UK net zero ambition needs “huge engagement” from SMEs
Small businesses are keen to play their part in the UK’s journey to reach net zero by 2050 but decarbonising is complicated and expensive.
It will be impossible to reach the UK’s net zero by 2050 goal without “huge engagement” from the UK’s 5.7 million Small to Medium Enterprises (SMEs), says Chris Hocknell, director of Eight Versa, a specialist consultancy helping companies and buildings measure and reduce their carbon footprint.
“We need to build a long-term strategy which lays strong foundations. We’re playing the long game.”
SMEs account for over 99 per cent of businesses and 50 per cent of all UK business-driven emissions. However, research done by Lloyds Bank in May found that over three-quarters of small businesses do not know how they plan to reduce their carbon over the next three years. Only 15 per cent understand how to measure their carbon footprint.
“We’ve moved past the why and onto the how”, adds Hocknell, who believes a lack of action is due to a lack of knowledge rather than a lack of good intent.
Eight Versa has noticed that many SMEs in London are determined to reduce their carbon footprint. Their desire to create sustainable change is often “much higher” than in larger companies despite fewer incentives.
Small changes
Some SMEs such as Stem & Glory have already succeeded. The vegan restaurant with multiple branches in London and Cambridge reached certified net zero status after reducing emissions by 20 per cent in under nine months.
It’s about “changing your whole mindset”, says CEO Louise Palmer-Masterton, who made many small changes to reduce their carbon footprint. Stem & Glory stopped using vegetable oil, which produces high emissions per kilogram, and turn almost everything off overnight.
Short of closing, however, there is a limit to what restaurants can do to save on energy due to hygiene considerations.
The restaurant is in a good position, with funding and lots of customers. Still, Palmer-Masterton is concerned about energy prices over the coming months. “It’s complete madness out there right now”, she sighs, “if there aren’t more interventions, and ones that make a difference, no one’s going to survive.”
Decarbonising to grow business
Restaurants are not the only businesses striving for greater sustainability. Professional services provider, Gemserv, is accredited Carbon Neutral and has been on a journey to net zero since 2007.
CEO Alex Goody says they have reaped the rewards of practicing what they preach. “What is clear is that being Carbon Neutral is important in attracting staff, and winning business in key areas across the energy industry and with low carbon technologies.”
According to a 2019 YouGov study of over 9000 consumers, 67 per cent were more likely to choose a product or service from a business that is trying to mitigate their environmental impact.
Gemserv aims to be net zero by 2030 through investments in carbon removal projects and increased efforts to improve energy efficiency.
Examples include using LED lightbulbs, a smart lighting system, electricity sub metering to better monitor our energy, solar reflective film on windows and recycling 100 per cent of office waste.
Goody believes it is “essential” that organisations reduce their carbon footprint because the benefits outweigh the money and effort the transition takes. “It has become a hygiene factor to operate your business and for large energy and water users it’s an important operational efficiency.”
Whilst eager to decarbonise, some SMEs feel there is insufficient support and infrastructure in place to allow them to do so.
Matthew Evans, director of markets for trade association techUK, thinks businesses should receive more help switching to new technology. “Digital technology has been proven to reduce costs”, he says, “however, small businesses often do not have the resources to invest and scale to deliver lower emissions or reach net zero.”
Evans believes the Government needs to work closer with industry to “provide them with the investments and resources they need” to undertake the financial risks and labour associated with decarbonisation.