27 Jan Preparing businesses for the transition to net zero
At the end of last year, the Government renewed its commitment towards the UK reaching net-zero with a ten-point plan for a green industrial revolution. BSI partnered with IEMA to investigate how businesses plan to face these challenges and what progress there has been on the path to net-zero.
The comprehensive survey suggested that if businesses continue at the current rate of progress, it is likely we will fall short of reaching our net-zero targets for 2050. The findings indicated that only around 20% of small businesses have committed to a net-zero target. The high volume of small companies accounts for most UK businesses and over half of the business-related emissions.
The report by BSI referred to as the Net Zero Barometer highlighted several key areas:
- While knowledge of net-zero has grown, the understanding of its implications for businesses remains very low. Over 60% of respondents were not confident that they understood the impacts net-zero would have on their business.
- There is genuine support for reaching net-zero, with 70% of businesses confirming they are making or planning to implement commitments to reach net zero.
- Over 80% of UK businesses believe they require more support and guidance to reach net-zero targets.
- Energy reduction measures is the most prominent area of focus considered by businesses to achieve net-zero.
- Cost is regarded as the biggest barrier to reaching net-zero, particularly for smaller organisations.
- Of all the sectors researched, healthcare and education have the lowest awareness levels and commitment to net-zero targets.
- The pandemic has had a profound impact on progress towards net zero, with nearly 70% of businesses stating that their plans have been hindered by Covid-19.
Since the government committed to reaching net-zero carbon emissions, many larger businesses have made their own public announcements, yet the general understanding of the target varies greatly. An increased number of measures to support businesses in transitioning towards net-zero has resulted in the requirement for greater support, and guidance on net zero. As technology and understanding involve, the proliferation of new options created a need for additional support in implementing the correct strategy. This is where best practice procedures come into play and provide a shared understanding, instead of implementing a ‘one size fits all’ approach.
With so many options now available, its imperative businesses understand what measures will facilitate and enable us to reach our net-zero goals. Just over 30% of those surveyed acknowledge the BEIS definition of net-zero, which involves reaching a balance between remaining emissions and capturing atmospheric carbon. The research suggests there are multiple views on what a business needs to do to achieve net-zero. Awareness of net-zero may be increasing, but those with a clear understanding of the target are very much in the minority, with only one in ten confident they understand net zero and the implications it will have on their own business.
A general perception in the business world is that smaller businesses will find it more challenging to implement the necessary changes to reduce their carbon footprint and reach the net-zero target. There is an assumption that fewer available resources and rising economic strains from the pandemic and Brexit may hinder their potential to plan and deliver a net-zero strategy.
New developments such as the Task Force on Climate-related Financial Disclosures (TCFD) created by the Financial Stability Board have driven corporate responsibility to the forefront of transformation plans. To deliver a transparent and credible commitment to net-zero, businesses should share information on annual carbon emissions, along with their reduction and offsetting plans.
There is a large disparity between businesses which intend to reach their net-zero target by 2030, and those which are yet to make any commitments. Further studies are planned to understand what barriers may be hindering their commitment to net zero. Unlike many other business-related goals, net-zero does have a finishing line. The 2050 target provides businesses with clear data and a structured timeline to create and implement their plans. The data from the report suggests a rather mixed response in the UK business community. While there is a genuine desire to reach the target, there is a lack of knowledge of the details concerning net-zero and its implications on business activity. There is a clear need for more resources and information to support businesses, translate their goals into practical measures and enable them to reach their targets.