SMEs are embracing change to achieve net zero goals

Sir David Attenborough told world leaders at the G7 that they are facing the most important decisions in human history when it comes to climate change. He warned that ?humans could be on the verge of destabilising the entire planet?. 

SMEs in the UK account for 99.3 per cent of all businesses, three fifths of employment and around half of turnover in the UK private sector. They will play a critical role in helping the UK to achieve its current climate change target to reduce emissions by 78 per cent by 2035 compared to 1990 levels.

Many SMEs are facing significant challenges caused by the impact of Covid-19, rising costs and skills shortages and for those that export, the need to respond to new trading arrangements with the EU and beyond. It would be easy to see the move to net zero as one more burden, however, there are real opportunities from embracing the need for change. By reducing carbon emissions, businesses can save money by reducing energy and resource use. This will make them more competitive by reducing costs and it will also improve brand appeal as many customers are now actively looking for businesses with good environmental credentials.

As well as pressure for change from consumers, larger businesses that have to comply with the government's Sixth Carbon Budget will place pressure on smaller suppliers to be greener and more sustainable in order to  help improve their own green credentials and meet targets.

On top of the many challenges businesses are facing, it is understandable that there is confusion about much of the terminology used in relation to net zero goals as well as what action businesses can take to make a real difference.

Business trade associations are leading the way in providing help and support to their members, to reduce their carbon emissions while also identifying the opportunities from new ways of doing business. Additionally, commercial lenders are committed to supporting their business customers to understand the financial implications of pivoting to net zero while also providing funding for investment. The new government-guaranteed Recovery Loan Scheme is one potential option.

On 6 July at 10am, UK Finance's Commercial Finance Week will bring together representatives from three sectors that have a critical role to play. The National Farmers Union, the Society of Motor Manufacturers and Traders and the Engineering and Machinery Alliance will share their thoughts about the challenges and opportunities of moving towards net zero, alongside other expert speakers. Join us for a lively and engaging session that will also give practical advice on starting or accelerating SMEs journey to net zero.