SMEs see more than financial benefits as reasons to reach net-zero

UK small- and medium-sized businesses (SMEs) that are attempting to reach net-zero aren’t just being driven by financial benefits, with a new survey from Lloyds Bank finding that many smaller organisations are revamping their purpose and impact-driven decisions.

SMEs see more than financial benefits as reasons to reach net-zero

There are more than 5.5 million SMEs operating in the UK

The latest edition of Lloyds Bank’s Net Zero Monitor has been published this week. The Banking group surveyed 1,074 financial decision makers in SMEs (excluding micro businesses) and established where they are in their sustainability journey today.

The survey found that 64% of UK SMEs have plans in place to reach net-zero by 2050. Just 7% currently claimed they were already operating as a net-zero business and of those, 37% claimed that protecting the natural environment for future generations was the biggest benefit. This was followed by 32% claiming waste reduction as the biggest benefit.

Overall, 37% of SMEs claimed that protecting the planet for future generations was the biggest benefit of becoming a net-zero business with employee wellbeing and engagement second at 27%.

Lloyds Banking Group’s managing director of SME and Mid Corporates Paul Gordon said: “The progress SMEs are making on their Net Zero journeys is crucial to enabling us all to reach the 2050 target, and their dedication to the task is to be admired. It is heartening to see that SMEs that have already embarked on their Net Zero journey are taking actions not just for the commercial benefit, but because they are motivated by purpose and environmental factors. This shows that protecting the planet is a global concern and that we can play our role in making positive changes.

“SMEs face a range of competing priorities and day-to-day challenges. But we hope that SMEs which have yet to take their first step on the path to Net Zero will be motivated by seeing the success of others and the real, tangible benefits the transition can bring to their business as they plan for the future.”

Carbon challenges

The previous Lloyds Bank Net Zero Monitor, with surveys taking place in June 2022, warned that more than four in ten SMEs believe they don’t have insufficient financial resources to reduce their emissions in line with climate science.

Lloyds Bank asked representatives to describe their biggest challenges to delivering and implementing decarbonisation strategies. More than seven in 10 (72%) said increased energy and material costs are the biggest negative influence on their net-zero journey.

Another significant challenge is supply chain disruption, cited by 59% of survey respondents. Supply chain disruption takes up time and resource, for one, and also makes for a more challenging environment in which to engage suppliers on climate issues. Indeed, 33% of survey respondents said they find it challenging to collaborate to reduce emissions outside of their own operations.

Increasing interest rates were also found to be a shared challenge. 57% of survey respondents said this was a significant challenge to their net-zero journey.

There are several free resources available for SMEs looking to baseline their climate impact. One such tool, the SME Climate Disclosure Framework, comes from CDP and the SME Climate Hub. For UK firms specifically, the Government has provided guidance on how SMEs can and should measure and report emissions, following a call to action from then-Prime Minister Boris Johnson in May 2021.

Join the net-zero debate at edie 23

edie has evolved and re-launched the multi-award-winning Sustainability Leaders Forum into edie 23 – the world’s largest corporate climate action event for business, sustainability and net-zero leaders.

Taking place in London on 1-2 March 2023, the brand’s flagship event has undergone a major revamp to become edie 23, with a new name, new venue, multiple new content streams and myriad innovative event features and networking opportunities.

One of these features is a new Net-Zero Stage, which will be of interest to readers of this article. Speakers lined up for the stage over our jam-packed two-day programme include representatives for Virgin Media O2, L’Oreal, Lawyers for Net-Zero, Whitbread and the British Retail Consortium.

Find out more about edie 23 and register to attend here. 

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