Wales, as a nation, has set out to achieve net zero by 2050, in line with many countries around the world.
However, the Welsh Government has also set a target for the public sector to reach this commitment by 2030 and many large corporations have set similar targets.
Although SMEs are not necessarily obligated to meet these interim targets, the impact will be felt within the supply chain and procurement with businesses potentially losing out on contracts if they cannot demonstrate their own net zero commitments.
Taking part in a Chambers Wales South East, South West and Mid facilitated event on February 17, industry experts joined together to inspire and support SMEs on their net zero journeys, discussing the benefits for business and how SMEs can play a role towards national and global goals.
Hosted by Professor Paul Harrison, Pro Vice-Chancellor for Innovation and Engagement at the University of South Wales, the event featured contributions from panellists Rob Allison, Director at Auditel; Randall Edwards, Director of Corporate Finance at Aspen Waite; Howard Gray, Director of Business Consulting, Sustainability and Climate Change at CGI; and Catherine Westoby, Net Zero Engagement Lead for the Department of Business, Energy and Industrial Strategy (BEIS).
In a Chamber survey in the latter half of 2021, only 14% of businesses in Wales had already implemented a strategy to help their company reach net zero and over half of respondents had not yet created a strategy, citing uncertainty of how to proceed as a barrier.
During the event, the panel sought to increase understanding of net zero terminology and point SMEs towards useful resources.
Catherine Westoby said: “It can be terribly confusing; there is so much information and so many resources out there. It makes it tricky for small businesses to know where to begin.
“As part of the UN-backed Race to Zero campaign, we [the UK Government] created the UK Business Climate Hub. It’s a one stop shop for advice with cheap, quick and simple actions that SMEs can take to measure and manage their emissions.”
Rob Allison said: “Trying to be environmentally conscious when running your business just 15 years ago was cost prohibitive but now it is beginning to be commercially sensible. For those starting out carbon neutrality can be a stepping stone towards net zero which delivers year-on-year gains, but this must not be an isolated strategy and action must be taken to make a greater difference in the long term.”
Opportunities for innovation, corporate and social responsibility, and competitive advantages were also explored.
Randall Edwards said: “The relationship between transitioning to a green economy and shareholder value is inextricably linked. If you are part of a larger supply chain or rely on procurement to attain business, you cannot afford not to be transitioning. From a shareholder value perspective, you can achieve a massive premium by being the first in your sector or micro sector to transition.”
Howard Gray said: “The opportunities for SMEs to become more responsible and sustainable businesses will give them a value to shareholders and stakeholders but, more broadly, organisations that think of their impact from a sustainability perspective tend to grow quicker and be more innovative.”