3 March 2022

Business owners want to be greener – it’s time for the Government to support their ambitions


If the Government wants to get us to Net Zero by 2050, then bringing SMEs along for the ride will be essential. The British Business Bank estimates that British SMEs are responsible for a third of all of the UK’s greenhouse gas emissions. So to put it simply, we will not achieve Net Zero by 2050 without helping SMEs decarbonise.

The good news is that small businesses want to do their bit. 

Polling, featured in Green Ambition, a new report I’ve written for Enterprise Nation, The Enterprise Trust, and Aviva, reveals that most small business owners want to make a real difference. However, there’s a gap between their good intentions and real-world actions. Only one in five have plans to adopt environmental, social and governance (ESG) measures and only a third plan to use corporate social responsibility (CSR) policies or track their impact.

If both the Government and SMEs want to swim in the same direction, what is holding them back? We teamed up with pollster YouGov to ask 1,007 British SMEs about their attitudes to various green initiatives.

Awareness of key climate change initiatives was startlingly low – for example, fewer than one fifth had heard of ‘emissions trading’, which is a crucial element of the Government’s strategy.

Reforms to construction will be crucial to the ongoing effort to ‘build back greener’, but only 13% of construction, home repairs and improvements firms had even heard of the Government’s Heat and Buildings Strategy, let alone read or understood it.

We shouldn’t blame these business owners – very few of them have the time to read a 200-page document when their main priority is making enough money to keep their business afloat. Yet, it is startling how little businesses know about key policies in their sector.

The failure, instead, lies with the Government, which has not managed to properly communicate its strategy and support to these SMEs. British SMEs want to make the necessary changes, but mostly lack the information or resources they need. As Enterprise Nation’s Founder Emma Jones said: ‘At the moment sustainability and environmentalism are high on everyone’s agendas – but translating that into accessible, practical, and affordable actions requires a major shift.’ We need the Government to take this enthusiasm and transform it into real progress.

What can be done? For a start, ministers must offer clear communication about policies that will help small business owners invest in skills and technologies that future-proof their business while helping the environment. Businesses should be offered financial incentives for making environmentally friendly changes in order to offset the short-term investment costs. And the Government should champion the SMEs that make these changes, demonstrating to the business community that it is not only possible to be both green and profitable, but that it is genuinely achievable.

For example, Aztec Farms is a vertical farming start-up based in Manchester. It is a business that matches both the Government’s Net Zero strategy and it fits into the levelling up agenda too. It demonstrates the very best of the dynamism and optimism that drives the private sector. But the reality is, they have done this off their own bat. And that’s still quite unusual.

It is possible for the UK to head in the right direction, but impactful change and leadership must come from the top down, as well as from the bottom up. If the Government is serious about tackling climate change, it needs to be serious about helping British SMEs to do their part.

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Joshua Taggart is a researcher of environmental economics at the Entrepreneurs Network. The views contained herein are solely of the author.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.