Small businesses behind a third of the UK’s emissions, but lag in net zero fight

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UK small businesses are responsible for nearly a third of the country’s greenhouse gases, yet lag behind their larger counterparts in emissions reduction efforts.

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Smaller 3% of small businesses said they had measured their carbon footprint and set an emissions reduction target at some point in the past five years.

data comes from a survey British Business Bank A government-backed institution that supports small and medium-sized companies.


Its chief effects officer, Shanika Amarasekhar, warned that companies that sell to big businesses could start losing contracts if they don’t cut emissions as big companies work to rid the supply chain of carbon.

“What is going to happen in the future is that they will be part of the supply chains of big businesses that are going to meet those demands of them,” she said.

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“It’s becoming a license to operate. It’s going to be the competitive differentiator for small businesses.”

Big business has been falling apart in recent months with the government’s pledge to cut net emissions to zero to slow climate change.

Yet small businesses are lagging behind their larger rivals. And together they account for almost half of all emissions from businesses, making it just as important that they decarbonize if the UK is to meet its targets.

“More than half of small businesses say they are unwilling to prioritize decarbonization, so clearly more needs to be done,” said the bank’s chief executive, Catherine Louise La Torre.

Still, she said, 11% of companies have taken loans to drive fund moves to net zero, while 22% said they were ready to do so.

Some businesses will also use their government-backed emergency Covid loans, which were administered by the bank, to fund their net zero infections, she said.

But lenders will also need to take steps to ensure that companies make more money available to reduce their emissions.

“If you think about the 1.3 million businesses that would consider external finance, that should be an opportunity for the private sector,” she said.

While 94% of companies said they have taken at least one action to reduce their emissions, their efforts often do not go away and may simply be to install a smart meter.

Of those who took action, 51% said they did it because it made financial sense.

The bank found that 52% of small businesses in the UK are in the “carbon satisfied” or “carbon exposed” categories.

This means that these companies have an attitude towards the climate that reacts to what is happening around them, or is simply left untouched in the direction of emissions reductions.


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