SMEs call for greater government leadership in race to become net zero

New research suggests small businesses are maintaining a commitment to tackling the climate emergency despite the immediate economic challenges they face – but many would like to see government take more of a lead to encourage and support the green initiatives of small enterprises.

Despite the tough economic climate, 85% of UK small businesses are working hard to put green issues higher up the agenda within their enterprise. Nationally, 17% have green issues on the agenda for senior management meetings, 17% run green incentives for their staff, 21% encourage staff ideas on green projects and 16% run staff education programmes on the urgency of climate change issues.

These positive steps continue despite the seismic barrage of economic challenges faced by small businesses today, who cite their top worries being: the rising cost of living (47%), rising fuel prices (34%), the economic impact of Covid (34%) rising interest rates (24%) and long term-impact of Brexit (23%).

Whilst small businesses want to do more to become green and work towards Net Zero, many believe the government could be doing more to help them.

  • Thinking about cutting carbon emissions in the community, only 20% of small business owners believed the national and local government were doing enough to champion the issue.
  • Looking at the challenge of how to become carbon neutral in their supply chain, small businesses were most likely to call on the government to do more to help. Nationally, 28% of enterprises felt the government should give small businesses clearer guidelines on what steps they can take to help supply chains become greener. This was most strongly felt in three sectors – transport and distribution (40%), medical services (39%) and manufacturing (36%).
  • For those businesses where staff had returned to the workplace, there was a stronger belief that the government should give clearer guidelines and advice on how small firms could make their supply chain greener (33%, compared to 22% of enterprises where staff worked from home).
  • When reflecting on specific business initiatives that could be undertaken in order to achieve Net Zero, less than one in five enterprises said the government had been influential in helping them thinking more positively about a range of green issues they could consider. Only 20% of small business cited the influence of government advice on their move to use renewable energy. The figure was even lower when it came to presenting the case for electric vehicles (19%), using less packaging (12%), cutting down on business travel (11%) or weighing up the relative benefits of staff car sharing schemes (9%).
  • Thinking about the mindset sea-change required to achieve carbon neutrality, small business owners were asked where this process needed to start. Whilst 23% of respondents said they took ownership on themselves – to drive change and influence others – small businesses were most likely to say it was down to the government and major businesses to lead change – and when they led, small businesses would follow (27%).

Joanna Morris, Head of Insight at Novuna Business Finance comments: “Successive governments have done a great deal to support Net Zero and the green agenda but, despite the current and immediate economic challenges, now is the time to maintain a focus on the climate commitments made in recent years. The global debate on climate change often focuses on major businesses and their role as change agents. Yet it is clear from our research that the small business community has a vital role to play. Combined they employ three fifths of the UK workforce and their relative size and agility means they can adapt more quickly. Furthermore, whilst many small businesses are making good progress on the road to becoming Net Zero and sustainable, they expect government to take a lead – to devise policies, offer support and frame guidance that small businesses can follow.”