Top four sustainable manufacturing barriers and how to overcome them

While many acknowledge the drivers for sustainable transformation, the efforts of companies are being undermined by a number of common barriers.

Embracing sustainable manufacturing business practices has swiftly climbed boardroom agendas to become a strategic focus for all companies across all industries. Greater scrutiny from investors, customers and employees, coupled with strict new regulations, has led to more and more organisations recognising the environmental, social and financial benefits of sustainability.

That is especially true for manufacturers who face moral and practical reasons to act on climate change. Moral because manufacturing accounts for around 20% of global carbon emissions and consumes more than half the world’s energy sources. Practical because manufacturers, as well as being key drivers of research and innovation, also hold enormous influence over their operations and globe-spanning supply chains.

This influence is essential to enact the scale of transformation needed across every aspect of production – from material extraction and design through manufacturing to use and disposal – and doing so fast enough to meet the 2030 deadline.

Sustainable manufacturing development goals

Many will be familiar with the UK’s legally-binding target to bring all greenhouse gas emissions to net zero by 2050. Part of achieving that involves hitting interim targets, also enshrined in law, to reduce emissions by at least 68% by 2030 and 78% by 2035 compared to 1990 levels.

With less than seven years remaining until 2030, the time for action is now. Fortunately, more than two-thirds of UK manufacturing companies (69%) are exploring and implementing ways to become more environmentally sustainable (2022 Manufacturing Agility Assessment, HSO and The Manufacturer).

While progress is being made, it’s clear that for every business working to improve operational efficiency and reduce energy consumption, another is unsure where to start or doesn’t recognise the need to change.

A similarly large number will have taken a first step like switching to LED lighting, going paperless, or turning off equipment when not in use but are now unsure what to tackle next or how. There is also a substantial gap between the progress made by large organisations and small businesses, with SMEs needing much greater support to make the transition.

Manufacturing organizations are always on the lookout for ways to grow, and two of the biggest opportunities on their radar are digital technology and sustainability. Investors, customers, and regulators expect action in the face of climate change, and making it central to their brand’s purpose is a vital step.

If this sounds familiar, here are four common barriers to achieving sustainable manufacturing and, more importantly, how businesses can overcome them.

1. Lack of understanding

Sustainable manufacturing encompasses a broad range of terms and concepts, several of which are often mistakenly used interchangeably. Being carbon neutral is not the same as reaching net zero, for example, despite both focusing on reducing emissions.

According to the World Economic Forum, carbon neutral:

  • Covers a defined part of a business, typically direct operations (Scope 1 and 2 – see below)
  • Accounts for carbon emissions
  • Includes the use of carbon offsetting, such as through planting new trees or investing in renewable energy projects, to balance carbon footprints

Net zero, however,

  • Covers the whole supply chain, from material extraction to end-of-life (Scope 1, 2 and 3 – see below)
  • Accounts for emissions of all six greenhouse gases (GHG)
  • Offsetting is seen as a last resort

Understanding the differences makes it easy to see how carbon neutrality and net zero are milestones along the same journey rather than competing destinations.

Another concept creating confusion is that of Scopes 1, 2 and 3 emissions, which form the basis for most greenhouse gas reporting.

What are scope 1, 2 and 3 emissions?

  • Scope 1 – Direct greenhouse gas emissions created by your activities, for example running boilers, generators and vehicles (if not electrically powered)
  • Scope 2 – Indirect emissions from your consumption of electricity, heating or cooling
  • Scope 3 – Indirect emissions from all other activities businesses are engaged in. By far the largest category, this covers all parts of your value stream – upstream and downstream. Upstream examples include supply chain, business travel and waste disposal; downstream examples include transportation and distribution, use of sold products and end-of-life disposal and/or treatment.

Large companies have been required to report publicly on their direct energy use and carbon emissions since 2019. These disclosures are set to become mandatory for all UK businesses, which includes SMEs, by 2025.

Compulsory reporting is not yet in place for most Scope 3 emissions, but many businesses are choosing to get ahead of future requirements by getting a handle on them now.

TOP TIP:

The British Business Bank has created a comprehensive jargon-busting Green Decoder to help businesses decipher the terminology surrounding decarbonisation.

The Greenhouse Gas Protocol website is a good starting point for general guidance around Scopes 1, 2 and 3 and information on progress towards a global standardized reporting framework.  

