SMEs unaware of how net zero will impact them - report

Millions of the UK 's small businesses could struggle to understand and meet the demands of achieving net zero goals, according to research by Lloyds Bank.

Despite the impacts of the last year, sustainability has remained an important consideration for 91 per cents of SMEs. In fact, almost half (45 per cent) say that the pandemic has made them think more about its role in their business.

Nevertheless, a significant proportion of these businesses reported that they did not know enough about how the UK 's net zero goals would impact them.

Considering that the legislation passed in 2019 on the reduction of UK net greenhouse gas emissions by 100 per cent by 2050, only a quarter of SMEs reported being aware of this commitment and the role they will play in achieving it.

In addition to the themes across all sizes of SME, the research showed a consistent pattern when looking at how the size of business affected results. In every instance, the smaller the business the less likely they are to be in a position to adapt to and benefit from a Net Zero economy.

When looking at the progress made towards net zero so far, almost half of the smallest businesses surveyed (10-19 employees) said they have no commitment, nor any current plans to commit, to Net Zero, compared to just 5 per cent of the largest SMEs.

Glenn Bemment (pictured), head of ESG, SME & Mid-Corporates at Lloyds Bank, said: “The larger a business is the more likely they understand and grasp the opportunities that come from Net Zero.

“Their size affords them greater flexibility within their business model and workforce, greater choice and influence over suppliers, and can mean more customers and clients directly questioning their sustainability credentials.

“For the smallest of SMEs, many of which will be focused on their immediate needs and recovery from the impact of the pandemic, it 's important not to lose sight of the value they themselves recognise in sustainability. Demand from government, customers, and suppliers to be ethical, and sustainable will only increase and eventually become expected rather than a unique selling point.

“The good thing is that there is still time for them to act, and there are many resources available to help them understand, plan and change their business for the better.

“Whether it is through the Lloyds sustainability hub, government websites, or trade and industry bodies, tools and guidance are available. ”

SME 's can take advantage of resources such as Lloyds ' Sustainability Hub when looking for information on net zero and business impacts.

For more information, click here.