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UK small firms need support to reach Net Zero

21 February 2023

Most small business owners say they don't fully understand what the government's 2050 Net Zero target means for them, according to new research.

The British Chambers of Commerce (BCC) has surveyed more than 1,000 businesses, of which 96% are SMEs, to find out how UK small firms are taking steps to reduce their carbon footprint.

The findings suggest that nine out of ten firms don't fully understand what the government's target of making the UK Net Zero by 2050 means for them. While most SMEs (79%) are taking some steps to become more sustainable, there appears to be a significant divide on progress between smaller firms and larger SMEs that have more resources.

Planning for Net Zero

A total of 56% of the bigger firms (with more than 50 employees) have a "complete" or "some understanding" of the Net Zero target, compared to just 35% of the smaller ones (with less than 50 employees). Almost twice as many bigger SMEs (36%) have developed a plan for reaching Net Zero compared to smaller firms (19%).

Overall, the research shows that:

  • 69% of SMEs have installed LED lighting;
  • 34% are investing in greener vehicles;
  • 30% are using solar panels;
  • 46% are using recycling and waste management strategies;
  • 28% use renewable energy providers or tariffs.

Worryingly, one in five businesses (21%) say that using green technology will harm their productivity because of the costs, time and disruption. Just 10% say it will boost their business. However, those businesses that have embraced changes say they have seen cost savings and greater efficiency.

"Over the last 18 months we have changed the majority of our lighting to LED, and as a result have achieved a net saving of over £1,000 per annum even after the cost of [installation] is taken into account." Communications firm, Herefordshire.

Support for small businesses

When it comes to getting advice about achieving Net Zero, 42% of small firms polled said they would approach the Chambers of Commerce for support and 19% said they'd speak to business advisers such as banks, lawyers or accountants.

In response to the findings, the BCC and Lloyds Bank are working together to identify the most effective ways to target support for small firms and raise awareness.

Shevaun Haviland, BCC director general, said: "The cost-of-living crisis means many smaller firms are focused on keeping their heads above water. So, it is perhaps no surprise that researching and planning for Net Zero has slipped down the list of strategic priorities.

"But if the UK is to stand a chance of hitting its 2050 Net Zero target, then businesses must be put at the heart of the strategy to do that. They will provide one of the biggest dents in CO2 emissions by making the transition. 

"Yet, there is a real danger that smaller businesses will get left behind unless politicians, banks and business leaders come together to galvanise action. We have a position of responsibility here and it is up to us to use our influence to improve awareness of the benefits of becoming more energy efficient and how to do it."

Written by Rachel Miller.

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