While sustainability is a top priority for businesses of all sizes, small to medium businesses may face unique challenges in implementing decarbonisation strategies. Here are some key steps that small to medium sized businesses can take to get started.
For small to medium enterprises (SMEs), of which there are 5.5 million in the UK, the need for sustainable change is evident – but it is difficult to turn words into actions. According to a February 2023 study from the British Chambers of Commerce (BCC), almost four in five (79%) of SMEs polled were taking action to reduce their carbon footprint and increase efficiency, but understanding what that entails, such as developing plans for reaching net zero, is far more likely in businesses with more than 50 employees.
So if you are starting from a completely blank slate, here are a few tips and steps which can help your organisation on its way towards a more sustainable and carbon-free future:
What is net zero, what are the benefits and what else should I consider?
According to the UN Net Zero Coalition, net zero is defined as reducing greenhouse gas (GHG) emissions to as ‘close as zero as possible’, and then offsetting remaining emissions by re-absorbing them from the atmosphere, for instance by oceans and forests.
The Paris Agreement, adopted in 2015, mandated that any global temperature increase must be limited to no more than 1.5 °C compared with the pre-industrial era. The upshot is that, based on the Intergovernmental Panel on Climate Change (IPCC), to hit this target, net zero emissions must be fully brought in by 2050.
The race is therefore on. Business benefits of net zero, as per the British Business Bank, can range from the financial and practical, such as lowering running costs and qualifying for tax benefits, to the more theoretical and wide-ranging, such as maintaining competitive advantage, attracting new customers and investors, and building a better supply chain.
Some struggle with the short-term viability of such initiatives for SMEs for productivity reasons, as the BCC survey showed. A small retailer told the survey, for instance, that electric vans had too limited a range to be effective for their business. Shevaun Haviland, director general of the BCC, described the findings that a sizeable number of firms think investing in green tech will damage their productivity as ‘alarming’.
There are other organisations and standards you will need to be aware of. SBTi (Science Based Targets) has a Corporate Net Zero standard as the world’s only framework for target-setting in line with climate science. Many companies espouse science-based targets, including Electrolux Group. Another standard, with particular regard to SMEs, is B Corp, where companies are assessed on their entire social and environmental impact. The majority of the more than 4000 B Corps are SMEs.
Who should you talk to?
Decarbonisation and net zero is a team effort. There are various stakeholders and organisations you can consult before outlining a feasible strategy.
Business and commerce groups have dedicated resources in place. The Federation of Small Businesses (FSB) has an information hub, as does the SME Climate Hub. The BCC has a Net Zero Hub as well as an interactive Zero Carbon Business tool. The BCC survey found almost half (42%) of businesses thinking about net zero will speak to them, and a further fifth (19%) will consult their banks, lawyers, or accountants.
Just as important are senior executives. A decarbonisation strategy is not feasible if it does not have buy-in from the board. Mike Sewell, plan zero director at professional services company Mitie, outlines ways in which to wipe away any cultural indifference to net zero strategies. You need to articulate the facts and figures behind any threats – such as the UK government fining organisations for breaching schemes launched to reduce GHG emissions – but also outline the opportunities.
In other words, speak their language. “You need the data to back up the benefits,” explains Sewell. “If I showed you an LED lamp that uses 25% less energy and said I was going to install 2,000 of those in your building, you’re going to understand the saving – but not all technologies are this simple.”
What are examples of initiatives to implement?
Installing LED lamps are one of many pieces of low-hanging fruit you can implement to get started. Sewell calls these ‘small but powerful changes’ and include removing single-use plastics, adding recycling points, and offering on-site charging for electric vehicles.
According to the BCC research:
- More than two thirds of SMEs (69%) had installed LED lighting
- More than a third (34%) are investing in greener vehicles
- Almost half (46%) are using recycling and waste management strategies
- Just under a third (30%) are using solar panels.
Rin Hamburgh, founder and creative director of brand copywriting agency and certified B Corp RH&Co, outlines the difference between saying and doing when it comes to recycling. The company had always recycled, but now has a metric in place to assess the proportion of landfill versus recycled.
How do I turn this into a strategy?
Oxford Net Zero, a research initiative based on the University of Oxford’s longstanding work on climate neutrality, offers a simple five-step guide to help organisations commit to net zero:
1) Pledge. Pledge at the head of organisation level to reach net zero GHGs as soon as possible in line with global efforts. Set an interim target to achieve in the next decade, while targets must cover all GHGs, including Scopes 1, 2 and 3 for businesses and other organisations
2) Plan. Publicly disclose a transition plan and include what actions will be taken within the next 12 months, two to three years, and by 2030
3) Proceed. Take immediate action through all available pathways toward achieving net zero consistent with delivering interim targets specified
4) Publish. Report publicly both progress against interim and long-term targets, and initiatives, at least annually. Report in a standardised, open format
5) Persuade. Within 12 months of pledging, align external policy and engagement to the goal of halving emissions by 2030 and reaching global net zero by 2050
The group has also outlined practical tips for carbon offsetting. These can be summarised as cutting emissions, using high quality offsets, and regularly revising offsetting strategy as best practice evolves.
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