NetZero Report - SMEs lack support or advice on how to transition to net zero

Small businesses want to play a key role in the UK’s journey to netzero, but do not know where to turn when it comes to cutting carbon emissions, according to a new report from a coalition of business groups, energy networks and expert bodies.

Commissioned by a new coalition, the Zero Carbon Business Partnership and published on 14 April, Small businesses advice on net zero: discovery phase finds that SMEs, despite caring about cutting carbon, are unsure where to start.

The coalition includes, amongst others, the Federation of Small Businesses, the British Chambers of Commerce, CBI, Electricity North West, Northern Powergrid and Western Power Distribution.

The findings were made as part of a series of workshops, interviews (with 42 businesses) and surveys (with 254 businesses), as well as reviews of literature and analysis of online search trends.

The study highlighted several key needs for SMEs:

> Clear information. The language of net zero is not well understood by SMEs, the study found. They are getting environmental messaging from multiple sources and angles and are unclear about what policy changes will affect their businesses. Also, in many cases, the information they need is not reaching them.

> Staying in business. Remaining financially viable is generally the strongest lever in the net zero conversation with SMEs, the study found. Financial viability should be at the heart of messages about carbon reduction.

> Financial and digital literacy support. The research showed that those making faster progress towards netzero, and experiencing business benefits as a result, all had better financial skills and digital literacy.

> SMEs generally view trade bodies and business groups as trusted sources of information, but existing support frameworks are seen as complex. The report says trade bodies and business groups could enhance trust by providing feedback about the netzero transition experience of SMEs.

> Peer-to-peer relationships. Enabling peer-to-peer support structures, particularly at local and regional levels, will enhance trust, capacity and confidence to act, particularly within as-yet immature low carbon supply chains.

> Meeting the challenge of COVID-19. The initial focus of any services must be on “penetrating the overwhelming noise to offer uncomplicated, rapidly understandable guidance”.

> A joined-up narrative. The study found that SMEs sometimes need a joined-up narrative to cut through confusing language around netzero.

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Getting the SME Net Zero Support Your Business Needs

The finding that nine in ten UK SMEs lack adequate support on the net zero transition is striking but not surprising. Large corporations have dedicated sustainability teams, access to specialist advisers and the buying power to negotiate green tariffs. Small and medium-sized businesses typically have none of these advantages, yet face the same regulatory and reputational pressure to demonstrate progress on carbon reduction.

The landscape for SME net zero support has improved considerably since the Zero Carbon Business coalition report was published. Government-backed schemes, local authority energy efficiency grants and simplified carbon reporting frameworks are now available to businesses of all sizes. Renewable energy options, including business solar panels, power purchase agreements and green electricity tariffs, have also become more accessible and cost-competitive.

Catalyst Digital Energy works with UK SMEs to develop pragmatic net zero strategies that fit their budget and operational realities. Whether you need help with carbon footprint measurement, energy procurement or sustainability reporting, speak to one of our energy consultants today to get the SME net zero support your business needs.