Recent research from BSI (British Standards Institution) has explored net zero awareness amongst UK SMEs. The most recent edition of BSI’s ‘Net Zero Barometer’ surveyed over 1,000 SME leaders in the UK to record attitudes and progress on the journey to net zero. The study, now in its third year, found that the number of business leaders acknowledging the importance of net zero has almost tripled since the survey began[i]. According to the report, more than four in five SMEs now show awareness and understanding of how crucial net zero is, with 82% of business leaders saying sustainability and net zero is important- this is up from just 30% in 2021. Those who claimed they had full awareness of the meaning of net zero, alongside ‘a true understanding of The Climate Change Act’, doubled over the past two years, from 21% in 2021, to 43% this year. Additionally, the vast majority- 79%, said they were ‘extremely confident’ or ‘slightly confident’ that they know how to reach net zero.
Yet even with this increase in net zero know-how, SMEs are failing to turn their understanding into measurable action. For example, BSI found that while 52% of respondents said they had a net zero policy of some sort, only 20% are measuring progress towards net zero in a standardised way.
BSI identified that many, but not all, SMEs are taking action on so-called ‘easy wins’ in the drive towards net zero. For example, easily enacted changes that can be made across their organisations, such as reducing waste (44%), reducing energy consumption (39%), switching to LED lightbulbs (38%), moving to clean energy sources (25%), insulating buildings (23%) and installing their own renewable energy source (16%)[ii]. However, the same action is not being taken on measures which will impact longer term. As we mentioned earlier, only a fifth (21%) of small businesses have set a net zero policy, 17% have published a policy, and only a fifth stated they are measuring their progress towards net zero in a standardised way.
Of the strategic actions being taken, the most common were providing training for staff on net zero targets and initiatives (24%), using standards to help reach net zero targets (24%), and promoting green achievements to customers and suppliers (24%). But, concerningly, almost a fifth (17%) said they hadn’t taken any of the actions listed in BSI’s survey.
It ties in with research last year from Sage and the ICC (International Chamber of Commerce), where their survey of 2,000 businesses found that half (53%) said environmental sustainability is either “a priority in” or “central to” their strategy and operations, with the most common actions being taken, including reducing waste material and improving energy efficiency. Yet, 90% of the businesses surveyed said they face barriers to taking climate action, with the most common barriers being financial constraints and difficulty finding the right solutions[iii].
The research delved into some of the constraints SMEs face in reaching net zero, and it may come as no surprise that the cost-of-living crisis emerged as the biggest risk to net zero commitments. Almost two-thirds (63%) of business leaders said this was the biggest geopolitical event that could set back their net zero commitment, followed by the energy crisis (50%) and uncertainty over the government’s commitments to the 2050 net zero target (34%). Interestingly, 33% said legislation is their biggest driver in the transition to net zero, highlighting the role government has to play in helping SMEs adopt change.
As we previously reported, a separate study by financial services provider Novuna, which polled 1,228 decision-makers at SMEs, found that 80% of survey respondents said they do not believe that the national government or local authorities are doing enough to champion the need for climate action from small businesses. Furthermore, when considering the actions businesses could take to achieve net zero, fewer than one in five SMEs said the Government had been influential in helping identify steps or measures they could take to reduce emissions. Respondents also suggested that they wanted more guidance on engaging suppliers, with almost a third (28%) saying that the UK Government would do well to publish guidelines on supplier engagement in decarbonisation[iv].
BSI’s director-general of standards, Scott Steedman, summarised: “This year’s barometer gives me cause for optimism. With 82% of business leaders telling us that sustainability and achieving net zero is important to their business practice, we are seeing a growing commitment to decarbonising by 2050, along with confidence that it is meaningful to turn long term ambition into immediate action.
He added, “At a time where the attention of many SME leaders is being diverted by economic pressures, they want help to navigate a path that is both credible and realistic. SMEs want to understand both where they are on this journey, and what that transition means for them and their stakeholders.”[v]
[i] BSI_Net_Zero_Barometer_Report_2023.pdf (pardot.com)
[ii] Ibid
[iv] Ibid
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
