Almost half of all UK SMEs do not have anyone leading their sustainability efforts, and around four million have no strategy to decarbonise their operations, according to a new report.
The study, by Rimm Sustainability, a global B2B sustainability solutions provider, surveyed 150 SME leaders from different roles such as CEOs, CFOs, CSOs, and CMOs to understand the state of UK businesses on the road to net zero.
According to the study, almost half (45%) of SMEs, do not have anyone in charge of their sustainability efforts, while only under one quarter (19%) have a c-suite or board-level executive who is tasked with pioneering their sustainability efforts.
Accounting for 99% of all businesses in the UK, the report argues that SMEs may hold the key to unlocking a carbon-free future for the country, yet the study suggests that almost two-thirds (63%) of do not have a sustainability plan in place, and less than half (43%) have not sought more sustainable practices.
Ravi Chidambaram, chief executive officer and founder of Rimm Sustainability, said: “Without proactive action by businesses big and small the UK will not reach its collective targets. While undoubtedly the biggest businesses and polluters have the most work to do, small businesses, of which there are 5.5 million in the UK, must play their part too.
“It is worrying to see that still today, 45% of UK SME leaders haven’t tasked anyone in their business with improving sustainability, or even taken the lead themselves.”
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The road to net zero
When asked about existing net zero strategies, only a quarter (26%), or 1.4 million, have a complete climate reduction plan in place, while 6% do have a plan, but only in draft form. However, despite this, a majority (77%) of surveyed SMEs did state that reducing the environmental impact of their business is a priority.
When asked to rate their progress to net zero between one and ten, well over half (64%) of the respondents score themselves over five, with 36% rating their progress between six and ten.
While net zero plans are few and far between, SME’s look to be implementing sustainable practices, with almost all surveyed SMEs saying they had researched ways of reducing their wastage and had gone on to implement a solution, with 69% reporting that their solution was successful, 51% also claimed to have successfully reduced their energy consumption, and more than one in three (35%) had reduced their water consumption.
Where are SMEs struggling
More than half (59%) of respondents described themselves as unclear on what is required to reach net zero, with one in six (14%) specifying a lack of knowledge preventing them from advancing their sustainability agendas in general.
Elsewhere, 50% of the SMEs pointed to a lack of funding as the main obstruction towards greater sustainability, a common theme during current economic headwinds. For those who are implementing net zero strategies, 19% claimed their efforts had not produced any measurable impact on their sales and revenue, and 11% reported that their costs and overheads had actually increased.
Finally, one in three (33%) attributed a lack of time to their stalling net zero strategies, and almost a quarter (25%) say they have no plans to become greener as it is neither a regulatory nor a legal requirement.
“While business trading conditions are tough, improving business practices can save money, as well as make companies more desirable to work with to potential customers.” comments Chidambaram. “The benefits of green practices outweigh anything else.”
Mr Chidambaram said: “SME leaders have a multitude of challenges to contend with however thinking smart and using a partner to measure, report and improve on sustainability is simple. There are now many cost-effective and even free ways to review things like your business’s carbon footprint and improve on it, as well as more advanced tools using AI and learning materials. SME leaders have little excuse not to embrace a greener future.”
The report concluded that there is a clear need for more support and guidance for SMEs on their sustainability journey. It recommended that the government should provide more funding and tax breaks for SMEs that invest in sustainability, and that it should work with industry bodies to develop more resources and tools to help SMEs measure and reduce their emissions.
You can read the full report here.
