UK manufacturers embrace resource efficiency but reject eco-design

Peta Hodge

10th March 2010

Despite their greater commitment to resource efficiency, UK manufacturers – particularly SMEs – are reluctant to invest in ‘eco-design’ to reduce the environmental impact of their products.

This was a key finding from the latest survey of the sector’s environmental performance by the manufacturers’ organisation, EEF.

The survey of nearly 300 manufacturing companies across the UK, suggests that resource efficiency – particularly recycling, reduction of business waste and energy efficiency – is now embedded in the sector, with around 90 per cent of respondents having taken some sort of action in these areas.

Cost main driver for resource efficiency

Four in every five companies cited cost savings as the main driver behind improving their environmental performance.

However, the survey found the take–up of eco-design – which focuses on reducing the ‘whole-life’ environmental impact of the product from raw material acquisition, through production and finally to recycling and disposal – to be “disappointing”.

Size matters in this respect. Almost three quarters of the largest companies (employing more than 500 staff) have introduced, or are planning to introduce, eco-design strategies. Whereas a mere 34 per cent of the smallest companies have similar plans.

Two-thirds of manufacturers not planning to adopt eco-design

Indeed, overall, two-thirds of firms say they have not adopted, or are not planning to adopt, an eco-design strategy.

This is despite the fact that the EEF says the move to eco-design has been well-supported by legislation and promotion and would allow manufacturers to tap in to a growing market for resource efficiency products worth an estimated £75 billion.

There are other benefits too – like reduced operating costs through the use of fewer raw materials and the prospect of developing longer-term relationships with customers by producing products with a good capacity for repair.

However, the EEF’s report acknowledges there are good reasons why manufacturers might be reluctant to embrace eco-design techniques – for example, such methods are not necessarily generic and immediately applicable, but often need customisation.

In addition, the EEF recognises that reducing the environmental impact of a product’s development has to be balanced against a wide range of other factors, including retaining the product’s functionality and aesthetic appeal.

Level of investment in eco-design main barrier to adoption

As with other environmental strategies, the EEF found that a major barrier to take-up of eco-design is the level of investment required.

Overall, nearly two-thirds of firms said that the impact on cash flow or profit margins was a barrier to improving their environmental performance – an increase of 12 per cent on last year’s survey.

According to EEF this is where the Government can and must do more to help.

Head of climate and environmental policy, Gareth Stace said: “Businesses especially SMEs need further support to implement improvement strategies. There is a clear role for Government here in making business aware of easily attainable ‘quick wins’ as well as those areas that require investment such as eco-design.

“This can be achieved by providing clear and targeted information to organisations. If organisations are provided with clear information on the business benefits of adopting environmental measures, they are likely to adopt them without being pressured to do so.”

20 per cent of manufacturers don't know if CRC applies to them

One slightly worrying statistic from the survey: with the introduction of the CRC Energy Efficiency Scheme less than a month away, 20 per cent of those surveyed said they did not know whether the new rules applied to them or not.

This is an issue that employers groups like the EEF and the CBI have been campaigning on for some time, warning that many of the 5,000 or so organisations expected to be covered by the CRC are still unaware of their obligations and could be hit with fines of up to £5,000 for failing to register.