More support needed to boost sustainability plans for SME’s in the UK

SME Sustainability Agenda

More support needed to boost sustainability plans for SME’s in the UK

New industry research suggests that over 30% of small and medium businesses in the UK have no plans in place to implement a sustainability strategy, despite the national commitment to reaching net-zero carbon emissions by 2050.

A YouGov survey produced on behalf of energy business World Kinect Energy Services discovered that while 40% of UK SMEs don’t have a sustainability plan in place, approximately 30% have no intention of implementing a sustainability plan. This figure compares to 53% of SMEs who have confirmed they have plans to comply with 2050 emissions targets. The findings suggest that 34% of businesses have been capable of achieving any of their planned sustainability targets. A further 25% of businesses stated that the pandemic has had a significant impact on their intention to adopt more sustainability measures.

Therese Gjerde, the senior director of global sustainability at World Kinect explains that while it may be concerning that nearly 40% of SMEs in the UK do not have a sustainability plan in place, the most worrying finding is that 30% of these businesses do not intend to implement a sustainability strategy. Gjerde highlights that often SMEs are not regarded as being very relevant in terms of the larger net-zero goals, but collectively they represent a significant group that needs to be considered as an essential part of the transition to a decarbonised economy.

At the beginning of 2020, Britain had just over 5.9 million small businesses, consisting of 49 or fewer employees. Small firms represent over 99% of the private sector in Britain and account for 45% of the energy consumption nationwide. 

The survey findings suggested that nearly 30% of SMEs believe the pandemic has proven to hinder progress on sustainability goals, with many businesses shifting their attention on financial survival during a considerably difficult time economically. Approximately 47% of SMEs in the manufacturing and hospitality industries said financial challenges were the biggest barrier to implementing more sustainable practices. Nearly 60% of respondents in hospitality stated that sustainability plans had been scrapped due to the impacts of the pandemic.

The findings raise questions concerning the intention and ambition to the reality of sustainability in British businesses. In a survey of UK businesses last year, the Enterprise Trust think tank discovered that over 60% of UK businesses believed the shift to a green economy offered many positive opportunities.

Beverley Cornaby of the Cambridge Institute for Sustainability Leadership stated in an interview with Forbes that businesses that lack clear action on sustainability were in danger of falling behind. Cornaby emphasised that it’s difficult to have a business decision that won’t be impacted by sustainability in some shape or form. Businesses that focus on developing customer trust through implementing sustainability measures are more likely to be more resilient to events in the future.

Cornaby emphasises that new and emerging supply chain and investment rules will mean businesses will be forced to comply with sustainability requirements. Cornaby explains that SMEs who are looking to provide services to larger corporations will have to compete on sustainability and investors and other stakeholders will increasingly look for more details on sustainability performance. Sustainability will enable new opportunities to emerge for businesses who can find ways to communicate with new customers looking for products and services that are more ethical and support sustainable, trustworthy brands.

With businesses focused on managing the pressures of the pandemic and challenges of Brexit, the UK government must implement supportive measures for SMEs in creating sustainability plans.

Policy leaders should recognise the survey findings as an opportunity to create the necessary support for SMEs. Cornaby suggests that the UK government should focus on creating a national SME net-zero strategy to enable businesses to work towards the transition to net-zero. It’s critical that the government provides measures to SME’s to make sustainability possible and not a challenge.

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