Manufacturers should adopt resource efficient production to combat recession

Turning to sustainable resources management will also assist in preparing businesses for an increasingly regulated post-recession economy.

Manufacturers are missing out on the opportunity to make far more efficient use of environmental resources to both achieve greater cost savings and prepare for an increasingly regulated environmental landscape, according to a major report released today by EEF, the Manufacturers Organisation in conjunction with Barclays Commercial Bank.

The report Resource Efficiency; Business benefits from sustainable resource management identifies and analyses the positive effects of resource efficiency in UK manufacturing and outlines major benefits and opportunities for companies. It promotes a greater understanding of sustainable manufacturing, offering a handbook of practical solutions applicable for a wide range of factory environments.

The report is the first in a series of publications being launched by EEF as part of their Manufacturing Your Future campaign which is offering British Manufacturers advice, guidance and support to help them through the economic downturn.

Commenting on the report, Vanessa Fandrich, EEFs Senior Climate and Environment Policy Adviser said:

Many companies underestimate the true cost of inefficient business processes because of a lack of understanding of environmental costs. Behaviour change is often a first step towards realising considerable savings. However, in some instances doing things differently will require more significant investment and market forces alone may not be enough to provide for the necessary change.

The government must set out clear objectives and timescales for sustainable resource management as part of its low carbon strategy, which businesses can use to plan their operations strategically.

Ray ODonoghue, Head of Midlands Region, Barclays Commercial Bank, added: While environmentalism has traditionally been considered a back seat issue during a recession, the strong correlation between resource efficiency and cost control should be pushing energy use and waste management much further up the corporate agenda.

The report suggests that more than reducing costs, successful resource efficiency increases the utility of materials, energy and water throughout the life of products and services. It can also ensure more cost effective compliance with existing and, more importantly, incoming legislation, while promoting competitiveness through product differentiation and an enhanced corporate reputation.

Ray ODonoghue continues: With both US and Australian leadership now signed up to the fight against climate change and a new international climate change agreement likely to be signed in Copenhagen in December, sustainable resource use will eventually replace battling recession as the top issue for manufacturing leaders. For any industrial company that has the capacity to look beyond day to day business issues despite economic challenges, the time to start acting on resource efficiency is now.

The report highlights the urgency of implementing resource efficiency, with recent fluctuations in energy and raw material prices, heightened consumer awareness of climate change and new government sanctions all adding to this urgency. The report outlines the potential for sustainable development if government continues to work with the private sector to encourage greater investment in recycling, renewable energy and production, and offers practical steps for manufacturers to boost the resource efficient credentials.

It concludes that manufacturing companies taking the lead on implementing a resource efficient business model can also benefit from increased competitive advantage through being differentiated from business rivals and gaining access to new markets, improved access to capital and contracts by appealing more to investors, and reduced risk through compliance with legislation. A closer relationship with suppliers may also be forged off of the back of a resource efficiency programme, also leading to a reduced risk of supply chain failures.
To achieve the goals set out in the report, government, in partnership with industry, should seek to provide:

o        a long-term strategy for resource management with clear objectives and timescales
o        a regulatory framework that is risk-based, proportionate and coherent and incentivises resource efficiency
o        the necessary infrastructure for a closed loop economy, providing easy access to recycling services as well as access to secondary raw materials
o        targeted advice and support for businesses to helping manufacturers identify and implement resource efficiency activities
o        a more creative approach to government procurement to encourage resource efficiency down the supply chain.

The report is intended as a practical handbook for all companies considering the demands of the current and future external environment. It is directly available to UK companies from the EEF and can be downloaded from www.eef.org.uk.