Banking giants call for governments to better support SMEs in net-zero transition
Bankers for Net-Zero, which convenes some of the UK’s largest banks and green economy organisation, is calling on nations to adopt a simpler shared emissions reporting framework for SMEs amid the transition to net-zero.
The organisation, which is the UK chapter of the global, UN-backed Net-Zero Banking Alliance, is launching a new ‘Mobilising SMEs for Climate Action’ workstream at COP27 in Egypt today. The workstream will convene banks, accountants, energy providers, SMEs and other key stakeholders. It is aiming to develop a framework for reporting on SME emissions.
Banks will need to know the emissions of their SME clients to credibly deliver on their net-zero goals. Yet small businesses often lack the in-house knowledge and capacity to conduct rigorous sustainability reporting.
The framework should be launched within 12 months and will be piloted by Bankers for Net-Zero members. HSBC UK, Santander, Triodos bank and Tide are among the participants. The state-owned British Business Bank is also a participant.
Supporting the workstream are Icebreaker One, Engine B and rewired.earth. The three organisations will create common data standards and a cross-industry framework for emissions reporting.
Icebreaker One is a not-for-profit organisation that states its mission as “enabling the discovery, access and usage” of data needed to enable the net-zero transition. Its overarching mission is to influence investment decisions of $3.6trn annually by 2030.
Engine B specialises in data solutions for the professional services industry. Rewild.earth describes its ambition as “conducting the largest sustainability data gathering exercise on earth”. It has previously worked on multi-direction communications and engagement streams between businesses and key stakeholders on the UN Sustainable Development Goals (SDGs).
“As the backbone of the UK economy, SMEs need a frictionless reporting framework on their greenhouse gas emissions to ensure they keep their customers, keep their bank accounts, and successfully transition to a net zero economy,” said the British Business Bank’s managing director of sustainability Julia Groves.
“From our research,h we know that, with the right support, smaller businesses have the potential to make a major contribution to the UK’s net zero targets. Cross-industry collaboration is vital to providing that support, and so we are delighted to be working with Bankers For Net Zero on this new initiative to simplify sustainability reporting for smaller businesses.”
Leaders and laggards
In related news, Lloyds Bank has published its first Net-Zero Monitor for SMEs. The monitor is based on a poll of 1,074 decision-makers at UK-based SMEs, conducted in June with the results published today (7 November).
Of those polled, just 5% said their business is taking no action to reach net-zero and is not considering doing so in the near future. Promisingly, 36% said they have measured their emissions and used these finding to inform plans to reach net-zero in or before 2050 – the national deadline. A further 28% of businesses surveyed are in the process of measuring emissions and are drawing up plans to reduce them.
Lloyds Bank took geographical and sector-specific factors into account when conducting the survey. It found that the survey furthest ahead in its net-zero journey was professional services, closely followed by transport. On a geographical basis, those SMEs in the West Midlands were generally moving faster on net-zero than peers.
The most common actions SMEs are already taking to reduce emissions were found to be related to recycling and reducing material consumption and waste. 62% of the businesses surveyed have taken action here. Similarly, 60% of firms had taken steps to reduce energy use. Many firms were probably compelled to do so amid rising energy prices.
Just 36% of those surveyed said their business is procuring renewable energy.
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