The UK government committed one year ago to achieving net-zero by 2050 to limit the irreparable physical, biological, economic and social impacts of climate change. Achieving this target will require dramatic changes across all sectors and sizes of business. Companies with fewer than 250 employees account for almost 20% of the UK’s carbon emissions, reminding us of the critical role that SMEs play in the transition to net-zero.
What does ‘achieving net-zero’ really mean?
Governments and organisations are aiming to drive down emissions and offset any residual with technology or by investing in third party initiatives. The goal is achieving net-zero emissions, also referred to as carbon neutrality.
Why should SMEs take action?
SMEs are already aware of the challenge facing them, with 60% reporting that sustainability is on their agenda. There are increasing expectations from customers, investors, suppliers, regulators and employees to act. As more large companies such as Sainsbury’s and BT make net-zero commitments, this puts more pressure on smaller firms in their supply chains to help them achieve these goals.
In the immediate term, perhaps the greatest driving factor for SMEs is that taking action to positively impact the environment often supports cost savings, brand strength, and the creation of new revenue streams. As stated by Mark Carney: “firms that align their business models to the transition to a net-zero world will be rewarded handsomely. Those that fail to adapt will cease to exist. The longer that meaningful adjustment is delayed, the greater the disruption will be.”
Practical steps SMEs can take
There are a number of steps you can take to support this transition, which can have a positive financial impact and make you a more appealing supplier, partner and customer.
- Understand current emissions, risks & opportunities – online tools such as the Carbon Trust’s SME carbon footprint calculator[1] help you to understand your baseline. It is also important to understand the most relevant and likely risks and opportunities, such as extreme weather events and new customer opportunities. With this information, you can develop a carbon transition strategy based on what will have the highest impact.
- Set targets and report on progress – articulating ambitious targets and plans is a good way to enhance your brand and collaborate with key stakeholders.
- Emissions reduction initiatives – examples include reducing and recycling paper and plastics, reducing staff travel, and improving operational efficiency. This can range from turning off lights and computers when not in use, using LED light bulbs (which consume at least 75% less energy), digitising processes, switching to renewable energy sources and investing in heat control technology. Reducing the temperature of the average workplace by just 1°C can save enough energy to print over 40m sheets of A4 paper.
- Resilience initiatives– this will differ based on the company’s unique risks, but might include upgrading assets to protect against extreme weather events, onsite power generation and storage, taking out business continuity insurance or diversifying investments.
- Offer green products & services – given changing customer and business buying behaviours, there is a quickly growing market for green solutions. Successful examples include clean energy (e.g. Limejump), plant-based foods (e.g. Allplants) and reusable cups, bottles and packaging (e.g. Chilly’s Bottles). This can also be as simple as including environment features in existing goods, such as using recycled or sustainably sourced materials (e.g. Yallah Coffee).
- Report on progress – it is then important to track progress against these targets, report this internally, and even consider reporting this externally in your annual or corporate responsibility report.
What the CBI and partners are doing to act
The CBI is delivering a programme to support the outcomes of the green recovery, COP26 and our broader climate agenda. This means showcasing examples of progress and innovation in companies across the UK and beyond, galvanising climate commitments and action, and helping to shape domestic and international policy in the lead up to COP26.
We are developing a platform – the Goal 13 Impact Platform – which will capture insights into the most impactful initiatives, their climate and commercial impact, barriers to progress and lessons learned. It will also serve as an opportunity to ‘matchmake’ organisations who are working on similar initiatives and challenges to accelerate progress.
We are engaging organisations of all sizes and sectors through interviews, and we intend to share the findings both through the platform itself and at various events such as our Net-Zero Future conference, our Annual Conference and COP26.
Your input will make a difference
This is an important opportunity to bring these issues to life for SMEs, and ensure that large companies and their supply chains are part of these critical conversations. The main benefits for businesses taking part will be to amplify their own progress, galvanise their sector and business partners, and have access to a compelling set of insights and collaboration opportunities.
Our team is keen to speak to members about the progress they have made so far, and some of the main challenges that remain. Regardless of where you are in your climate journey, we are interested in speaking to you. If you would like to participate in an interview, please contact Elicia Cantelo, our COP26 Project Manager, who can share more information.
In the words of CBI Director-General Carolyn Fairbairn, “to tackle the climate emergency in the time we have, we need to go faster, and further, than ever before… With the tech advancing so rapidly and costs falling, the goal of a net-zero future is achievable.”
[1] The Carbon Trust SME Carbon Footprint Calculator can be accessed here.