C-suite knowledge gaps threaten progress to net zero

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C-suite executives at UK-based manufacturing companies could undermine progress to net zero because they lack an end-to-end understanding of their carbon emissions, research has found.

Image by Gerd Altmann from Pixabay

Research conducted by Vendigital with 152 C-Suite executives found that 74 per cent would like to know more about their carbon footprint, indicating that their current knowledge is incomplete.

Dominic Tribe, director at management consultancy, Vendigital, said: “While many manufacturers understand the importance of reducing carbon emissions in areas such as transportation and logistics, relatively few have a handle on their operating emissions and even more so the cumulative carbon footprint of their bought in parts and raw materials from their supply chain.


“Without access to reliable emissions data, businesses are unable to accurately monitor and improve their environmental performance, which could impact their competitiveness in the future.”

The research showed that despite the gap in knowledge about carbon emissions, business leaders do understand the case for decarbonisation. The top four reasons given for wanting to know more about their company’s carbon footprint were to do the right thing; strengthen customer and investor relationships; enhance enterprise value and become more attractive as an employer.

Despite this, the research found low levels of investment in some areas; over a third of C-suite executives have yet to appoint a head of sustainability or ESG (35 per cent) or implement a green sourcing strategy (34 per cent).

“The lack of investment is concerning when you consider that decarbonisation initiatives can take many years to implement, and even longer to deliver a cost benefit. Without immediate action, UK manufacturers could lose ground in the race to net zero”, Tribe said in a statement.

According to the research, respondents are concerned about committing capital expenditure into decarbonisation strategies without any certainty of commercial rewards. The need to balance cost and rewards is also evident in how far C-Suite executives are prepared to go in prioritising decarbonisation; 69 per cent said they would only adopt a net zero-led sourcing strategy if it delivered a net cost benefit.

Most manufacturers are, however, aware that demand for greener products and operating processes is becoming more prevalent across the supply chain. 80 per cent of manufacturers believe that sustainability/ESG performance has a direct impact on customers’ buying decisions and 20 per cent confirmed that new customers ask about a product’s carbon footprint before making a purchase.

Encouraged by the shift to net zero sourcing, 98 per cent of C-suite executives confirmed that they are planning to invest in decarbonisation strategies in the year ahead. The top five investments they are planning to make are signing up the UN’s Race to Net Zero initiative; adopting a green sourcing strategy; switching to green processes; appointing a new head of sustainability and investing in carbon emissions measurement.

“Manufacturers are facing a major challenge to decarbonise their products and operations in a short timeframe and significant investment will be needed,” said Tribe. “They need to find ways to take cost out and invest strategically to ensure they remain both commercially and environmentally competitive.”