UK Small businesses contribute a third of emissions, but are too far behind in net zero targets

Smaller businesses account for almost a third (30%) of all current UK greenhouse gas emissions (including emissions from households, industry and government)

Around half of total emissions from UK businesses as a whole, according to a 20th October 2021 report published by The British Business Bank – the economic development bank established by the UK government.

The report, “Smaller businesses and the transition to net zero“, points out the potential collective influence of UK smaller businesses and the considerable contribution they could make to wider net zero objectives if they all made changes to reduce their carbon footprint. The report, presented as an attempt to probe deeply into the often overlooked topic, with the results seeming to come from fresh data via a bespoke, nationally representative survey of 1,200 smaller businesses, and analysis of public data sources.

Just over three quarters of businesses (76%) are yet to implement comprehensive decarbonisation strategies, capabilities and actions, according to the research. To give you an idea of what is happening a paltry 3% of smaller businesses surveyed say they have measured their carbon footprint in the past five years and subsequently set an emissions reduction target.

Transition is slow

The research finds there are few proactive measures from businesses to improve their own knowledge and capabilities, and more than half (56%) in the survey say they have taken no actions at all.

But, physical actions are a very different matter (94%) say they have taken at least one action to reduce their emissions, though they tended to be simple actions, such as installing a smart meter.

From a transitional standpoint, the most common motive for taking action, mentioned by just over half (51%) of businesses, was that it ‘made financial sense’, speaking of the need to align net zero and financial objectives.

The data states around half (52%) of smaller UK businesses fall within the ‘Carbon Complacent’ or ‘Carbon Exposed’ status, based on business characteristics, emissions intensity, actions and attitudes according to the research. Businesses tend to be reactive or not particularly interested in cutting emissions and have ‘low carbon transition maturity’.

Over half (57%) of smaller businesses have heard about the government’s commitment to reach ‘net zero’ emissions by 2050, and the implications of climate change for their businesses (56%), establishing a strong base for further transition.

On the positive side, nearly half (47%) of smaller businesses state reducing carbon emissions or environmental impacts is a high or very high priority over the next two years, decarbonisation is not a priority for 53% of small businesses who have no immediate plans to move forward with reducing their carbon footprint. This goes to show the need to raise awareness, and bridge the knowledge gap is important for changes in attitude to actually happen.


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Obstacles are numerous

The research found that smaller businesses identified more than twenty obstacles preventing action on net zero.

Some of the most common issues are, more than a third (35%) of smaller businesses cited costs as an obstacle for reducing carbon emissions, foremost upfront capital costs (21%). Lack of information was preventing (12%) them from taking action.

Finance is there for net zero transition

Approximately 700,000 small businesses (11%) in the UK – have accessed external finance, in the form of loans or equity, to support net zero actions. In the future, 22% of the UK smaller business population – say they are prepared to access external finance to support net zero actions in the next five years.

Summary

Overall, UK small businesses are looking forward rather than standing still, but much more needs to be done to even hope for zero carbon status in the coming years.

More investment in finance, education and positive attitudes will need to be prioritised before significant progress will be achieved.

Photo by Raghavendra Saralaya on Unsplash 

CEO
Owner of smallmediumbusiness.co.uk, technical specialist who has a passion for the environment and loves his tech.