Small businesses up and down the country want to get to net zero, but need support along the journey. London’s SMEs are leading the way, writes Paul Gordon
The pandemic taught us we can achieve great things together when we focus our efforts and resources towards a common goal. When thinking about climate change, we need to ask ourselves if we can go further and faster. Could 2045 become our new target? Or even 2040? Just think: businesses could take advantage of the opportunities for green growth, investment could increase, and we could acquire new talent pools and skill sets while working towards a common goal of protecting the environment for future generations.
Yet this transition is not without its challenges – it requires time, effort, and knowledge. We all know there is a need for urgent transformation: we see it everywhere; we are surrounded by the consequences of climate change on our planet. But how can we achieve this change in a sustainable way without leaving smaller and independent businesses behind?
The government’s Net Zero review recognised the need to bring small and medium-sized enterprises (SMEs) along on the journey. For some, such a transition seems challenging in this difficult economic climate; we are hearing these concerns from clients on a day-to-day basis.
What’s good news is that the transition is already well underway amongst these businesses. In fact, 64 per cent of SMEs said they have a plan in place to curb, or reduce, emissions ahead of the government’s 2050 target.
Our research also showed that SMEs in our capital city are paving the way. London has the highest concentration of SMEs already at net zero – 12 per cent compared to an average of 7 per cent across the rest of the country. We know from conversations with clients that the businesses already at net zero are an inspiration to those just starting out on their journey. Businesses see the success of others and the tangible benefits such as cost savings, employee retention and recruitment, and this drives them to make changes, however small they may be.
London SMEs have a strong desire to reach net zero – over half have a plan in place and say they are motivated to make progress. Eighty-two per cent of London-based SMEs stated that sustainability considerations increased in importance for them last year. Interestingly, the desire to protect the environment for future generations (the main motivation for 40 per cent of London SMEs) outweighs commercial considerations of waste reduction (38 per cent) and cost savings (36 per cent).
Businesses in London and further afield need to know where to turn to and receive support to help them deliver change. Large organisations have a responsibility to support smaller companies across all industries and regions of the UK to meet their environmental challenges and to set stretching, sustainable and, ultimately, attainable goals.
Achieving net zero is not without its own challenges. London’s small and medium businesses face a range of competing priorities like insufficient budget – cited by 38 per cent as their major challenge – and difficulties measuring emissions outside of their operations (34 per cent) as well as low return on investment (33 per cent). But with the UK’s 5.5 million small and medium enterprises making up the majority of the UK’s business population, the acceleration and progress these businesses make is crucial to the UK reaching its net zero target by 2050.