Energy and CO2 'top priority' for industry
Two-thirds of UK manufacturers say that cutting CO2 emissions and saving energy will be a top priority over the next five years, with costs rather than legislation driving efficiencies
The latest survey of EEF members reveals that more than 70% have set environmental targets exceeding those required by legislation, with resource costs and meeting the demands of internal environmental management systems revealed to be the most important motivating forces.
Environment regulation came third in the list of top drivers, followed by gaining a competitive advantage over competitors and brand reputation.
The survey reveals that close to 80% of manufacturing firms have targets on managing energy and cutting waste, with just under half targeting water use and one-third carbon emissions.
When questioned about existing environmental legislation, around two-thirds of manufacturers agree that the financial and administrative burden of compliance had increased over the past two years, with 74% of small and medium-sized businesses saying they have to dedicate more time on compliance now than in the past.
The Carbon Reduction Commitment Energy Efficiency (CRC) scheme in particular came under fire for being “overly complicated” and close to half of those surveyed said it provided “little or no incentive to improve environmental impacts”.
In its report, “Managing green and growth”, the EEF calls on the government to undertake a comprehensive review of environmental taxes and regulation before the next comprehensive spending review, warning that with manufacturers subject to a diverse and increasing range of legislation, the administrative “burden” could hamper companies’ efforts to cut their impacts.
“The government’s own policies are failing to match industry’s own ambitions with a confused and cluttered landscape adding to the cost burdens rather than driving investment,” argued EEF chief executive Terry Scuoler.
“We need a simpler and more coherent approach to climate change with a full review of the current set of tax and regulation measures.”
The EEF proposes the introduction of a new “stress test” for legislation, which would see the government to assess all proposed pieces of legislation in terms of their potential impacts on economic growth alongside their environment benefits. The EEF argues that the government’s vision of a green and growing economy will only work if it adopts cost-effective policy measures.
“Government must now learn from manufacturers’ own efforts and develop policies which work with the grain of industry, rather than against it,” commented Scuoler.
The report argues in favour of aligning and streamlining the various requirements on businesses to report their greenhouse-gas emissions, proposing a broader use of climate change agreements (CCAs) and removing manufacturing firms with CCAs from the CRC.
The survey also offers insights into how UK manufacturers are working to manage their environmental impacts. Increased monitoring of resource use is the most frequently take action, with more than 60% of firms confirming they have upped checks on their water and energy use, and close to 80% on their waste output.
Upgrading equipment is also popular, particularly to save energy and reduce waste, with close to 90% of firms confirming that they were either considering upgrades or had already updated equipment to improve energy efficiency.
Lean manufacturing techniques and increased employee training are seen as important in reducing waste, and are being applied by more than half of the companies surveyed. Meanwhile, 40% of firms have redesigned, or are planning to redesign, their products to cut waste and energy use, but this drops to around 20% when looking at water use.
The report also reveals an increase in senior management level responsibility for compliance with close to 80% of firms confirming a senior manager is involved in ensuring their firms comply with regulations, compared to just over 60% two years ago.
A similar increase was seen in the number of firms whose management monitor environmental performance against set key performance indicators (more than 60% in 2012, compared to around 40% in 2010).
However, pressure on managers’ time is revealed as the biggest barrier to the achievement of environmental objectives (cited by more than 55% of those surveyed), followed by lack of resources and the impact of environmentally focused projects on profit margins or cash flow.
Employee engagement was listed as a barrier by close to 40% of manufacturers and, more worryingly, one-third of firms said that a lack of expertise in-house was stopping them from meeting their environmental objectives.