Survey: Three-quarters of UK SMEs without credible plans to reduce emissions

SMEs are responsible for half of the UK's business-related emissions

The British Business Bank polled 1,200 decision-makers at SMEs on their approach to reducing emissions earlier this year, with the results of the survey published today (20 October).

The majority (76%) of the survey respondents’ businesses are yet to implement comprehensive decarbonisation strategies. While 44% of the businesses have taken some action to improve in-house knowledge and capability on environmental sustainability, for example, just 3% of the businesses polled have measured their carbon footprint in the past five years and used this measurement to calculate an appropriate target to reduce emissions.

A few key causes of this lack of science-based action are floated by the British Business Bank – one being a lack of knowledge.  43% of the survey respondents said they had not heard at least “a fair amount” about the Government’s 2050 net-zero targets, meaning they are unlikely to understand the implications for their business and to prioritise low-effort, low-impact changes.

Limited finance and resources were another major barrier. More than one-third (35%) of the survey respondents cited costs as a major challenge, with the proportion higher among businesses on the smaller end of the SME spectrum.

Overall, around half (53%) of the respondents said their business is not yet ready to prioritise decarbonisation due to current constraints. Aside from costs and a lack of understanding, a lack of control due to tenancy agreements and a lack of appropriate and affordable technologies were found to be common barriers.

With SMEs accounting for half of the UK’s business-driven emissions, the British Business Bank’s chief executive Catherine Lewis La Torre said that “clearly, more needs to be done” to help them prioritise decarbonisation

“Smaller businesses will generally have lower individual carbon footprints than their larger counterparts, but by broadening their vision and committing to action they can collectively produce a significant overall impact,” she said.

“Action to mitigate the impacts of climate change is at a tipping point, and it is crucial for smaller business owners to feel empowered, informed and supported in making the relevant steps to decarbonising their business if the UK is going to meet its wider net-zero objectives by 2050.

“The Bank continues to strive to bridge the knowledge gap and work with its partners to improve smaller businesses’ access to the right finance to help them transition to net-zero. We hope this report encourages business owners to review their business model, consider where changes can be made and to make the necessary investments to secure a sustainable future for their businesses.”

The report from the British Business Bank echoes findings from similar surveys by organisations including O2 and the British Chamber of Commerce, Lloyds Banking Group and the Zero Carbon Business Partnership.

SME support

The UK Government has already published guidance on how SMEs can and should measure and report emissions, following a call to action from Prime Minister Boris Johnson in May.

Building on this, the British Chamber of Commerce and O2 are hosting an online hub enabling businesses to access practical information on how to approach the net-zero transition. This tool is free to access.

The hub contains step-by-step guidance on measuring and reporting emissions; advice on seeking help externally and information on how to apply for grant and loan funding. It also hosts case studies from businesses that already have net-zero strategies.

For SME retailers specifically, the Retail Sector Council recently opened an online hub offering practical advice, called ‘Green Street’. This initiative has received funding from the Department for Business, Energy and Industrial Strategy (BEIS) as well as the RSC.

Sarah George