Small businesses unprepared to reduce their emissions

New research from Lloyds Bank Business found that over three-quarters (77 per cent) of small businesses do not have – or are unsure of – their business strategy to reduce their carbon footprint in the next three years.

With over 5.5 million small businesses in the UK this could equate to more than 4.2 million having no plan on how they will contribute to a more sustainable future.

Small business owners and managers said a lack of knowledge (34 per cent), finance (25 per cent) and time (25 per cent) were the main barriers to having a defined sustainability strategy.

The research also found that up to 2.5 million business owners do not know what is meant by ‘net zero’. The definition of achieving a balance between the carbon emitted into the atmosphere and the carbon removed from it, was only known by half (47 per cent) of respondents.

Just one in 10 (12 per cent) small businesses know their carbon footprint and only a sixth (15 per cent) know how to calculate it by converting the expected greenhouse gases generated through activities, such as using energy to heat office space or using fuel to transport goods.

Eight in ten (81 per cent) business owners recognise the importance of being more sustainable, with 68 per cent also aware that the UK Government has set targets to reach net zero. Although, the research showed 40 per cent do not think there is enough support available to realise these ‘green’ ambitions.

Adam Rainey, commercial director of business banking at Lloyds Bank, said: “While our nation’s small businesses recognise the importance of tackling climate change, there are real issues with understanding how to get there – including calculating carbon emissions and even the meaning of net zero.

“Fortunately, there’s a whole host of support available to help businesses make their first steps in becoming greener, from getting started with electric vehicles, practical guides to help reach net zero and tools to calculate potential energy savings at business premises. We know it can seem daunting but some really simple things, such as reducing travel and recycling, are also great places to start.”

Younger business owners – those under the age of 35 – are most likely to be concerned about their carbon footprint (50 per cent) and a third (34 per cent) know how to calculate it, 19 percentage points above small business owners as a whole. For older business owners – those aged over 55 – just under a third (29 per cent) admit to having carbon concerns and are the age group least likely to know how to calculate their carbon footprint (11 per cent).

Businesses are also unconvinced that the UK government’s climate targets will make the country greener anytime soon, with two thirds (64 per cent) doubting they will see a difference within their lifetime. The reservation that change will happen, alongside resistance in taking steps to make it happen, appear to be preventing business owners from shifting to a net-zero mindset.

The government has support for business in the journey to net zero. In May 2021, they launched the UK – SME Climate hub (businessclimatehub.org). Businesses can sign up for free and get regular information to support the journey to green.