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The UK government needs to review its support and advice to small medium-sized enterprises (SMEs) on moving to Net Zero, as per a research report by British Chambers of Commerce (BCC) and Lloyds Bank. It also suggested that the government should demonstrate commitment and consistency in its Net Zero plans. Large businesses and institutions were also recommended to continue to drive behaviour change in their supply chains.
The three key recommendations are the result of a six-month deep dive by the organisations into the reasons holding firms back from reaching Net Zero, the BCC and Lloyds Bank said in a joint press release.
The ‘Climate Call to Action Research Report’ followed an earlier BCC survey of more than 1,000 businesses, 96 per cent SMEs, which found that nine out of 10 do not fully understand what the government’s target of making the UK Net Zero by 2050 means for them.
There was also a substantial divide between firms with more than 50 employees and those with fewer than 50, in terms of understanding and progress. A total of 56 per cent of the bigger firms had a ‘complete’ or ‘some understanding’ of the Net Zero target, compared to just 35 per cent of the smaller ones.
Almost twice as many firms with more than 50 employees or 36 per cent had developed a plan for reaching Net Zero compared to those with fewer than 50 or 19 per cent.
The research also showed that planning for the future skills needed to help businesses make the transition to greener and more sustainable operations has taken a backseat. Fewer than one in 20 firms or 4 per cent had carried out a written assessment of the green jobs or skills they will need in-house over the next 10 years.
One in five businesses or 21 per cent also thought that, on balance, green technology will decrease the productivity of their company, while only 10 per cent thought it would provide a boost. However, the survey also showed most firms were using new technology or adopting greener policies even if their overall understanding of reaching Net Zero was incomplete.
The research revealed various environmentally conscious practices among SMEs. More than two-thirds, or 69 per cent, have installed LED lighting. Additionally, more than a third, or 34 per cent, are investing in greener vehicles. Just under a third, representing 30 per cent, are utilising solar panels. Almost half, or 46 per cent, are engaging in recycling and waste reduction practices, and over a quarter, or 28 per cent, use renewable energy providers or tariffs.
In response to the findings, the BCC and Lloyds Bank brought together businesses in Chambers from Liverpool, Glasgow, North-East England, West and North Yorkshire, and Birmingham to analyse what needed to change to get Net Zero back on track.
A lack of consistency was found in government actions and messaging is holding many smaller firms back, when cost and fears of betting on the wrong technology are big issues.
“SMEs are the lifeblood of the UK economy and will play a critical role in our sustainable transition. Despite a challenging external environment and cost, time, and resource pressures, our research with the BCC shows that businesses are taking steps towards Net Zero, particularly where the commercial benefits are clearer—for example, reducing energy consumption to lower costs,” said Paul Gordon, managing director, relationship management at Lloyds Bank.
“Larger corporates need to help the smaller businesses in their supply chains kickstart their Net Zero journey. And, most importantly, the government needs to develop a long-term strategy which it can demonstrate it will stick to. That means supporting the development, and investment in, the infrastructure and skills needed to make Net Zero happen,” said Shevaun Haviland, director general of the BCC.
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