Think net zero won’t impact you anytime soon? Think again

The UK has committed to reaching net zero emissions by 2050. It would be easy to think this is something only large organisations need to worry about in the near term. With the date so far away and there being so many larger companies – with larger carbon footprints – to focus on, how could the responsibility to act now land on the doorstep of smaller businesses?

This isn’t tomorrow’s problem

2050 isn’t as far away as it first appears. To keep ourselves on track, we actually need to be over three quarters of the way there by 2035. It will require achieving the same reduction in emissions that we managed over the last three decades again, but this time in half the timeframe. The North West region aims to move even faster, reaching net zero carbon by 2040 at the latest, and as soon as 2038 in Greater Manchester. The heavy lifting will occur in the 2020s, not the distant future.

The screw is already turning on the largest emitters. Hundreds of the world’s largest companies have now set their own net zero targets – often in advance of 2050 – and are looking closely at where their biggest sources of emissions are.

Attention is turning to suppliers

This is where SMEs come in, because it is in the supply chain where the majority of a large organisation’s carbon footprint lies. As businesses begin to adopt and act on their net zero goals, scrutiny on suppliers will increase.

Many of the biggest companies, from HP to Heineken, have already committed to net zero across their supply chains before 2050. Recent research by Standard Chartered found that two thirds of multinationals are prioritising their supply chain emissions in their net zero transition, and almost four in five say they plan to remove suppliers that “endanger” their carbon reduction plan by 2025.

Procurement is changing

The public sector is also looking at its supply chains. From September this year, companies will not be able to bid for large government contracts unless they have committed to net zero and published their own carbon reduction plan. Procurement teams throughout the public sector have also been directed to take account of a bidder’s approach to climate change and net zero in any tender, regardless of the value.

This trend is both a huge risk and a huge opportunity for SMEs. Those that are not adequately prepared to answer questions from customers about their environmental impact or carbon footprint, risk losing out on business. Those that can demonstrate strong green credentials and have their own strategy for net zero have a massive advantage over the laggards.

It’s a win-win

Improving competitiveness in the market is far from the only driver for SMEs to reduce their carbon footprint. SMEs are responsible for almost half of the UK’s business-related emissions, a sizeable portion of which can be eliminated through low or no cost energy and resource efficiency measures that benefit the bottom line, increase resilience and improve productivity.

Improving environmental sustainability is also something that all stakeholders increasingly expect to see, including employees – especially younger generations, who often value this in their employer more than their remuneration package.

Knowing where to start

The trouble is, most SMEs don’t yet have the resources or capability to capitalise on these opportunities. For a small organisation short on time, it can be hard to even know where to start with such a huge topic.

That’s why we have launched Journey to Net Zero – a fully-funded online programme exclusively for SMEs in Greater Manchester who are at that early stage of getting on the path to net zero.

The programme is delivered via a mix of group workshops and one-to-one advice by our Resource Efficiency team, who collectively have over 150 years’ experiencing supporting SMEs to become cleaner, greener and more profitable.

There is no better time than now to join the transition and put your own strategy in place.

This blog was first published by Insider North West here.