Most manufacturers don't know if they can hit 2030 targets

26 October 2023 Consultancy.uk 4 min. read
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With few apparent threats of a reprimand from the state, the UK’s businesses continue to drag their feet on net zero targets. A new study suggests that the majority of UK manufacturers currently ‘aren’t sure’ they will meet their 2030 goals for sustainability.

In May 2022, more than 30 companies were issued with fines by the Environment Agency, as part of efforts to reduce greenhouse gas emissions. The fines were issued for breaches of climate change schemes which are in place to help ensure the UK reaches its target of net zero emissions by 2050 – in a move Environment Agency Deputy Director for Climate Change Liz Parkes said served “as an important reminder for all organisations to ensure that they are compliant with these schemes and are playing their part in tackling climate change.”

However, the Environment Agency was only able to fine the firms because they had signed up voluntarily to the Energy Opportunity Scheme. The move entitled them to a discount on the Climate Change Levy, but also left them open to fines for failing to sufficiently reduce their energy use and CO2 emissions. Beyond measures for which firms voluntarily sign up to be policed, then, it remains unclear exactly how the UK government intends to enforce its commitments to a net zero economy – especially after the High Court ruled last year that its own net zero strategy was inadequate, and breached the Climate Change Act.

Most manufacturers don't know if they can hit 2030 targets

Source: Vendigital

Amid that regulatory uncertainty, it seems apparent that many firms do not have much of a sense of urgency for their net zero efforts. A new study from Vendigital has polled 201 board-level executives from UK-based manufacturers, and found that while 63% still insist sustainability is a ‘high priority’, the majority do not have an operational carbon reduction plan.

Only 31% said that they had a strategy to reduce CO2 emissions in place. This may be why, in spite of 70% of respondents saying they had set ‘net zero 2030 targets’, a huge 61% simply ‘aren’t sure’ that they will achieve their goals in sustainability.   

Alessandra Del Centina, managing consultant at Vendigital, commented, “Manufacturers don’t know if their sustainability strategies are deliverable. In many cases, they have targets and plans in place, but they are unsure about whether they will be achieved. This lack of certainty could be rooted in a lack of reliable data. Some may not even realise that Scope 3 emissions must be tackled to achieve net zero.”  

Most manufacturers don't know if they can hit 2030 targets

Source: Vendigital

Expanding on this to the broader economy, Vendigital suggested that 98% of businesses have net zero targets in place. But even so, four-fifths of all firms do not actually measure their Scope 1, 2 or 3 greenhouse gas emissions – making their goals abstract, and leaving no way of seeing what material progress they are actually making on them. With the clock to 2030 ticking down, and just over six years left to meet their aspirations, it is important that firms act to change that quickly.

But Vendigital’s study does not exactly inspire much confidence on that basis either. Of the business leaders the consultancy surveyed, 82% said various short term pressures had held up or affected their plans to achieve the net zero targets. So, while they have vocally made it clear sustainability and net zero drives are a priority, they have ultimately prioritised their balance sheet and profit-margins when push came to shove. This may be what leaves so many firms “unsure” they will meet their sustainability and net zero goals.

To what extent such a shrugging response will continue to be tolerated remains to be seen. After all, when governments insist companies make other changes – from how they pay tax for contract-workers, to anti-money-laundering regulations – they are generally less willing to accept the response “we’re not sure if we can manage that.”

Incumbent Prime Minister Rishi Sunak's revised priorities – including a weakening of key net zero policies, including pushing back the ban on the sale of new petrol and diesel cars in the UK – could affect UK industry’s sense of urgency around meeting carbon reduction targets. However, with a general election which looks likely to see a change of government on the cards in 2024, it is generally accepted that policy will become stricter and further regulation will come into effect sooner rather than later. This might include commercial mechanisms and affect more businesses.