UK SMEs are driving forward net zero targets, with two thirds (64%) of SMEs saying they have a plan in place to reach net zero by 2050, according to Lloyds Bank’s Net Zero Monitor. The Monitor finds that 7% of SMEs have already reached net zero emissions − jumping to 12% in London − acting as ‘heroes’ for other businesses, while just 5% of SMEs are not acting or not considering acting on net zero.
The vast majority of SMEs (93%) say that sustainability challenges are important to them, with 83% reporting it has become more important in the last year – reaching 93% for SMEs in the East of England – despite other challenges facing their businesses, such as rising energy costs and the ongoing impact of Brexit.
Building on the SME five-step journey to net zero, which was first set out in the Monitor in 2021, Lloyds Bank this year surveyed over 1,000 financial decision makers in SMEs (excluding micro businesses) to establish a baseline of where they are in their sustainability journey today:
The West Midlands (79%) has the most SMEs at stage three or above of their net zero journey and, on a sector basis, the services (72%) and transport (70%) sectors have the most SMEs at stage three and above.
The research also identified the top activities being undertaken by SMEs trying to achieve their net zero targets:
However, when asked about the action that was actually having the most impact in achieving their net zero targets, businesses said that reducing energy consumption was their most impactful action (38%), closely followed by recycling and reducing waste (37%).
Elyn Corfield, Chief Executive Officer, Lloyds Bank Business & Commercial Banking, said: “The progress SMEs are making on their net zero journeys is crucial to enabling us all to reach the 2050 target, and their dedication to the task, especially given the range of competing priorities they face every day, is to be admired.
“That growing awareness leading to increased action is exactly the path we need to take. The survey also encouragingly highlights net zero ’heroes’, companies which can act as champions for all businesses on their road to net zero, share knowledge, and pave the way for a growing number of SMEs to reach their sustainability targets.”