Alex Veitch
Director of Policy and Insight, British Chambers of Commerce
SMEs are the lifeblood of the UK economy and play a crucial role in the country’s transition to net zero. However, they need help and certainty from Government to navigate their journey.
There are many trailblazing companies already innovating and making a real difference. However, our research shows that many small firms simply don’t understand what net zero means for them. Awareness is slowly increasing, but there’s still lots of work to do.
Uncertain targets for SMEs
Our survey in August, carried out alongside Lloyds Bank, showed that 9 out of 10 companies are confused about the impact of the Government’s 2050 targets for their business. A lack of understanding is holding them back.
Three ways to support SMEs
Three key changes are needed to help businesses hit net zero. Firstly, the Government should review its support and advice to SMEs. It has a vital role to play in informing business, signposting advice and support, as well as providing incentives when circumstances allow.
An SME Net-Zero Industrial Strategy could offer one means of achieving this as a clear, single point of reference. Net zero transition requirements for SMEs have to be realistic, achievable and properly articulated.
Most firms are using new technology or adopting greener policies, even if their understanding of reaching targets is incomplete.
Secondly, larger businesses and institutions must continue to drive behaviour change in their supply chains. Peer-to-peer knowledge-sharing is a powerful tool. There are many examples of positive business cases; SMEs should look for examples and see how acting on energy and sustainability can help win business and reduce costs.
Finally, the Government should demonstrate commitment and consistency in its net zero plans. SMEs want to address the changing climate but cannot plan for future investment if the sands keep shifting — as they did with the Prime Minister’s announcements in September.
SMEs investing in net zero
Despite the challenges in the path to net zero for SMEs, there are some positive signs. Our data shows most firms are using new technology or adopting greener policies, even if their understanding of reaching targets is incomplete.
More than two-thirds of SMEs (69%) told us they have installed LED lighting and more than a third (34%) are investing in greener vehicles. Just under a third (30%) are using solar panels. These are encouraging statistics, but we need to use them as a springboard to accelerate the SME net zero journey. A long-term Government strategy that doesn’t change and is clearly explained to companies is the way forward.