West Midlands manufacturers to focus on ESG compliance and cashflow management in 2026
West Midlands manufacturers will be focussing on sustainability and environmental, social and corporate governance compliance as well as making fresh investments in skills during 2026, according to a newly published report.
More than a quarter (29 per cent) of senior decision makers said they expected their boards to be centred on these key areas.
The data is contained in the latest Manufacturing Agenda report published by business advisory firm FRP.
Other findings from the survey say executives will be prioritising managing cashflow or working capital pressure (28 per cent) and navigating new regulatory (27 per cent) or geopolitical risks (27 per cent).
This follows a year where they have been focused on managing geopolitical friction or trade change (34 per cent), margin squeezes or unplanned cost spikes (32 per cent) and the sudden loss of key orders or customers (29 per cent).
Reflecting their operational priorities, West Midlands manufacturers are planning fresh investments for the year ahead, prioritising those that address skill and talent needs (41 per cent) and support sustainability, ESG (environmental, social and corporate governance) compliance or decarbonisation efforts (36 per cent). FRP said lenders and investors shared many of the same 2026 focus areas as boards.
When asked what would prompt them to intervene in a portfolio company over the next 12 months, lenders and investors cited cost, cashflow and working capital (44 per cent), investment, automation and digital execution (41 per cent) and leadership resilience (37 per cent).
Raj Mittal, restructuring advisory partner at FRP in Birmingham, said: "West Midlands manufacturing management teams are gearing up to tackle major, structural challenges, like ESG compliance, that will help them build lasting value.
"This reflects the fact that manufacturing resilience is no longer purely defined by financial strength - it's about the ability to identify and proactively meet capability gaps and staying abreast of ever-evolving regulation.
"As firms enter the new year, it will be important they keep considering the lender perspective and seek the right advisory support to help bridge any gaps.
"Firms' attention to working capital and cashflow will be a very good thing from a lender perspective and will help unlock further financial backing to support manufacturers' ambitious growth plans."
