There are 6 million small businesses in the UK. They account for 99% of the UK’s enterprises and employ 60% of the UK workforce. They generate £2.2 trillion of revenue for the economy.
Unfortunately, I think that the government is overlooking the potential power of small businesses to help reach our national net-zero goal.
Many large corporates have hit the headlines for making net-zero carbon and sustainability pledges over the past couple of years.
Understandably, the news doesn't make headlines when a small business decides to cut its carbon footprint.
But if every entrepreneur in the UK could achieve net-zero emissions by 2050, then imagine the impact.
Don’t overlook small businesses and the big role they could play in our sustainable future
Not at all appealing
The Climate Change Committee published a report in December 2020 titled 'The role of business in delivering the UK’s Net Zero Ambition'. The report recognises that the private sector must take a leading role.
As with all CCC documents, it’s comprehensive and offers some clear insights into the effort required to hit that 2050 target.
But the language doesn’t appeal to small businesses. Referring to ‘UK plc’ leaves out those six million ‘Ltd’ companies and sole traders.
And while it is reasonable to suggest that a business decarbonises its operations and leverages procurement, that probably doesn’t speak to the vast majority of SMEs who employ between 0 and 10 people.
A search through most of the CCC documents and the government’s Green Industrial Revolution publication shows that there is currently a significant gap in communications where 99% of the country’s enterprises sit.
It is a shame because the will to adopt sustainable methods is undoubtedly there.
Good commercial sense
The Federation of Small Business (FSB) encourages its member to “Grow your business, shrink your carbon footprint.”
It is a powerful message and one that consumers are getting behind. A recent study by Deloitte found that more consumers buy locally from small businesses and favour those with firm environmental commitments.
Being more sustainable therefore makes good commercial sense for many SMEs.
What’s more, small businesses often work for larger ones. They are part of the supply chains that make up the carbon footprint of those big corporates. Look at the construction sector. The large contractors make laudable commitments to net-zero goals.
But the vast majority of businesses serving those large contractors are micro-businesses. In fact, according to the FSB, almost 20% of all SMEs operate in the construction sector.
As a result, small businesses that provide services to larger corporate customers will have to consider their carbon footprint.
Small businesses can have a big role
The question is, how can they achieve that?
The government is examining options for supporting householders to adopt low-carbon heating. The public sector has received rounds of funding to switch to electric heat. And there are plans to apply a carbon tax to large emitters.
SMEs fall between all of these categories, leaving them vulnerable to missing out on the benefits of low-carbon operation or to making ill-informed decisions.
Small businesses have been hard hit in 2020 and 2021. But SME owners are nothing if not resilient.
Statistics from the government show that a growing number of people in the UK are now working for themselves. So their potential to make an impact on the Net Zero objective is also increasing.
Let’s not overlook small businesses and the big role they could play in our sustainable future.