We can help small businesses achieve net zero goals - Mark Sterritt

With February upon us, many will have set in place goals and business plans for the year ahead. While these may be quite different to some of the ambitions set out at the start of 2021, the theme of sustainability is likely to remain top among the priorities.

Mark Sterritt, UK Network Director - Scotland at the British Business Bank

November 2021 saw the arrival of COP26 in Glasgow, bringing climate change to the forefront of everyone’s agenda and highlighting that, more so than ever, it is incumbent on us all to play our part.

For the British Business Bank, it means refreshing the mission that underpins all our activity. Our new mission is to drive sustainable growth and prosperity across the UK, and enable the transition to a net zero economy, by supporting access to finance for smaller businesses.

Whatever their size, there is a clear opportunity and requirement for businesses to mitigate the impact of climate change. Our Smaller businesses and the transition to net zero report found that smaller businesses (those with up to 249 employees) account for an estimated half of UK business-driven greenhouse gas emissions – roughly the same as their larger counterparts.

Yet, more than three-quarters (76 per cent) of smaller businesses surveyed as part of the research are yet to implement a comprehensive decarbonisation strategy. Just three per cent said they have measured their carbon footprint in the past five years and have subsequently set a target to reduce their emissions. But, it is encouraging to see that the vast majority (94 per cent) say they have taken at least one action to reduce their emissions.

When taking account of all UK emissions, smaller businesses account for around one-third (29-36 per cent), underlining the large potential contribution that they can make towards delivering national net zero ambitions.

More than half (57 per cent) of smaller businesses have heard a lot, or a fair amount, about the UK Government’s commitment to reaching net zero emissions by 2050, and the implications of climate change for their companies (56 per cent). However, more than half (53 per cent) also indicated they are not yet ready to prioritise decarbonisation.

This will likely change as businesses look forward. Smaller businesses also identified a range of business benefits to taking action on climate change. Responding to customer opportunities and keeping up with competitive trends were relevant drivers for many, with 51 per cent of smaller businesses taking net zero actions mentioning that it made financial sense.

This year has the potential to see a real step change in action from smaller businesses, but they need to be informed and supported in taking the steps needed towards decarbonisation. We are working on the ground, across the UK, to join up market participants, collaborate with them, and improve access to net zero-related financial advice for intermediaries and smaller businesses. As a crucial part of Scotland's economy, we are helping smaller businesses understand how to transition to net zero by 2045.

More information is available via the British Business Bank’s Finance Hub at www.british-business-bank.co.uk/finance-hub.

Mark Sterritt, UK Network Director, Scotland at the British Business Bank