ESG and net zero manufacturing

6th November 2023

Helping manufacturers increase their insight into their supply chains, environmental impact and employee safety, whilst improving operational efficiency by reducing costs and waste.

Are ESG and net zero manufacturing the same thing?

Net Zero plays an important role in ESG reporting, but they are not the same thing. The UK government’s 'Net Zero Growth Plan' sets out policies, strategies and proposals for decarbonising all sectors of the UK economy to meet our net zero target by 2050. Whilst environmental, social and governance (ESG) is a framework used to assess an organisation's business practices and performance on various sustainability and ethical issues. The “E” in ESG is focused on environmental stewardship and demonstrates the performance of an organisation's efforts towards climate change, sustaining natural resources, reducing pollution and waste.

Net zero changing manufacturing processes, but not quickly enough

There have always been external drivers that influence the changes in manufacturing, things like technology, customer preferences, regulations, competitor moves, or supplier and sourcing instability. However, whilst the governments 'Net Zero' policy framework has continued to develop over the past year, but it's not happening at the required pace for future targets.

According to the British Business Bank smaller businesses account for 50% of all UK business-driven emissions. Whilst 57% of smaller businesses reported they were aware of the government's 2050 net zero target, the same research found that 76% of smaller businesses have yet to implement a decarbonisation strategy. Costs, lack of appropriate technology, infrastructure or vehicles, and an inability to find information on net zero were cited by smaller businesses as some of the barriers to preventing action.

How ESG could help your business structure its sustainability strategy

Using the information and data from a robust ESG reporting framework, will help UK manufacturers to structure its sustainability strategy and boost decarbonisation. Although ESG is not exclusively focused on environmental factors, the increasing emphasis on net zero and wider social considerations is putting ESG centre stage. The reporting framework is applied across a myriad of specific purposes with the ultimate objective of measuring elements related to sustainability and societal impact of a company or business. ESG as part of an overall business strategy helps demonstrate sustainability in your supply chain and report on things like climate risk management.

According to Make UK research, ‘In a bid to lead in areas around ESG, two-fifths (42%) of manufacturers have set ESG targets or KPIs. A further one in five companies are considering introducing ESG targets or KPIs’. As discussed above, the rise of environmental, social, and governance factors is growing across all industries, but it will certainly advance sustainability efforts in manufacturing.

How can ESG drive operational efficiencies, long-term growth and competitiveness?

As the cost of energy and materials continues to rise, manufacturers are focussing on ways to reduce their energy consumption and achieve sustainable production. Implementing sustainable processes and embracing technology are key to optimising production times to minimise energy and utilities consumption, optimise quality and yield and improve performance and utilisation.

Need a little help achieving net zero, or implementing an ESG framework?

We can help you identify and actively drive out cost - but it's important to note, we're not consultants. However, the first step is to understand your product and logistics operations, your customers, and your biggest headaches. Then we provide an objective analysis, ROI cost projections, and if our solutions are implemented - we guarantee you’ll achieve the agreed cost saving, or we pay!

Here’s how the 360 onsite logistics audit and assessment works!

Put us to the test, what have you got to lose?

Contact us for a FREE ‘on site' logistics audit – carried out under a non disclosure agreement - our findings will be reported in full confidence and will provide a detailed analysis of where savings and improvements can be made.

_{There’s only one condition - you must be UK based and be operating in the automotive sector, with a head count of around 25 - 30 or more operating in logistics roles.}