Posted: Thu 29th Jul 2021
Banks and the government must ensure small companies are "not forgotten or left behind" in the transition to net zero and are supported with financial incentives and high quality information.
That's the claim of a new report by Banks for Net Zero which warned that 99% of British businesses are likely to be unprepared for carbon reduction policy and regulation.
The UK has a target to reach zero carbon emissions by 2050 but the group, which has banking members including Barclays, Handelsbanken, Tide and Triodos, said the government's focus so far has been on big companies and the highest carbon emitters even though any new policies will affect every company in the UK.
It warned that if SMEs, which account for 99% of British firms, are neglected, one in four workers and 52% of the UK’s turnover could be left behind in the race to net zero.
The report called for incentives for smaller businesses that are making net zero a priority. That could include offering “green” financial products and services that reward businesses invest in decarbonising their operations with lower interest rates and lowering taxes with business rates relief linked to carbon footprint or enhanced capital allowances for investments in decarbonisation.
Access to high quality and trustworthy information is also needed, the study said. Although services already exist, such as the government's UK Business Climate Hub website, a survey by the Carbon Trust found that 71% of SMEs could not recommend a single web source for help on getting to net zero.
Small businesses need advice on how to measure their carbon footprint, reduce it and finance the necessary investments, Bankers for Net Zero said, while there should also be a strong emphasis on peer-to-peer learning with business owners coming together to learn from each other.
The report's final recommendation was the standardisation of approaches to measurement and reporting of progress towards net zero, so that access to green government schemes or green finance is not hindered by excessively complexity reporting requirements.
Louise Kjellerup Roper, CEO of Volans and Bankers for Net Zero founding partner, said: "This is a golden opportunity to take what has been an extremely difficult year for our country’s SMEs and turn it into something positive.
"We need to help them come through the COVID-19 crisis as greener and more sustainable businesses, complying with increasing regulation and responding to growing consumer demand for action on the climate crisis.
"It will be a win-win for businesses and the environment. No SME should be forgotten or left behind in the UK’s transition to net zero. We will not get to net zero as a country without SMEs taking action now."
Later this year, Enterprise Nation will launch a new initiative providing detailed and practical advice on how small businesses can reduce their carbon footprint.
What are you doing to reduce the impact of your business on the environment? We'd love to know! Email us. If you're an Enterprise Nation member [sign up for free], you can also join the Green Businesses group to connect and share sustainability ideas.