our manufacturing powerhouse at the centre of innovation and will enable companies to make the switch away from fossil fuels at greater speed. It will be vital to produce enough hydrogen supply to feed not just the industrial clusters but all the manufacturers across the country.

He added that it is important to make sure that “today’s green investment plans go hand in hand with upskilling of the country’s workforces to make sure that we have the green skills to make these essential changes a reality.”

Manufacturing’s part in the net zero puzzle

Barclays’ recent Benchmarking Sustainability report reveals the manufacturing industry’s important part in the overall net zero puzzle and the encouraging news is that the majority of firms recognise their role. Indeed, 46 per cent of manufacturing companies said they intend to invest in sustainability for commercial (financial) reasons over the next five years. This compares to just 20 per cent overall across all industries.

The bottom line is investing in sustainability makes financial sense for manufacturers. The aforementioned report also shows that 80 per cent of firms have already realised commercial benefits from implementing environmentally responsible programmes. Furthermore, 37 per cent of firms said they had achieved reduced operational costs as a result.

However, the manufacturing sector needs to do more. Compared to other industries, manufacturing has been slow to publish external sustainability targets (16 per cent vs. 20 per cent average) and many (54 per cent) firms haven’t published anything at all, internally or externally.

Sustainable manufacturing benefits

While it’s good to see that sustainability and net zero are now firmly on manufacturers’ radars, commercial benefits, while important and good for the balance sheet, shouldn’t be the driving force. For manufacturers, there are a number of other benefits that can be afforded by adopting a sustainability-first agenda.

Sustainability increases long-term business viability

First and foremost, focusing on a sustainability-first agenda now will help manufacturers set themselves up for the future. As ambitious a plan as it is, net zero is coming. Firms that resist embracing it or leave their plans until the last minute, risk being left behind.

In fact, during a Directors’ Forum virtual round table event held by The Manufacturer earlier this year, it was suggested that any company not undertaking their sustainability journey now might not be in business in 10 years’ time. While this is obviously a broad statement, it’s certainly one that is becoming easier to appreciate.

 Sustainability is good for brand

According to research by Deloitte, almost a third of consumers say they have stopped purchasing certain brands or products because they had ethical- or sustainability-related concerns about them. As the net zero agenda gains more pace, isn’t it likely that this sentiment will become even more prominent?

By showing that they are working towards a sustainability-first agenda, manufacturers can boost their public image and, in theory, realise more business as a result.

 Sustainability helps attract the best talent

How about sustainability as a differentiator when it comes to attracting the best talent? In the same way that consumers want to purchase from companies that are shown to be sustainability-focused, the best talent – particularly emerging talent – also wants to work for such firms.

Manufacturers that show themselves to be sustainability-conscious and following ethical business practices will stand out as a place where people want to work. And given that there is a significant skills gap in the manufacturing sector – more so than any other, according to research published earlier this year by Search Consultancy – differentiating themselves in a strong recruitment market for candidates could be pivotal for firms to secure the talent they need to grow and thrive.

I’d love to hear your thoughts and continue the sustainability conversation, so please connect with me on LinkedIn.

If you’d like to read Barclays’ full Benchmarking Sustainability report, you can access it here.


About the author

lee e1588677203138 257x274 1Lee Collinson is National Head of Manufacturing, Transport & Logistics at Barclays.

In his role, Lee travels extensively across the length and breadth of the country seeing businesses in the manufacturing, transport and logistics sectors. He is passionate about helping businesses across the UK to realise their growth aspirations.

Source: Manufacturing a sustainable advantage

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