Understanding Net Zero for SMEs – measure today to make a change for tomorrow

Since joining IEMA as Head of Partnerships in October 2021 I've become increasingly aware of the need to support small and medium-sized enterprises (SMEs) to demystify environmental sustainability and develop Net Zero SME plans.

Moving from digital financial services to environmental sustainability a few weeks before COP 26, I was overwhelmed by the buzzwords and pace at which sustainability was increasingly moving up everyone’s agenda. From net-zero carbon to carbon-neutral, sustainable development goals to climate-related financial disclosures, my head was swimming in a sea of terminology and within days my notebook had become a lexicon of terms and phrases. I need to refer back to my notes less frequently now as it’s become a second language to me however, I see the need to help others who aren’t living and breathing the subject matter every day and are overwhelmed despite their best intentions.

According to research in 2021 by the Department for Business, Energy and Industrial Strategy (BEIS), UK SMEs constitute 99% of the business population (5.6m businesses) and it is essential SMEs receive the necessary support if the UK is to achieve net-zero by 2050 to help them understand what net zero means and how it can be achieved in their business

IEMA is home to The Broadway Initiative an alliance of business organisations working with professional, academic, and environmental groups collaborating on work programmes designed to help enable the whole economy to meet net-zero and wider environmental goals.

One Broadway work program called Zero Carbon Business is focused on providing advice to SMEs. It is a shared endeavour which includes the Federation of Small Businesses, The British Chamber of Commerce, British Independent Retailers Association, Natwest, HSBC and IEMA to name a few

The aims of the Zero Carbon Business coalition are to collaborate to:

• Understand the needs, barriers, and opportunities for SMEs in the decarbonisation of the economy
• Prioritise shared investment in, and coordinate the development of, content and tools that meet SME needs

SMEs have limited resources and in this currently challenging economic time when their priorities are to remain profitable, retain staff and attract new customers to name just 3, finding the time to understand why their business needs a net-zero plan and how to embed sustainable practices can easily slip down, or off their to-do list.

Every small business will be at a different stage of developing a net-zero plan, with many not having started. My advice on what the first step should be is to measure what you do today before making any changes.

Measuring Carbon Emissions/Carbon Footprints today will provide SMEs with the insight to make immediate and longer-term changes to their business practices, reducing emissions but also potentially reducing costs and enhancing business resilience.

An August 2021 survey by the British Chambers of Commerce (BCC) and O2 showed that 22% of small businesses don’t fully understand the term ‘net zero’ and just 9% were measuring their carbon footprint.

Knowing how much carbon a business produces is an important first step. It is not yet required by law but taking steps now will prepare businesses for future changes. Use this Carbon calculator from The Carbon Trust

The results from the Carbon Calculator will act as a baseline measurement and the next steps are:

• Identify changes that can be made to reduce the carbon footprint

• Set targets to reduce the carbon footprint
• Track progress.
• Zero Carbon Business has a very helpful tool which provides a net-zero plan tailored to the Industry sector and geographical location Become a net-zero business - Zero Carbon Business

As well as reducing emissions there are also other wider benefits to the business including:

• reducing costs in areas such as energy and transportation

• qualifying for tax benefits
• being ready to meet environmental regulations as and when they come into force.
• increase the likelihood of attracting new customers and investors who want to work with organisations that are committed to a sustainable future,
• helping those in the supply chain meet new targets (Scope 3 emissions I will save for a future article)
• Increasing the ability for a business to attract and retain employees who care about the environment.

As well as carbon footprint you can report on other environmental matters including water, waste and biodiversity and further guidance can be found in the Governments Environmental Reporting Guidelines.

So, whilst it may currently be at the bottom of your to-do list, I urge you to spend a bit of time taking the first step and measuring.

IEMA’s corporate partnerships program is here to support existing and new SME partners in demystifying Environmental Sustainability and Net Zero through skills development and training. If you wish to discuss what we can do to help, please get in contact with the team [email protected] for details