The report which assesses the progress, opportunities and challenges faced by UK manufacturing firms looking to improve their ESG strategies, found that two thirds of manufacturers (61%) said that they expected to expand the scale of their ESG strategy in the next two years.
Among the reasons cited by companies for becoming more focused on ESG were increasing pressures from the labour market, government, investors, and customers. More than three quarters (77%) of firms are receiving ESG conditions or targets from their customers.
However, the report found that just 48% of companies said that they have the resources required, highlighting a need for greater support for those companies. In addition, only one in four (27%) companies being asked meet ESG requirements by their customers are getting support from them to do so.
The report also revealed that businesses are accelerating the ESG requirements of their suppliers. Three-quarters (74%) of firms have built ESG conditions into their procurement strategies, up from two thirds (66%) just two years ago. Yet, four in ten (45%) are not aware of their suppliers’ performance against their targets.
While one third (35%) of manufacturers provide ESG support to their suppliers, UK manufacturing firms are two and a half times more likely to provide support to suppliers in pursuit of ESG targets than they are to receive it from their customers.
The findings suggest that ESG is rapidly rising up the boardroom agenda and is set to provide companies with a competitive advantage.
ESG transition plan disclosures are set to become mandatory for many UK companies later this year.
