UK SMEs left behind in green reforms

February 24, 2023

Nine out of 10 UK SMEs fail to understand how the government’s 2050 net zero targets will affect their business, according to the British Chambers of Commerce (BCC). 

The survey of 960 SMEs, in partnership with Lloyds Bank, revealed small businesses’ lack of understanding could hinder the UK’s transition to a net-zero economy.  

There is also a divide between firms with more than 50 employees and those with less than 50, as larger SMEs are more likely to understand net zero targets. 

56% of bigger firms have a ‘complete’ or ‘some understanding’ of the government’s net zero target, whereas only 35% of smaller businesses do.   

As a result, larger SMEs are also more likely to develop their own targets and plans for net zero. 

36% of larger firms have developed a plan for reaching net zero; in comparison, only 19% of firms with fewer than 50 employees have done the same.

Read Minerva's previous coverage of SMEs:

https://www.old.manifest.co.uk/governance-body-flags-issues-with-european-sme-listing-rules/

The BCC stated larger SMES are more likely to understand and develop a net zero target as they have increased access to the resources needed, whereas smaller SMEs operate on tight margins.  

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.” 

Many SMEs are also reluctant to adopt greener and more sustainable operations, which could hinder the UK’s target to achieve net zero by 2050. 

SMEs often have a negative view of green technology as 21% of businesses believe it will decrease their company's productivity. 

Firms are reluctant to make improvements due to the extra costs and time required to adopt green technology.  

Even though many firms are reluctant to transition to net zero, 79% are taking action to reduce their carbon footprint and increase their energy efficiency. 

More firms are also using new technology or adopting greener policies, despite concerns and a lack of understanding. 

The survey found that 34% of firms invest in greener vehicles and 28% use renewable energy providers or tariffs. 

46% also use recycling and waste management strategies and 30% use solar panels.  

Haviland added: “There is a real danger that smaller businesses will get left behind unless politicians, banks and business leaders come together to galvanise action.”