- Fewer than one in 10 SMEs (8%) fully understand what the Government’s 2050 Net Zero target means for them.
- Despite this, most SMEs (79%) are taking action to reduce their carbon footprint and increase their efficiency.
- There is a huge divide on progress between smaller businesses operating on tight margins and larger SMEs with more resources.
A British Chambers of Commerce (BCC) survey of more than 1,000 businesses, of which 96% are SMEs, has found that nine out of 10 don’t fully understand what the Government’s target of making the UK net zero by 2050 means for them.
Net zero is a commitment to ensure a balance between greenhouse gas emissions into the atmosphere and those removed from it. Businesses can work towards net zero by reducing the emissions that a company makes directly, indirectly and the emissions associated through its supply chain.
Both the UK and Welsh governments have set targets to achieve net zero by 2050, while the public sector in Wales has a target of 2030. Some larger businesses are also targeting 2030 or interim deadlines ahead of 2050, with SMEs in their supply chain having to demonstrate their sustainability commitments.
The survey found that there is a substantial divide between firms with more than 50 employees and those with fewer than 50 in terms of understanding and progress.
A total of 56% of the bigger firms have a ‘complete’ or ‘some understanding’ of the net zero target, compared to just 35% of the smaller ones. Almost twice as many firms with more than 50 employees (36%) have developed a plan for reaching net zero compared to those with fewer than 50 (19%).
Previous research by Chambers Wales South East, South West and Mid revealed that only 14% of businesses in Wales had already implemented a strategy to help their company reach net zero and over half of businesses had not yet created a strategy, citing uncertainty of how to proceed as a barrier.
Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said: “This latest data shows that small businesses, hugely significant contributors to the Welsh and UK economies, are falling behind the public sector and larger businesses in understanding net zero and implementing strategies to realise their green ambitions by 2050.
“When announcing the findings of the Welsh Government’s Roads Review and National Transport Delivery Plan this week, the Deputy Climate Change Minister stated ‘we will not get to net zero unless we stop doing the same thing over and over’.
“We need a step change in the approach of support and guidance for SMEs, putting them at the heart of plans in order to achieve net zero by 2050. The Chamber is proud to play its part by connecting members with partners with expertise in this area and we will be developing our support further over the next year.”
In response to the findings, the BCC and Lloyds Bank plan to bring together businesses from across the country to identify the most effective ways to target support and raise awareness.
Shevaun Haviland, Director General of the BCC, said: “The cost-of-living crisis means many smaller firms are focused on keeping their heads above water. So, it is perhaps no surprise that researching and planning for net zero has slipped down the list of strategic priorities.
“But if the UK is to stand a chance of hitting its 2050 net zero target, then businesses must be at the heart of the strategy to do that. They will provide one of the biggest dents in CO2 emissions by making the transition.
“Yet, there is a real danger that smaller businesses will get left behind unless politicians, banks and business leaders come together to galvanise action.”