Despite soaring energy costs - only 29% of UK manufacturers consider net zero to be a priority, survey finds

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Energy prices are negatively impacting the majority of UK SME manufacturers, according to the latest Manufacturing Barometer survey by SWMAS. But, with the government’s ambitious target to achieve net zero by 2050, are SMEs on course to succeed?

This quarter’s statistics indicate half of respondents (51%) see net zero as a positive expansion for UK manufacturing. However, less (42%) are confident this will actually be beneficial for their individual business.

Almost three quarters of manufacturing firms have said they are already working towards net zero (73%), although only a very small number of these businesses (2%) actually know the carbon footprint for the products they supply, and just 3% have a detailed carbon footprint ready for their organisation. 50% of manufacturers have started, but are yet to formally establish any metrics, and an additional 23% have so far only attained a basic carbon footprint for their organisation.

Nick Golding, managing director at SWMAS, said: “Profitability remains a challenge for most firms, particularly with the current energy crisis which is showing no signs of waning. It is understandable that for most, implementing the new net zero standard isn’t a priority with other challenges being faced, particularly when planning and implementing a scheme to neutralise their carbon footprint will cost additional time, resources and money.”

Only 37% of respondents have actually taken a pledge for their business to achieve net zero but, encouragingly, three quarters of these firms aim to reach this at least 10 years before the government’s 2050 target. On the other hand, over 70% of the firms questioned reported that the transition to net zero is not a current priority for their business.

There are still many barriers being faced by manufacturers dominating their current and future business focuses. As many as 64% do not think the benefits outweigh the cost of implementing low carbon improvements and almost half (44%) have said there is nothing driving them to prioritise net zero over other issues in the business. This is further backed up by the fact that over three quarters of responding businesses said none of their customers have asked them to provide their carbon footprint data.

How will carbon footprint credentials benefit UK manufacturers? Almost half (48%) have said they think being able to promote their net zero ambitions will help them win future work. Furthermore, 27% believe this would attract potential employees at a time when the competition for skilled workers is at an all-time high.

He added: “These findings indicate some optimism from UK manufacturers despite the ongoing challenges around price increases, supply chain disruption, and skills shortages. It’s clear that many firms see the benefits of achieving net zero, but there are a number of challenges that could be preventing their progression.

"There are lessons for policymakers to consider, particularly in relation to simplifying planning requirements for onsite energy systems such as solar and wind as well as incentives for these technologies to support the manufacturing transition towards a net zero future.”

SWMAS conducts its National Manufacturing Barometer on a quarterly basis. To see the full report for October to December 2022, surveyed in January 2023, visit: www.swmas.co.uk/knowledge/national-2022-q3.