A detailed briefing setting out how Britain’s SMEs can join the government’s race to a net zero emissions economy has been released by a newly-formed banking alliance.
It argues that banks and government policy makers need to ensure small businesses are “not forgotten or left behind” but are supported with financial incentives, access to high quality information and a standardised approach to measuring success when it comes to achieving carbon goals.
Without a long term plan to provide certainty and support for SMEs, the government puts them at risk of being unable to keep up with expanding climate policy, while also threatening achievement of the climate goal of zero emissions by 2050.
The briefing, from Bankers for Net Zero is the product of more than six months consultation and identifies areas where action is needed, for example, incentives such as lowering their cost of capital by offering “green” financial products and services that reward businesses that invest in decarbonising their operations with lower interest rates.
Another was access to high quality trustworthy information, including advice on how to measure their carbon footprint and standardising approaches to measurement and reporting of progress.
The government, they argued, should announce a comprehensive strategy that tackles all three of these issues at once, the briefing argues, insisting that a piecemeal approach will not work.
This is a golden opportunity to take what has been an extremely difficult year for our country’s SMEs and turn it into something positive
The report highlights the fact that SMEs account for 99 per cent of British businesses, are responsible for 52 per cent of the UK’s turnover and employ a quarter of the total UK population.
To leave them behind, it argues, would result in the UK Government not meeting its legally binding target to reach net zero emissions by 2050.
One of the alliance’s founders, Louise Kjellerup Roper, CEO of Volans said: “This is a golden opportunity to take what has been an extremely difficult year for our country’s SMEs and turn it into something positive.
“We need to help them come through the Covid-19 crisis as greener and more sustainable businesses, complying with increasing regulation and responding to growing consumer demand for action on the climate crisis.
“It will be a win-win for businesses and the environment. No SME should be forgotten or left behind in the UK’s transition to net zero. We will not get to net zero as a country without SMEs taking action now.”
Banks must now step up and provide targeted products, guidance and signposting for their SME customers
Richard Winder, Head of External Affairs at Handelsbanken said that many SMEs, especially privately-owned or family businesses, have operated responsibly in their communities for generations.
“Emerging from the pandemic, they will be keen to play their part in tackling climate change, while securing their long-term business prospects,” he added. “But planning the most sensible transition route and investment strategy is a challenge.
“We believe that access to reliable, comprehensive guidance and appropriate incentives will spur the widespread engagement needed, with banks on hand to provide the finance their SME customers require.”
Simon Crichton, Head of Relationship Management, Triodos Bank UK added: “We have long recognised the role of banks to act as much more than neutral finance providers, and to take seriously their responsibility in driving positive social and environmental change.
“Banks must now step up and provide targeted products, guidance and signposting for their SME customers. However, we will only realise our Net Zero ambitions if these actions are underpinned by co-ordinated resources and support from government and other providers.”
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