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What does COP26 mean for UK SMEs?


Over half of the UK’s largest businesses have committed to moving to net zero by 2050, represented by 60 of the UK’s FTSE 100 companies, making Britain’s economy the current leader in the world’s transition to lower carbon output.

The UK’s proposed plans include requesting most big firms and institutions present detailed plans to officials and the public by 2023 on how they will hit the climate change targets set at COP26.

A significant number of the UK’s SMEs have pledged to take part in the UN’s Race to Zero campaign in the run up to COP26 but what does the net zero goal really mean for small businesses?

Small to medium-sized businesses account for almost 50% of UK business emissions, standing at the same level as larger corporations that have already begun to make the necessary plans and changes to reduce their impact on the planet. However, SMEs face a very different challenge to big businesses in the journey to net zero. According to the British Business Bank, while environmental and sustainability awareness amongst small business owners has improved, 35% of small businesses state cost as a barrier for reducing carbon emissions.

Many small businesses are not only restricted by a lack of funds but also by strict tenancy agreements, established business models, and access to critical technology. For many small business owners, they simply do not have the knowledge, understanding, or money to make the changes to build more sustainable businesses, even if it is a change they are determined to make. Only a small percentage of UK SMEs are even aware of their carbon footprint and or have checked their carbon emissions at all in the last five years.


“Businesses both large and small, across all sectors of the global economy, have a crucial role to play in both reducing their environmental impact and developing the green technologies that will set us on the path to net zero.” Lee Rowley, Business and Industry Minister


It is easy to be overwhelmed by the goals and statements being made at COP26 but there are huge benefits for SMEs to commit to the net zero goal sooner rather than later. Reducing their carbon footprint can help a business cut their costs and save money on their utility bills, travel costs, and on materials that are eventually discarded. Switching to renewable energy providers, going paperless, and reassessing how employees commute to the workplace are great first steps a business can make to going net zero. Consumers are also demanding more and more proof that businesses are trying their best to be sustainable and environmentally friendly. It has become a top value for a growing number of customers, especially amongst the millennial and Gen Z generations, that small businesses are dedicated to reducing their impact on the planet.

Th reality is that it may soon become a matter of being able to trade or not. As governments and larger industry players become more and more serious about reaching the net zero goal, SMEs might have to prove they are actively working to reduce their carbon footprint, or they risk losing partnerships and contracts with bigger organisations. We could be looking at a future where gaining or retaining a business license relies on owners being able to prove they are contributing as little as possible to carbon emissions.



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