Net zero no longer a priority for SMEs
The majority of small and medium-sized firms (SMEs) have sidelined net zero practices, according to a survey of around 500 business owners, in signs that net zero policies are increasingly falling out of fashion.
President Donald Trump’s abandonment of Biden-era green policies has driven a global trend that is seeing firms and governments move away from prioritising climate change.
Now this survey appears to suggest that UK firms are following suit as higher cost pressures bite.
More than half of business owners have deprioritised green practices in the last year, according to the research – from the technology firm Bionic.
The Labour government has put green investment at the heart of its mission to deliver growth, while opposition leader Kemi Badenoch suggested that reaching net zero carbon by 2050 was “impossible”.
There have been some signs of flexibility from the government as it relaxed electric car sale rules in the wake of Trump’s sweeping tariffs.
A ban on the sale of hybrid vehicles, which combine petrol or diesel-powered engine with electric motors, has been postponed until 2035, while it has been suggested that further net zero policies could be watered down.
Energy secretary Ed Miliband has backed Labour’s commitment to net zero while the Confederation of British Industry (CBI) suggested last month that the sector was growing at a higher pace than other areas of the UK economy.
Several economists including Sir Dieter Helm, a professor at Oxford University, have wanted that the costs of net zero policies could be larger than many expect.
The apparent fall in appetite for green practices among small and medium sized business has coincided with large increases in costs brought by higher taxes and utility bills.
A quarter of small business owners surveyed had ranked high energy costs as a key problem, while nearly a third believe higher national insurance contributions (NICs) will add strains to their budgets.
The majority of firms surveyed suggested they were planning to introduce artificial intelligence tools.
The Office for National Statistics last week said that nearly a fifth of UK firms were already using AI, though many firms were not set to newly adopt the technology between April and June.