Small and medium sized businesses (SMEs) in the UK are finding a variety of reasons beyond financial gains in their drive to reach net zero.
The latest edition of Lloyds Bank’s Net Zero Monitor was published earlier this month having surveyed 1,074 financial decision makers in SMEs and revealed that 64% of their companies 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.”
The last Lloyds Bank Net Zero Monitor with surveys conducted in June 2022
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.
More than seven out of 10 (72%) said increased energy and material costs are the biggest negative influence on their decarbonisation efforts.
Another significant challenge is supply chain disruption, cited by 59% of survey respondents with 33% saying they find it challenging to collaborate to reduce emissions outside of their own operations.
Soaring interest rates were also found to be a significant challenge to 57% of survey respondents in their efforts to reach net zero.
*There are a number of free resources available for SMEs looking to measure 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.