As manufacturers face growing demands from suppliers, customers, regulators and employees to reduce carbon emissions, many are unsure where to start. Here are some straightforward and affordable quick wins to help you begin.
Net Zero is a hot topic, with governments, businesses and environmental groups championing its importance. However, many small businesses still grapple with understanding how this ambitious goal impacts their operations, both now and in the future.
As we edge closer to the target dates, achieving Net Zero becomes more urgent. Yet, the disconnect between SME awareness and the reductions needed highlights the need for practical guidance.
What is Net Zero?
Net Zero is a goal aimed at drastically reducing carbon emissions to as close to zero as possible. This involves switching to cleaner energy sources like wind, solar or tidal, and changing how we operate to minimise waste and pollution.
The UK led the way by being the first major economy to set a legally binding target to bring all greenhouse gas emissions (carbon dioxide, methane, nitrous oxide, water vapour and fluorinated gases) to zero by 2050, compared to 1990 levels.
This commitment includes hitting interim targets, such as slashing emissions by at least 68% by 2030 and 78% by 2035. With less than six years left until 2030, the time for action is now.
Scope Emissions
Understanding the different scope emissions – Scope 1, 2, 3, and emerging Scope 4 – is crucial for those looking to cut their carbon footprint.
Scope 1 emissions are direct emissions your company generates by operating assets it owns or controls, such as running boilers, machinery, vehicles (if not electrically powered) and heating buildings.
Scope 2 emissions are indirect emissions associated with the production of energy your company uses. These emissions may occur offsite where the utilities are generated but are still tied to your company’s operations.
Scope 3 emissions are indirect emissions that occur as a result of your company’s activities but not from sources owned or directly controlled by you. These cover both upstream and downstream activities, including the supply chain, business travel, employee commuting, and the use and disposal of your products.
Scope 4 emissions are a new voluntary measure to describe ‘avoided emissions.’ Also called ‘climate positive’ or ‘net positive,’ it refers to the carbon savings created through using your product. Examples include low-temperature detergents, water-saving fixtures, sustainable building materials and energy-saving devices.
Of the four categories, Scope 3 emissions are the hardest to tackle, yet often account for the largest share of a company’s carbon footprint. For example, Scope 3 emissions linked to driving its vehicles account for more than 95% of Volvo’s total emissions.
While Scope 3 emissions present significant challenges, they also offer substantial opportunities for innovation, collaboration, cost savings and market leadership. Additionally, those who proactively address their Scope 3 emissions, along with Scope 1 and Scope 2, will be better prepared to comply with increasingly strict carbon regulations.
Quick Wins to Cut Carbon Emissions
At a recent Monthly Industry Meet-up, Nigel Addison-Evans from Control Energy Costs shared practical steps that manufacturers can immediately take to reduce carbon emissions in their operations.
- Get a baseline – Establishing a baseline is essential for tracking progress and setting goals. Without a starting point, it’s almost impossible to measure improvements or determine if targets have been met. Use free carbon calculators to help identify hotspots and set realistic carbon reduction targets, even if their formulas aren’t 100% accurate.
- Energy Consumption – Switching from brown to green energy sources offers one of the quickest and easiest wins for manufacturers. This switch not only reduces energy spend but also slashes carbon emissions. Moreover, it can usually be done at no additional expense. Looking ahead, investments in heat recovery systems, on-site energy generation, water collection systems and transitioning company vehicles to full battery electric or hybrid models can deliver further carbon reductions.
- Three R’s (Reduce, Reuse, Recycle) – While reducing paper use and introducing recycling bins are important, manufacturers should pay particular attention to packaging. Packaging materials are extensively used for inbound parts and outbound finished goods. Ensuring packaging materials are recyclable and establishing robust recycling processes are critical steps, as is engaging with packaging suppliers to explore the use of more sustainable materials.
- Equipment Efficiency – The cheapest and greenest energy is the energy you don’t use, and maximising how machines run leads to lower power consumption. Regular maintenance ensures machinery operates efficiently and uses less energy. Although modern equipment is often more energy-efficient than older models, upgrading machinery may require a significant upfront investment. However, the long-term benefits, including reduced emissions and new capabilities, can outweigh the costs.
- Leverage Technology – Using digital systems to go paperless, spot production errors faster, streamline processes and monitor machines can boost efficiency and help identify opportunities for further emissions reductions.
- Staff Training – People are the driving force behind any transformation, and behaviour change can deliver significant improvements. Encouraging behaviour change and empowering employees to take simple actions, like turning off idle equipment, can yield substantial energy savings over time.
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Carbon Emissions – a Priority for SMEs?
In the UK, reporting on Scope 1 and Scope 2 emissions is mandatory for businesses that meet two or more of the following criteria:
- More than 250 employees
- Annual turnover greater than £36m
- Balance sheet assets greater than £18m.
While Scope 3 reporting remains voluntary, it is highly recommended. Companies that report their Scope 3 emissions provide a more comprehensive view of their carbon footprint and demonstrate their commitment to sustainability.
Small companies are not legally required to report their carbon emissions, which can leave directors questioning the importance of doing so. During an engaging discussion with Members following his presentation, Nigel explained why ignoring emissions reporting can carry both short- and long-term consequences.
For SMEs, failing to report emissions will likely carry reputational costs more than financial ones, at least initially, Nigel noted; “Your market standing is impacted by how stakeholders – customers, investors and partners – view your commitment to sustainability. As more sectors expect carbon reduction commitments, the financial costs will follow.
“For example, many large companies now require their suppliers to adhere to strict environmental standards. If you can’t meet these standards or show a willingness to improve, you may find yourself excluded from lucrative opportunities.
“Additionally, chances are you supply or buy from a large organisation and your data becomes critical to their reporting and compliance. They will be coming to you for information needed for their Scope 3 reporting.”
Nigel also highlighted the importance of sustainability concerns to staff; “The environment is a key priority for the workers of tomorrow, as well as today.
“People are increasingly choosing to join organisations with strong sustainability commitments backed up with actions. Focusing on reducing your carbon footprint will help you attract and retain workers passionate about making a positive impact.”
Nigel concluded with practical advice; "Start small but think big. Even minor changes can lead to significant long-term benefits. Engage with your suppliers and customers to build a sustainable supply chain. By demonstrating a commitment to reducing emissions, you not only enhance your market position but also prepare for future regulatory requirements and market shifts.
"Ultimately, taking action on carbon emissions is not just about compliance or avoiding penalties; it's about securing your future in a rapidly changing world. Embrace sustainability as a core part of your strategy, and you will likely find that it leads to both environmental and economic gains.”
Join our Next Monthly Industry Meetup!
The opportunity to openly discuss challenges, opportunities and solutions is what makes the Made in Group’s Monthly Industry Meetups so invaluable.
During these captivating virtual events, industry experts, thought leaders, and professionals gather to share knowledge, insights and best practices.
The goal is to foster collaboration, inspire innovation, and drive growth within the manufacturing community.
Each month, we feature three engaging talks from Made Members, focusing on best practices around key themes that shape the future of manufacturing, including Global Trade, People & Skills, Future Factories, and Sustainability.
Presentations are followed by interactive Discussion Groups. These virtual roundtables enable Members to exchange ideas and gain further insights on their chosen topic.
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