New research suggests post-COVID-19 industry ready to take on net-zero challenge
As industry looks to rebuild and grow after the lockdown, there is an opportunity for manufacturers to refocus on their sustainability goals and work with Government to deliver a green recovery according to new research.
Research, undertaken by Make UK and leading energy company E.ON prior to the lockdown showed that sustainability and profitability go hand in hand: manufacturers who put sustainability at the heart of their businesses have seen real benefits from doing so in the last 12 months with 40% reporting increased profit margins and 30% increased competitiveness as a result.
The report, Towards a net-zero carbon UK manufacturing sector, takes the temperature of sustainability and energy efficiency progress in manufacturing and shows that 90% of manufacturers are aware of the 2050 net-zero target while almost half see this as a business opportunity which they are grasping as the roadmap to sustainable growth once the world opens up again.
Before COVID-19 and the global impacts hit, 30% said they have made real inroads into energy efficiency investments in the last 12 months, with the majority of the changes in relation to building improvement, equipment and manufacturing processes.
The second most impactful of technical measure for 11% of companies was improving the energy efficiency of buildings.
Other simple measures which did not require major investments included buying energy from renewable sources, switching to LED lighting and control or replacing outdated equipment such as fans and pump systems.
Businesses revealed that one of the biggest barriers to moving further forward with major energy efficiencies is the cost of technology, further hampered by the fact that accessing available Government funding and grants is often difficult.
Companies also said that better fiscal incentives to enable investments in energy saving technology would provide a further boost to activity in this area.
Despite this research being undertaken shortly before the COVID-19 crisis began, our recommendations remain even more valid and relevant in this context.
The study looked in detail at specific actions manufacturers have taken to respond to the net-zero target, with simpler measures some of the most popular across the sector.
In the last 12 months, 40% of respondents have renegotiated their energy contracts and 65% were able to get a better deal.
The majority of manufacturers (75%) understood the benefits of digitisation and over half (57%) have already installed smart meters while 78% collect their energy usage data. A further 13% plan to do so.
Companies told us they are also working closely with staff with two thirds (65%) of manufacturers already having introduced behavioural change activities to convince their employees to improve energy efficiency.
The main driver for implementing energy efficiency measures remains cost reduction, but improving company ethos is now seen as important as part of overall business strategy.
Stephen Phipson, CEO Make UK, the manufacturers’ organisation, said: “These results show that manufacturers are committed to playing their part in the transition to a net-zero carbon economy. As businesses recover and learn from the COVID-19 crisis, they have the opportunity to ensure improved sustainability is factored into their resilience plans. As well as taking steps to reduce energy use and CO2 emissions, they are developing the innovative new products and services we all need to decarbonise.”
Michael Lewis, CEO, E.ON UK added: “While the response to COVID-19 rightly remains the priority for most manufacturers in the short term, the UK’s net-zero target remains the key challenge for our future. It is heartening to see from this research that awareness of net-zero is high and that manufacturers are investing in energy efficiency and seeing the commercial benefits.”