How can SMEs prepare for net-zero?

A recent survey by Lloyds Banking Group of more than 1,000 small and medium-sized businesses (SMEs) across the UK has revealed that four in 10 are unsure of how the Government’s commitment to net-zero by 2050 will impact them, never mind the role they play in reaching the goal.

More than nine in 10 respondents said they see environmental sustainability as an important issue for their business and sector, however it also revealed that many businesses are unsure as to what best-practice on climate action looks like for them. One-quarter of respondents said they are not aware of the UK’s net-zero commitment and 40% said they did not know what net-zero would mean for their business, struggling to name potential benefits.

These are worrying statistics. Businesses are responsible for around 18% of all UK emissions* and with SMEs making up 99% of those businesses, it can be said that the role they play in reaching net-zero is vital.

What is net-zero?

Net-zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. Net-zero is achieved when the amount added is no more than the amount taken away.

In 2019, the UK became the first major economy to pass a net-zero emissions law. The target will require the UK to bring all greenhouse gas emissions to net-zero by 2050.

Since 1990, there has been a 49% drop in total greenhouse emissions, but it’s now time to consider how the further 51% can be reached. It is achievable, but it requires immediate action across all key technologies and policy areas, and full engagement across society and end consumers.

Why must SMEs play their part in net-zero?

There is no denying that SMEs need to play their part in the race to net-zero, being the fourth largest contributor to greenhouse emissions, only recently marginally falling behind residential. But besides the obvious reasons, going green can boost your bottom line, making financial sense. Customers’ expectations are also changing, more and more they are looking for businesses to be doing their bit towards the fight against climate change, and without committing to Net Zero, you’re potentially opting out of future trade. 

What steps can I take?

Internal

There are steps you can take internally to combat Scope 1 and Scope 2 emissions.

Scope 1: Direct emissions the organisation is responsible for.

Scope 2: Indirect emissions from purchase of electricity, heat or steam.

Measure your current impact: It is important to understand your current impact, this way you can look at tackling it. Ask yourselves: What do you do that impacts the environment? Both the Carbon Trust and Energy Savings Trust have online calculators that you can use to calculate your emissions. 

Target: By measuring your current impact, you can then set appropriate targets. Be realistic, small achievable changes are a great start.

Reduce: Identify where you can be more efficient. Start to consider where you can make a real difference. Waste reduction and using less is not only good for the environment, it is also good for your bottom line.

Renewable: Switch to renewable energy. Switching to a genuinely renewable energy source can save a lot on your emissions.

Invest: How can you invest money? Invest into your own type of generation such as solar panels.

External

Looking at external factors can help tackle scope 3 emissions.

Scope 3: Indirect upstream and downstream emissions. Including logistics and distribution, end of life, use of product, investments, leased assets etc.

Procurement: Who are your suppliers? What are their Net Zero ambitions? Are they truly doing all they can, and if not, can you switch?

Logistics: How do you deliver your products? Is it sustainable?

Packaging: Is your packaging sustainable?

End of life: Can you control what the consumer does end of life?

Use of product: Can you control how the customer uses the product?

The importance of Energy Management

When looking at energy efficiency, employing an effective energy management system is crucial. Energy management is the process of monitoring, controlling, and conserving energy in a building or organisation.

1. Meter your energy consumption and collect the data – You can do this via a Smart or AMR meter – speak to your supplier about getting one installed.
2. Find opportunities to save energy – by doing this you should be able to identify the ways in which you can save both money and energy. If you are unsure, speak to your energy supplier who should be able to advise you.
3. Take action – Big and small steps both make a difference. This could be as simple as turning lights off on an evening to upgrading your machinery.
4. Track your progress and repeat

Our transition to renewable energy began in 2017 with the supply of Green Gas from 100% renewable UK sources, as an alternative option to customers and we are continuing to look to expand our offering further.  If you would like to speak to us about green gas and the options available to your business, please give us a call on 0131 610 8868.

*2020 UK greenhouse gas emissions, provisional figures March 2021 conducted by BEIS