In 2019 the government made a legally binding commitment for the UK to reach net-zero emissions – effectively capturing at least as much carbon as it emits – by 2050 to avoid the worst impacts of climate change.
But meeting targets such as this one requires action from business as well as government. The UN’s Race To Zero campaign seeks to mobilise businesses and other organisations to commit to the goal of carbon neutrality by 2050. Almost a third of the UK’s largest businesses have already signed up; however, the campaign will only succeed if smaller businesses are also on board. Many signatories have already committed to a shorter-term goal of halving their carbon emissions by 2030.
James Close, head of climate change at COP26 sponsor NatWest Group and EBN steering group member, said: “In May 2020, the concentration of carbon dioxide in the atmosphere was at its highest in human history. Climate change is the biggest crisis facing the world today, and businesses of all sizes need to rise to meet the challenge. Even the smallest businesses produce carbon emissions, whether through their buildings, their vehicles or their supply chains, so they have an important part to play in helping reduce the negative impact on our planet.”
Be part of the solution
A recent survey by the British Standards Institution (BSI) found that SMEs were overwhelmingly committed to the principle of carbon reduction, with 70% having either made or considered making a commitment to net zero. IT firm DataSolutions, for example, has implemented a number of measures, which include investing in electric cars and charging points, replacing a gas-burning office heating system with a more efficient heat pump system, and moving its enterprise resource planning (ERP) system and other corporate applications to the cloud. Having measured its carbon output in 2019 and again in 2020, the company is on track to become carbon neutral by 2022.
Its managing director, Michael O’Hara, said: “We recognise the environmental impact of our operations: the industrial and service sectors generate over 40% of global CO2 emissions. We want to play our part by becoming cleaner, greener, and more energy-efficient, and this will benefit our customers, our people, and the planet.”
Future-proof your business
Another important reason for businesses to make the carbon reduction pledge is the need for future-proofing. Things are changing rapidly. By 2030, for example, new petrol vehicles will no longer be available to buy in the UK. Green investments made today will reap big rewards in the future.
Richard Alvin, group managing director of Capital Business Media, has spent the past 10 years transforming the business into a carbon-neutral company via initiatives that include changing utility suppliers to 100% green energy, operating a hybrid working model that reduces travel to work and carbon emissions, and providing electric vehicles as company cars.
“We’re introducing a new car scheme when lease deals expire to promote electric vehicle take-up instead of standard petrol and diesel vehicles,” he says. “This provides our employees with higher-specification vehicles, with substantially lower running costs and a company car tax of 1%, that are also better for the environment.”
Going green has created new business opportunities, including two large corporate projects linked to global motor manufacturers with close ties to Formula 1. “Without that carbon-neutral status, I doubt such established firms would have considered long-term partnerships with us,” says Alvin.
Another major consideration is that large organisations, often customers of smaller businesses, will increasingly demand that their suppliers have a plan for net zero. Failing to be able to produce one could cost SMEs business in the future.
Taking the first steps
The challenge for many smaller firms looking to reduce their own carbon footprint is knowing where to start. The BSI research found that 82% of SMEs needed more guidance about how to achieve the target. Every business will need to develop its own net-zero strategy, starting with an assessment of its current carbon situation, calculating greenhouse gas emissions and understanding how they are generated by the business, and then identifying ways to reduce them. The Carbon Trust has a carbon footprint measurement tool designed for SMEs.
“If SMEs think about their carbon budget as they would a financial budget, it becomes more manageable,” says Adam Bastock, founder of Small99, which helps small businesses achieve net zero. “Setting a business goal of, for example, 10 tonnes a year, and then working out how you will ‘spend’ your carbon can be a simple way of understanding the issue.”
Make the net-zero pledge for a better tomorrow
With the current focus for so many small businesses on recovering and building back from coronavirus, thinking as far ahead as 2030 can be a challenge. But with opportunities to drive innovation, increase competitiveness, and stimulate resilient growth, the business case for making net zero central to their short-, medium-, and long-term strategies is a powerful one.
James Close says: “If you’re a sole trader or run a small business, NatWest, together with the UK government, is urging you to pledge your commitment to cutting your carbon emissions in half by 2030, and to reaching net zero by 2050 to help secure a better tomorrow.”