Net zero: Why SMEs are important

We’re all part of the race to net zero. But why are we doing it? And how will it help?

Why do we need to be Net Zero?

The key lies in its definition. By ensuring the amount of carbon put into the atmosphere is equal to the amount removed, we can limit the warming of the earth to 1.5 degrees above industrial levels.

If we don’t achieve this, the effects of climate change will be irreversible. We’ll face extreme weather patterns that will cause food and water shortages, as well as millions of climate refugees.

Net zero commitments are crucial, and to achieve the global target of net zero by 2050, every company needs to be setting out and reaching their own targets.

The impact of SMEs

Surprisingly, SMEs contribute to 63 per cent of the UK’s non-household greenhouse gas emissions (44 per cent if you don’t include supply chains).

It’s a common myth that only large companies are responsible for climate change. Of course, they produce a large proportion of emissions, but this is often used as a scapegoat for smaller companies (or even individuals) to not take action, as if their changes would be like a drop in the ocean. This leaves us at risk of inaction due to the bystander effect, or falling into the idea that it’s up to others to make the change.

The collective action of everyone doing their bit is the only way we can reach the collective goal of net zero.

Why are SMEs such big contributors to emissions?

It may seem odd that smaller companies are generating roughly half of the UK’s carbon emissions, but these are the organisations that face the most barriers. Around 90 per cent of SMEs expressed they felt limited by obstacles despite wanting to reduce their emissions.

Some of the difficulties SMEs may face include:

• A financial struggle to factor in environmental solutions into their budget. There’s a lack of incentives such as tax credits to help, particularly to allow them to invest in net zero emission technologies.
• Due to a lack of standardization in reporting and measuring of carbon emissions, it can be something quite complex for an SME with no previous experience. There isn’t as much time or budget to dedicate towards it, especially when people have multiple roles within a business. There have been suggestions that the government tailor existing and future environmental standards to SMEs to make them less complex and more accessible.
• It’s hard to reduce what you don’t measure – without access to the right knowledge, technology, or data, it’s difficult to know how to lower your carbon emissions. Training and readily available resources are key to helping SMEs understand how to become net zero themselves.

An open door

Conversations about climate change need to be open and frequent. Companies aren’t in a sustainability competition with each other. It’s a joint goal. So, it’s important to share knowledge about how to become net zero.

By adopting net zero practices, SMEs can "stand out" in their market and yield long-term benefits in terms of cost savings and market competitiveness. 

Contact your accounts manager to discuss the benefits of transitioning your business towards net zero on 01254 688100.