Sector focus: becoming a sustainable SME manufacturer

This guide outlines how the UK’s 270,000 manufacturers, the vast majority of them small or medium-sized enterprises (SME), can become more sustainable.

Manufacturing (PDF, 159 KB) is the largest emitting industrial sector, generating 16% of total UK greenhouse gas emissions in 2019.

This means that if the UK is to meet its target of becoming net zero by 2050, manufacturers have a considerable part to play.

Climate change and sustainability drivers, such as consumer behaviours, could incentivise SME manufacturers to develop innovative solutions that support moves to greenhouse gas emissions the economy.

From developing renewable energy technologies to manufacturing products that capture carbon or use fewer non-renewable resources, sustainble manufacturing companies can support net zero through their decarbonisation actions and the products they make.

What are the benefits of sustainable manufacturing?

Becoming more sustainable can reduce costs and increase profits.

A survey caried out before the Covid-19 pandemic by Make UK found that sustainable manufacturing companies enjoy substantial business advantages, with 40% reporting increased profit margins and 30% increased competitiveness.

Not all manufacturers face the same net zero challenges so while some standard approaches broadly apply, such as replacing inefficient lighting and switching energy suppliers to those that use renewable energy generation, manufacturing can be complex, involving plant, materials, and processes that can be difficult to decarbonise.

An initial approach could be to examine your supply chain, use of materials, waste management and operations to identify where more sustainable systems can be introduced.

There are two broad types of sustainable activities for manufacturers to consider: sustainable opportunity activities and decarbonisation activities.

Sustainable opportunity activities

Sustainable opportunity activities are ways small manufacturers can support the wider UK in its journey to net zero.

This includes identifying needs such as developing technologies and creating products to reduce carbon emissions and move towards a low-carbon economy.

Make UK's Net Zero Roadmap outlines some of the key opportunities available for companies looking to move to sustainable manufacturing.

Enabling low-carbon energy generation

Components used in renewable and low-carbon energy technologies represent a significant opportunity for smaller businesses as part of a wider supply chain.

Glass manufacturing innovation can lead to advances in solar panels, while advanced glass fibres support longer, lighter, and more efficient rotor blades on wind turbines.

From electronics to the chemicals used in electric vehicle batteries, manufacturing activities can help support the UK's move to electric vehicles.

Resource efficiency

Demand for improved, efficient resource use in products provides opportunities.

Using scrap metal in sustainable manufacturing, reducing wastage through increasing the recyclability of textiles, and lowering food production miles are examples where more efficient resource use can support wider UK activities.

A key opportunity is through engineering, where embedding low-carbon design at scale could have a significant impact.

Built environment

Building materials and processes can help lower embodied carbon footprints and some materials – such as concrete – are 100% recyclable and naturally absorb atmospheric CO2.

Sustainable manufacturers can explore developing modular construction approaches that use lower embodied carbon footprints such as timber, or increasing the use of grey water and rainwater in building water supplies.

According to Make UK, adopting sustainable manufacturing specifications, such as updating flat glass glazing to 1.4U by 2030 would result in a 32% reduction in building energy usage.

Greening the supply chain

Reducing emissions in the cultivation and production of agricultural produce and removing chemicals from sprays used in farming can help producers downstream in the supply chain to become greener.

Other areas where sustainable manufacturers can help include digitising the supply chain and logistics to foster transport efficiencies like whole-life carbon assessments as part of procurement activities.


Transport opportunities aren't limited to metal casting, glass, and ceramics manufacture that will support creating a generation of electric vehicles (EV).

The UK will require a substantial energy infrastructure to support fleets of EVs while non-EV transport such as aerospace will need sustainable aviation fuels to replace fossil fuels.

Improving standards

Sustainable manufacturers can help introduce and promote sustainability standards throughout the supply chain.

From sustainable engineering that designs carbon emissions out of products, to encouraging recyclability of materials and products such as clothing, manufacturers can support the path to net zero through extending its standards-based approach.

Decarbonisation activities

The path to net zero isn't limited to sustainable manufacturing output.

There are plenty of changes manufacturers can make to their operations and systems.

While small manufacturers will need to tailor their decarbonisation approaches to their sector and specific needs and operations, some broader areas may be worth exploring as initial steps.

Green energy

Reducing your business' reliance on fossil fuels may be a good way to make it more sustainable.

Switching to renewable energy may significantly reduce your carbon footprint.

Contact your energy supplier and ask about switching to a green or renewable business tariff.

The big energy companies offer green tariffs, as do independent suppliers.

You could also generate your own renewable energy by installing the relevant technology depending on the type and size of your business, the amount of space you have, and your budget level.

The Carbon Trust has a guide to renewable energy, and the YouGen website has a directory of companies that specialise in renewable energy technology.

Energy efficiency

Developing good energy management practices across a business can lead to savings.

The Carbon Trust says most businesses in the UK could reduce their energy consumption by between 10% and 40% with good energy management.

It has a self-assessment tool that you can use to assess your business' performance.


Most manufacturing SMEs require a lot of lighting but it can often be overlooked as a way to reduce energy costs and consumption.

According to The Carbon Trust, over 10% of energy consumption is due to lighting for some industry sectors.

A sustainable manufacturing company might consider replacing older lighting systems with more energy-efficient LED lighting.

Heating and ventilation

Manufacturing premises often require high ceilings and good ventilation but this can lead to heat loss and energy inefficiencies.

Many manufacturers rely on 'blown air' heaters to heat large spaces with high ceilings.

If this is the case, the Carbon Trust recommends that sustainable manufacturing companies switch to radiant heaters that directly heat desks, surfaces, and other areas that need to be kept warm.

The Carbon Trust also says badly maintained boilers can use 10% more energy than those that are well maintained.

It is recommended that you carry out weekly boiler checks to identify any problems and boilers should be fully serviced as often as recommended by the manufacturer.


Reducing heat will reduce business costs so sustainable manufacturing companies should make sure that pipes, valves, and other distribution networks are fully insulated.

Other areas that should be well insulated are loft and cavity walls.

The Carbon Trust says this is "the single most cost-effective measure that can be made to the building fabric" with insulation of cavity walls reducing heat loss by up to 50%.

In addition, the organisation recommends considering installing polycarbonate secondary glazing under skylights which can also cut heat loss by 50%.

Waste management and recycling

UK manufacturers produce a significant amount of waste material with Government figures estimating that 43.9 million tonnes of commercial and industrial waste was generated in 2018.

Setting up an effective recycling process can significantly make your business more sustainable.

Next steps for sustainable manufacturers

There are a lot of opportunities for smaller manufacturers to support the UK's journey to net zero and to enact their decarbonisation change programmes.

A good first step is to understand your business's carbon emissions and energy usage.

Conducting an environmental systems management audit that assesses energy usage, supply chain, and manufacturing processes is a good place to start.

You can access a range of carbon footprint calculators and sustainability visualisation tools to begin the process of recording, measuring, and monitoring carbon emissions.

The SME Climate Change hub has free tools and information to help you get started.

Further resources for sustainable manufacturers

For further information on becoming a sustainable manufacturer, access the following resources:

• Energy Savings Trust

• The Carbon Trust

• SME Climate Hub

• British Business Bank

• Federation of Small Businesses

• British Chambers of Commerce

• Make UK

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

Green Decoder

Featuring a glossary of sustainable terms curated in partnership with the Nottingham Business School, Nottingham Trent University, our green decoder is helping smaller businesses decipher the terminology surrounding decarbonisation.

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