2. Lack of finance

Cost pressures have stretched the wallets of manufacturing businesses like never before. The sector continues to face inflated prices for raw materials and components, labour, energy, fuel and transportation. Such challenging economic conditions present a serious blocker for sustainability and could see initiatives paused or cut back as a result.

While sustainability targets remain a priority, and companies are better grasping the cost-saving as well as planet-saving benefits, the reality is that going green can quickly become expensive. This is especially true once the mostly affordable, sometimes free low-hanging fruit has been picked.

Yet, making positive changes can also help boost bottom lines. For example, energy use and raw materials are typically the largest contributors to a manufacturer’s direct emissions.

The high cost of energy and materials currently means reducing the amount used not only contributes to sustainability goals but also saves money. Money that could be invested in upgrading or replacing machines with efficient new models, mounting a solar panel installation or switching fleets to electric vehicles.

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The urgency surrounding climate change leads many to focus on making dramatic changes at the expense of far easier and quicker to achieve small wins like insulating pipes, buildings and equipment.

It’s also worth noting that ‘reducing’ is often significantly more affordable than ‘replacing’. Take compressed air, something three in four manufacturers use for some aspect of their operations.

Research estimates that compressed air accounts for 10% of all industrial electricity consumption globally. Yet, as much as 20 to 30% of compressor output is wasted due to leaks. Even a tiny leak can add thousands of pounds a year to your energy bill.

A compressed air system audit can identify leaks, improperly sized or configured piping and malfunctioning or outdated equipment to help improve efficiency. Similarly, an energy audit will provide a clear picture current energy usage and pinpoint where energy is being wasted. 

3. Lack of expertise

Climate pledges will only translate into progress if the skills and know-how is available to do so. The pace at which sustainability initiatives are moving makes it hard to know exactly what skills, knowledge and competencies will be needed. However, they will likely span five key domains:

  • Climate and Environmental Science
  • Measurement, Accounting and Reporting
  • Energy, Water and Emissions Management
  • Systems Thinking and Circularity
  • Governance, Law and Policy

Currently, the manufacturing sector faces an acute shortage of skilled workers, both generally and for sustainability-related roles specifically. Furthermore, this shortage disproportionately affects small and medium-sized businesses, which account for more than 95% of the sector. SMEs are also far less likely to have a dedicated sustainability professional or team, instead adding these responsibilities to existing roles.

Watch our Smart Factory of the Future video series

In this series, we explore the five key areas that help the manufacturing industry drive down production costs while driving market productivity levels and competitiveness.

Watch here

Address the shortage

Addressing this shortage at the scale and speed required will likely be achieved through a combination of:

  • Upskilling existing workers who already possess a deep understanding of an organisation’s operations and processes
  • Partnering with external agencies like universities and service or technology providers with specific domain expertise
  • Attracting and recruiting sustainability-fluent candidates for new roles

TOP TIP:

Businesses should aim to provide basic training for all employees so they understand what sustainability is, why it's important and how their actions contribute to company targets. Identify those passionate about climate action and interested in moving to a sustainability-focused role, and provide appropriate training to make such a move.

Longer term, manufacturers must work in partnership with policymakers, either directly or via trade bodies, to ensure the sustainability talent pipeline of the future aligns with the needs of industry.

4. Lack of appropriate systems

The first sustainability step any company should take is to establish a carbon footprint baseline. After all, what gets measured gets managed. Most manufacturers already measure their direct energy usage and fuel consumption, but accounting for indirect value chain emissions remains challenging.

This is an area where technology, particularly automation, cloud computing and data analytics, can prove to be a powerful partner. Automating manual processes enables companies to easily record, report and understand their environmental impact. Moreover, unifying data provides the visibility and transparency needed to monitor, manage and, ultimately, reduce emissions across complex manufacturing chains.

Yet, despite many looking to become data-driven, manufacturers still heavily rely on manual workflows and legacy IT systems to get tasks done. Research shows that engineers spend between 20 and 30% of their time searching for information to do their job effectively.

A large part of the problem is information spread over numerous disconnected and siloed systems, which often leads inaccessible, outdated or underutilised data. This has serious implications for sustainability initiatives because companies may be taking actions based on inaccurate assessments.

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