The majority of UK SMEs recognise the importance of achieving net zero but action is being held back by cost pressures and lack of clarity.
That’s according to the latest BSI annual Net Zero Barometer that found progress towards a sustainable world risks being held back as UK businesses grapple with increasing costs and a lack of clarity around a credible path to net zero, despite a tripling of awareness of the importance of reducing emissions and the potential commercial opportunity amongst SMEs.
The report found that awareness of the importance of achieving net zero targets has almost tripled to 82 per cent in two years, highlighting the opportunity for organisations to partner across their supply chains to accelerate progress.
With many SMEs now also identifying the resulting cost benefits as a major reason to increase efforts in this area, it also suggests there’s a competitive edge to be gained by those that collaborate to pursue their net zero goals.
Currently, only a third of SMEs are extremely confident as to how to reach net zero, suggesting more clarity about doing so is needed. The report recommends that SMEs:
Shift their culture to approach decarbonising as a commercial opportunity drawing on guidance like the ISO Net Zero Guidelines and standards for meaningful measurement and setting an action led strategy
Plot a course and chart the journey – Only 20 per cent of SMEs are currently measuring progress in a standardised way, but setting and sharing interim milestones can help build consumer trust and credibility
Collaborate with other organisations to build a sustainable supply chain, given that for a third of SME leaders this is their biggest barrier
Become a trusted supply chain partner, as net zero increasingly becomes central to winning many more contracts.
While many SMEs have already delivered on ‘quick wins’, such as reducing waste (44 per cent) or switching to LED bulbs (38 per cent), the research finds there is more to be done on strategic thinking. 52 per cent of those questioned had a net zero policy, while 17 per cent – some 929,900 organisations – have still to take key actions on becoming more sustainable, meaning they may risk falling short of realising their ambitions without further action.
SMEs contribute over £2 trillion to the UK economy, giving them a critical role in progressing its net zero transition. Yet while Covid-19 pressures have somewhat subsided, the current geopolitical context means cost remains a vital obstacle. Nearly two thirds (63 per cent) cited the cost-of-living crisis as the biggest inhibiting factor, followed by the energy crisis (50 per cent). Many are calling for extra financial support: Over half believe that clean energy subsidies (56 per cent) and government grants for new projects (52 per cent) would help them meet targets.
“This year’s barometer gives me cause for optimism, “Scott Steedman, director-general, standards at BSI said. “With 82 per cent of business leaders telling us that sustainability and achieving net zero is important to their business practice, we are seeing a growing commitment to decarbonising by 2050, along with confidence that it is meaningful to turn long term ambition into immediate action.”